Saying it is Just a Perception Problem with the Economy

Trying to argue things are getting better when most don't see doesn't work.

Among one of the economic markers that regularly gets held up whenever a government's trying to sell its situation are the inflation rate, along with things like GDP growth or the unemployment numbers. The logic being most of the population has been told generically what good and bad means when they see these figures. That is if inflation starts to get up over about 2.5% that's probably a bad thing. One of the problems is most of the time the numbers are much more complicated then what is being presented on the surface.

The opaque nature that most political operators use when they bring up a number like inflation or unemployment is intentional. Inflation could be affected by things like housing prices or the value on the stock market which isn't likely to affect most people in their day-to-day lives. But it can make it look as though there's good or bad going on as a marketing strategy. That is they're trying to give the appearance that their economic management has either been getting better or that you should be appreciating it more.

 On some level everybody should have expected inflation to be extremely high coming out of the covid lockdowns. After the economy was basically grinded to a halt it figured that you were going to have a high increase in the  value of resource sales. The problem was because they had reduced the amount of supply so much the cost for most food as an example when  sky high as well. In this case it wasn't simply that inflation was up but most people noticed that the prices on their day-to-day lives had increased. 

And it should be pointed out it wasn't so much that people were freaking out about inflation hitting 10% as much as what it was literally costing them. This is where using a figure was less important than the actual effect the average person was feeling even though the numbers seem to be more accurate in this particular instance.

It's probably fair to say right at the beginning press secretaries had the releases printed long before prices started to level off about how well they were doing about bringing inflation back under control. Here's the problem: it was basically the economy simply starting to work again that did it. The government had little to nothing to do with it other than it simply did not keep intervening and what was being produced had come back to normal levels. That being said, this was the typical political opportunity to try and sell that things were getting better and you should be appreciating that. 

As soon as television started to become a prime medium for information politics became as much about messaging as anything else. This is why increasingly you seem most elected officials being more concerned with being an actor playing a role than actually having any idea about Administration or managing something. On this front whenever bad news shows up they instantly go into the mode of trying to find how to produce a new narrative as to how they are going to fix it. Even though half of the time they were the ones that caused the problem in the first place. Economic figures presented as the state of affairs in the moment are one of the prime places where political messaging is taken to an extreme.

 This is exactly what is going on at the moment with the current advertising coming out of the Biden Administration. The constant argument that things have gotten much better largely by pointing at a falling inflation rate or an industrial policy that helps develop key industries being put to the forefront as targeted examples of great economic management.

The big problem with this has been that it runs against most people's own life experience at the moment. Even if you tell me that inflation will go down, if my grocery bill still remains much higher than it was five or six years ago, I'm not much interested in what the specific differences have been in the last month. Similarly, shifting policy to benefit specific industries like microchip production doesn't help many of the average people who have seen their paycheck buying less and less.

This has become a common problem for governments. A messaging strategy that is built within party headquarters constructed along lines of what they believe is supposed to be happening considering all of the modeling they've done. Yet most of it has very little feedback from actual members of the public. Focus groups are typically made up of those who fit certain stereotypes to try and get generic answers. Most of the entire objective of how to sell a policy is built on the idea that anybody in a given demographic should all respond the same way. Of course this never happens.

 As such when something like inflation appears to be coming down but no one is giving the government credit for it the response is at first bewilderment but typically always turns into people just don't understand how good they have it. Forget that nobody who is trying to do a press conference is actually probably standing at the end of the line at the grocery store and asking people what their bill looks like compared to two years ago.

Might be the biggest irony that about 25-30 years ago it was parties on the left that liked more stayed in intervention that usually argued that a lot of economic measurements gave false readings. They argued that there were better ways to try and figure out what the average person was seeing rather than measuring a country's gross domestic product. Today most of those same academics would be the first to say that state-run economies should be looking at these numbers because they tend to help the argument more than talking to the average person does. 

Economic arguments are easily one of the most obvious places where the central managers in government have had a hard time trying to connect with the populations that they're trying to manage. If you had a representative government that actually understood the people that were electing them it would be much easier to nope the talking about an inflation rate doesn't mean anything if it doesn't correspond with what's going on with someone's average day. So long as governments keep preaching on how great they're doing because the economic forecast numbers look better they're going to continue to be bewildered by how much pushback they get come the next election.