“I inherited a mess,” President Trump told an audience of supporters in Georgia last Thursday, referring to the U.S. economy. The Democrats “caused the affordability problem, and we’ve solved it!” he bragged. Two days earlier on Fox Business he had proclaimed an even grander achievement: “I think we have the greatest economy actually ever in history.”
When a president talks like that 37 weeks before the mid-term elections, it means one thing: The economy is the No. 1 issue, and it’s a problem for the incumbent party because a large number of voters don’t believe the economy is doing well at all. The reason it’s a problem is clear. History shows it never works to tell unhappy voters that they actually live in a wonderful economy, and research shows that humans are hard-wired to believe what they feel and not what someone else tells them. Voters aren’t going to change.
By the numbers, the U.S. economy may not be the greatest ever, but it certainly isn’t bad. Last year it grew 2.2% adjusted for inflation, which is more than most economists expected. The unemployment rate remains low at 4.3%, and wages have grown, though not spectacularly.
That’s reality, but what counts in politics is how voters feel, and most don’t feel contented. Consumer sentiment is about 20% below what it was when Trump was sworn in, according to the University of Michigan’s long-running survey on that metric. Not everyone is gloomy. “Sentiment surged for consumers with the largest stock portfolios,” says Michigan consumer survey director Joanne Hsu, but “it stagnated and remained at dismal levels” for the far more people without stocks.
Obvious question: If the economy is at least okay, why do millions of Americans think it’s terrible? The answer is that our brains are not hard-wired to think like economists. We are hard-wired for survival, so we pay far more attention to bad news, and we remember it much longer, than good news. For example, the towering levels of inflation in the early 1980s traumatized consumers for years. By mid-1985, inflation had dropped from its peak of 14.8% in 1980 to just 3.8%, yet Gallup polling indicated that some 20 million adults considered inflation “the most important problem facing the U.S.”
That wasn’t a fluke. Researchers have found that we’ll pay twice as much to avoid a bad outcome as we’ll pay to receive a good outcome that is quantitively the same. The possibility of a bad outcome looms larger in our minds, which is why we remember bad outcomes longer. Last year the prices of beef, dairy, coffee, shoes, clothing—basic needs—rose by double-digit percentages, and voters are likely to remember that pain regardless of where prices go next or how much GDP might increase. By contrast, consider how we feel about costs of certain other basic needs for many people: gasoline and propane. Those prices declined last year. Ask your friends if they knew that.
As a potential preview of this year’s elections, consider President George H.W. Bush’s 1992 run for reelection. A brief, mild recession had occurred in his term and ended 19 months before Election Day. When campaigning season arrived, he told voters the economy was booming, and he was correct. His opponent, Bill Clinton, famously told voters, “I feel your pain,” and he won. He spoke to the most powerful part of the human brain.
Of course, Trump isn’t on the ballot this year, and last year there was no recession. Much will happen before Nov. 3. But experience suggests a strategy of telling voters the U.S. economy is the greatest in history, when their hard-wired brains tell them otherwise, will be a hard road to keeping control of Congress.
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