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There is something I really like in this Ygeslias article. Whatever is causing more partisan politics it’s not the economy. We’ve done well the past few years.
https://www.slowboring.com/p/how-obama-and-trump-and-biden-beat
Macroeconomic management has been actually really good the last 15 years. Someone can argue we could have had a few million more people employed between 2010-1016, but that’s like 2% of gdp. Trump did close that gap and I’m not sure if he was brilliant or lucky but he yelled at the Fed for being too hawkish.
I like how he led with the shale Revolution. I’ve been saying this for years. Tech gets all the fan fare but if Tech was the Jordan of the economy American energy independence over this time frame was the Scottie Pippen in creating wealth for America. I think part of the reason it doesn’t get the fanfare is because it doesn’t create 12 figure networth people. Its a constant costs business versus moat building business. Of course if the businesses are not as profitable then the surplus value went to consumers in the form of lower energy costs versus companies having high margins. Also likely led to America not needing to write giant checks to the Saudis which meant our trade deficit could fund other things and those depend more on price leading to the strong dollar. People working in constant-costs businesses (farming, manufacturing, energy) tend to vote red; people working in wide moat with ability to extract economic rents or winner take all markets tend to vote blue. Someday I should write a long article on this because I have not seen anyone write about it. But the split in voting patterns makes a lot of sense based on the economics of their business. It would even make sense to have different tax regimes for these businesses but would be impossibly hard to execute. As a driver of political views it seems as powerful as male-female splits which seems a lot more talked about.
I think maga and the left like to cite American wealth not making it to the middle class etc. But honestly this much wealth creation can’t just be consumed by the 1% it pretty much has to flow to others. Perhaps, the middle class isn’t doing as well as we want them to be doing but the counter factual (Europe) would be poorer than what we got.
The GDP numbers are more pronounced because we calculate things in currencies and the cited figures were when the dollar was weak. The gap has definitely shifted in favor of the US but I do think this overstates the change.
The Tea Party seems underrated to me. They put a halt to more government spending. Less fiscal policy meant the fed could keep rates lower which basically crowded-in private investment in tech and shale and a host of things with cheap money. The current situation is the opposite of this where we increased federal spending from about 20.5% last decade to 24% now. And that’s caused a massive change in rates to get inflation close to target.
Culture Wars seem to have little to do with economic mismanagement by either side. I think the right is correct that the fall of small towns is bad but I think that largely came from economic forces (like productivity) gains that couldn’t be prevented. And there small towns have also been hurt by the people (probably like myself) who would be logical local elites moving away.
As much as national divorce or something always sound appealing it’s just going to make us all poorer. To break up economic integration would make our economy much more like Europe. We would run into something like Brussels that is ineffective at macro management and lose the economy of scale.
As someone who knows little about economics, I am curious about how much the various economic metrics actually correspond to quality of life. Certainly I feel that there is good reason to be a bit suspicious about such metrics in general. They inevitably simplify complex realities, they can be cherry-picked by biased "experts", and then there is Goodhart's law.
I see that much of the US heartland looks like a hollowed-out place with few jobs other than at the McDs, gas station, farm, army base, or prison and with massive drug abuse issues. I see how many of the good jobs are concentrated in a few cities. I see the housing crises in the desirable cities. I see the difficulties that people who are not in the upper tiers of birth fortune and/or intelligence have in getting decent jobs. I see how little vacation time working Americans usually get. But when I write all of this, I also know that there is a huge amount of economic success that such a picture misses. There is also a great deal of affluence, success, and dynamism in America.
Overall, I feel that it is hard for me to get a good picture of how well America really is doing economically.
Depends on what you mean by "quality of life." If quality of life corresponds to revealed preferences, then people in the heartland are getting more of the things they want than ever and are therefore enjoying a better quality of life than ever. But it so happens that what they want is meth and McDonalds.
If by "quality of life" you mean "the things that people should want," then that's a harder question. We'd have to come up with an objective way of figuring out what people "should" want, and then measure whether they're getting more or less of that.
I don't think it is a hard question unless you want it to be.
Similar to how it is universally preferable to have friends and not constantly fear for ones life, I think it's universally preferable to have easy access to housing. And I think access to housing trumps nigh every other need outside of food and water.
It seems to me we can have a very simple baseline definition of 'quality of life' and come away with the fact that a 'good economy' doesn't matter in any meaningful sense to a lot of people.
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