Every so often, I get into Twitter disputes with MSNBC host Chris Hayes, a professional friend whom I met when I was an undergraduate. This week brought about such an occasion. Scrolling through my feed, I saw Hayes' advice to Democratic candidates in talking about the US economy during the 2020 election cycle. It's time to call out the terrible economic conditions for what they are, he argued, claiming that the prevailing narrative about the strong economy only really applies to the president's rich friends:
One the central message of the Dem nominee could be: the Trump economy actually sucks. He thinks it's great because he's given all his rich buddies and his family corrupt giveaways, but he's screwed you.— Chris Hayes (@chrislhayes) August 1, 2019
I mean, a GM plant just closed 10 miles away. Maybe talk about that?
Unemployment is under 4%, wages are up substantially, GDP growth is fairly solid, ~70% of voters hold positive views of the economy & it’s the only big issue on which Trump consistently wins majority approval. But feel free to make this a central message ?????? https://t.co/vmTkiaa5lM— Guy Benson (@guypbenson) August 1, 2019
He then replied:
As I’ve said on the show a bunch, the macroeconomic top-line numbers are indeed quite good, in no small part to a somewhat hilarious 180 degree about face from Trump et al on domestic spending and loose monetary policy.— Chris Hayes (@chrislhayes) August 1, 2019
Hayes added that the good overall numbers are not "the whole story" for millions of workers who are treading water. A few points, several of which I relayed back to him during our exchange: First, there will always be some people struggling in America, no matter how strong the economy may be. The political opposition has an incentive focus on these soft spots and weaknesses, and both sides do it. It's just that the soft spots and weaknesses are pretty few and far between right now. Second, the notion that the "quite good" top-line numbers not telling "the whole story" for every single person is obviously true. That's also a very far cry from asserting, as Hayes urged Democrats to do, that the economy "actually sucks." Empirically speaking, based on virtually every accepted measure, it currently does not. Quite the opposite, in fact. Third, the idea that lower-income workers are getting "screwed" while the rich benefit is refuted by lots of data. For instance, the tax cuts helped every income group in America, with the possible exception of millionaires, based on IRS information. And boosted wage growth has actually disproportionately helped those on the bottom rungs of the income scale. Here's CNBC earlier this year:
The recent jump in paychecks has come with an unusual characteristic, as workers at the lower end of the pay scale are getting the greater benefit. Average hourly earnings rose 3.4 percent in February from the same period a year ago, according to a Bureau of Labor Statistics report last week. That’s the biggest gain since April 2009 and seventh month in a row that compensation has been 3 percent or better. What has set this rise apart is that it’s the first time during an economic recovery that began in mid-2009 that the bottom half of earners are benefiting more than the top half — in fact, about twice as much, according to calculations by Goldman Sachs. The trend began in 2018 and has continued into this year, and could be signaling a stronger economy than many experts think.
More factual support for this point:
While undoubtedly not every American is feeling the benefits of the strong macroeconomic environment, worth noting that workers in the bottom quartile are steadily seeing faster wage gains than those at the top. So the Trump economy is actually narrowing past demographic divides pic.twitter.com/2b7sPuTxwl— Scott Ruesterholz (@Read_N_Learn) August 1, 2019
The revisions show that employee compensation rose 4.5% in 2017 and 5% in 2018—some $4.4 billion and $87.1 billion more than previously reported. The trend has continued into 2019, with compensation increasing $378 billion or 3.4% in the first six months alone...In sum, Americans are earning more and relying less on government. Personal savings estimates were also increased by $217 billion for the last two years and are now $1.3 trillion, which means Americans are socking away more of their earnings...The economy barely skirted recession in the final Obama years, and economic policy changed in 2017. Deregulation has unleashed repressed animal spirits, especially in energy. Tax reform has also spurred business investment in new facilities and equipment, which over time should translate into higher worker productivity and wages...While Democrats and even some conservatives complain that workers haven’t benefited from tax reform, the evidence suggests otherwise...This sure sounds like an economy that is benefiting the 99%.
And as I mentioned in my initial response to Hayes, people are feeling it. Economic confidence and optimism is broad and enduring, and a majority of voters are crediting the president -- including many who disapprove of his job performance and handling of other issues. Trying to tell people that the economy "actually sucks," in the face of the data I've rehearsed above, as well as their own lived experience, seems neither accurate nor politically wise. Also, while Hayes tries to attribute recent gains to more liberal monetary and spending policies (I've remained consistent on federal over-spending and debt, for the record), this is wishcasting. The major policy changes that have kicked the successful economy into another gear were tax reform and deregulation, which the Left opposed and fought tooth and nail. It's entirely possible that the economy will start to weaken, perhaps because of harmful trade policies, or in relation to a wider global slowdown. If that happens, Trump's argument for re-election will get much harder. But at this moment, the economy does not remotely "suck," and an overwhelming majority of Americans know and feel it. I'll leave you with the brand new jobs numbers, which basically met expectations:
More on today's U.S. jobs report ??— Bloomberg Economics (@economics) August 2, 2019
?? Payrolls 164,000, almost matching projections
↔? Jobless rate held at 3.7%
?? Prior 2 months were revised lower
?? Wages climbed 3.2% from a year earlier — better than forecast
Read more: https://t.co/9eYZeZGM71
There are mixed signals in the data, but once again, wage growth is a crucial bright spot that directly and positively impacts American workers.