By Dante Chinni and Ari Pinkus
If you pay any attention to politics and polling, you have likely heard that your friends and neighbors are not very happy with the direction of the country. You might not be, either.
One ABC News/Ipsos survey in November 2023 showed three-quarters of Americans believed the country was on the “wrong track.” Only 23% believed it was headed in the “right direction.”
And the survey was not an outlier. Poll after poll shows a sizable majority of the nation’s residents disapprove of its course.
Have Americans – long seen as upbeat, can-do optimists – really grown dour about the state of the nation and where it’s headed?
The answer, we think, is yes and no. Or, to be more direct, as the researchers who run the American Communities Project, which explores the differences in 15 different types of community in the United States, we believe the surveys are asking a question with no real meaning in the United States in 2024 – a question that may have outlived its usefulness.
An ‘astonishing finding’
“Do you feel things in the country are generally going in the right direction, or do you feel things have gotten off on the wrong track?”
That question or one very much like it is well known to anyone who has glanced at a poll story or studied the data of a survey in the past 50 years.
These public opinion surveys, often sponsored by news organizations, seek to understand where the public stands on the key issues of the day. In essence, they tell the public about itself. Political parties and candidates often conduct their own surveys with a version of the “right direction/wrong track” question to better understand their constituencies and potential voters.
The American Communities Project, based at Michigan State University, uses demographic and socioeconomic measures to break the nation’s 3,100 counties into 15 different types of communities – everything from what we label as “big cities” to “aging farmlands.” In our work with the project, we’ve found a strong reason to be skeptical of the “right direction/wrong track” question. Simply put, the divisions in the country have rendered the question obsolete.
In 2023, we worked with Ipsos to survey more than 5,000 people across the country in all those community types. We asked the survey participants what issues they were concerned about locally and nationally. How did they feel about the Second Amendment? About gender identity? About institutional racism? We found a lot of disagreement on those and other controversial issues.
But there were also a few areas of agreement. One of the big ones: In every community we surveyed, at least 70% said the country was on the “wrong track.” And that is an astonishing finding.
Agreement for different reasons
Why was that response so surprising?
The community types we study are radically different from each other. Some are urban and some are rural. Some are full of people with bachelor’s degrees, while others have few. Racially and ethnically, some look like America as it is projected to be in 30 years – multicultural – and some look like the nation did 50 years ago, very white and non-Hispanic. Some of the communities voted for President Joe Biden by landslide numbers in 2020, while others did the same for Donald Trump.
Given those differences, how could they be in such a high level of agreement on the direction of the country?
To answer that question, we visited two counties in New York state in January that are 3½ hours and several worlds away from each other: New York County, which is labeled a “big city” in our typology and encompasses Manhattan, and Chenango County, labeled “rural middle America” in our work, located in the south-central part of the state.
In 2020, Biden won 86% of the vote in big metropolitan Manhattan, and Trump won 60% in aging, rural Chenango.
When we visited those two counties, we heard a lot of talk of America’s “wrong track” in both places from almost everyone. More important, we heard huge differences in “why” the country was on the wrong track.
“If something don’t change in the next election, we’re going to be done. We’re going to be a socialist country. They’re trying to tell you what you can do and can’t do. That’s dictatorship, isn’t it? Isn’t this a free country?” said James Stone, 75, in Chenango County.
Also in Chenango County, Leon Lamb, 69, is concerned about the next generation.
“I’m worried about them training the kids in school,” he said. “You got kids today who don’t even want to work. They get free handouts … I worked when I was a kid … I couldn’t wait to get out of the house. I wanted to be on my own.”
In New York City, meanwhile, Emily Boggs, 34, a theater artist, bartender and swim instructor, sees things differently as she struggles to make ends meet.
“We’ve been pitched since we were young, that like, America is the best country in the world. Everyone wants to be here, you’re free, and you can do whatever you want,” Boggs said. “And it’s like, well, if you have the money … I’ve got major issues with millionaires and billionaires not having to pay their full share of taxes, just billionaires existing … It’s the inequality.”
A lifelong New York City resident, Harvey Leibovitz, 89, told us: “The country is on the wrong direction completely. But it’s based upon a very extreme but significant minority that has no regard to democracy, and basically, in my opinion, is racist and worried about the color of the population.”
Opposite views in same answer
To be clear, we are not saying that asking people about the direction of the country is completely worthless. There may be some value in chronicling Americans’ unhappiness with the state of their country, but as a stand-alone question, “right direction/wrong track” is not very helpful. It’s the beginning of a conversation, not a meaningful measure.
It turns out that one person’s idea about the country being on the wrong track may be completely the opposite of another person’s version of America’s wrong direction.
It’s easy to grasp the appeal of one broad question aimed at summarizing people’s thoughts. But in a complicated and deeply fragmented country, a more nuanced view of the public’s perceptions of the nation would help Americans understand more about themselves and their country.
By Dante Chinni is Director of the American Communities Project at Michigan State University. Ari Pinkus is Manager of the American Communities Project at Michigan State University.
The Conversation arose out of deep-seated concerns for the fading quality of our public discourse and recognition of the vital role that academic experts could play in the public arena. Information has always been essential to democracy. It’s a societal good, like clean water. But many now find it difficult to put their trust in the media and experts who have spent years researching a topic. Instead, they listen to those who have the loudest voices. Those uninformed views are amplified by social media networks that reward those who spark outrage instead of insight or thoughtful discussion. The Conversation seeks to be part of the solution to this problem, to raise up the voices of true experts and to make their knowledge available to everyone. The Conversation publishes nightly at 9 p.m. on FlaglerLive.
JimboXYZ says
“Researchers who run the American Communities Project, which explores the differences in 15 different types of community in the United States, believe the surveys are asking a question with no real meaning in the United States in 2024 – a question that may have outlived its usefulness.”
The one’s thinking the question has no real meaning in the USA 2024 discounting it as the question that has outlived it’s usefulness have gotta be pro-Biden types that simply run over anyone with common sense. In every way possible, global warming has gotten worse under Biden policies. The green new deal is an idealistic lie that is perpetuated with Border Crisis & Inflation (gouging if you’re a Biden voter and don’t want Biden to wear his true legacy for 3+ years to date). This show brought to all of us by the Democrats from 2020 for their coup. Will be interesting to see the results of the election in 2024 ? Will Texas & FL become Blue Biden states from the Border Crisis vote harvest, the CA & NY exits to Texas, FL, TN and any other US citizen relocations ? Imagine how bad it will get here if TX & FL have Democrat governors like CA & NY. Removing Biden-Harris by vote is the only option to really save America & Democracy, even if you can afford a new EV, they’ll tell you when you can charge it & for how long, just like Newsom & the D’s have done in CA.
Ray W. says
I agree with JimboXYZ that our nation’s political discourse has veered offtrack, though I disagree with his conclusions.
Some 10 years ago, my elder daughter called me to discuss concerns she and her girlfriends had about the political mood she was experiencing. I told her of my opinion that America had been suffering from a stomachache and that we needed to throw up to get through the sickness. A short while later, I saw our former president announce his candidacy. I watched his body language and listened to the tone and tenor of his delivery as he formed a campaign strategy. I called my daughter and apologized for my error. I told her we were in the early phases of an accelerated age of political violence the likes of which had not been seen in America for about a century. I told her it would get far worse and that it might take decades before it got better.
Since that second talk with my daughter, I watched as we became more and more of a vengeful political nation. I almost never commented on FlaglerLive, though, until I read of a local Republican figure taking to the radio to ask just when could people begin beheading Democrats. Since that time, I have not tried to persuade readers to adopt Democratic political goals. Instead, I have opposed the vengeful among us, the violent political opportunists among us, the deceitful among us, the gullible among us, the disinforming among us, the misinforming among us. The is a difference between my supporting a position and my opposing a different position.
After our local Republican politician argued for the beheading of Democrats, our Governor sought the Republican nomination for president. He decided it was politically advantageous to announce that if elected president he intended to “slit throats” of federal employees on his first day in office. I do not know if any connection exists, but shortly after the “slit throats” comment, a young man murdered his father, who was a federal employee. He beheaded his father by slitting his throat. He placed his father’s head in a bag. He posted a video on a social media site. In the video he held up his father’s head while stating that all federal employees needed murdering.
At around the same time, our former president announced that he intended to “crush vermin.” He also announced in a different forum that if elected, he intended to be a dictator “for one day.”
More recently, a Republican U.S. Senate candidate announced at a rally that during the upcoming election, people needed to strap on a Glock. The incumbent Democratic Senate candidate is married to a former U.S. House member who was shot during a rally by a terrorist; he used a Glock 19 to kill three people among the 19 victims he created that day.
A Republican Senator recently implored bystanders to become vigilantes wherever people gather to protest. He doubled down when asked by stating later that if protesters block a bridge, then vigilantes should throw them off the bridge.
To me, the difference is between the politically vengeful, the politically violent, the politically murderous among us and the politically decent among us who oppose the vengeful, the violent, the murderous among us. JimboXYZ presents as a commenter who supports the vengeful, the violent, the murderous among us and opposes the decent among us. We have candidates who openly contemplate the murder or harm of political opponents. JimboXYZ does not denounce them. I denounce them but he does not.
Lacking common sense, JimboXYZ opposes those who display common sense, though he does possess an ample supply of fantastical thinking.
Global warming has not gotten worse due to the domestic policies of the current administration; it is constantly amplified by an international economy that consumes 100 million barrels of crude oil per day, that emits tons and tons of methane into the atmosphere per day, that burns huge amounts of natural gas per day.
We have a border problem that is a crisis only in the eyes of the deceitful among us. We need millions of new workers and American women are simply not having enough babies. The American birth rate dropped below replacement rate nearly 20 years ago.
Florida’s legislature passed a law broadening the workplace parameters for teenage workers. Florida’s legislature passed a law easing the way for farmers to build the housing required to bring in more immigrant workers.
Florida’s farmers did not plant as many acres as they normally do because they don’t know if they can find the workers to pick the crops. The non-farm labor participation rate has returned to a normal 62.7% figure, so young people are working, yet businesses cannot find enough workers to fill posted job openings.
Historically, posted job openings had never exceeded 8 million until 2021. For the past 37 months, the figure has been above 8 million; it peaked at 12.2 million posted job openings last year, it is 8.5 million now. Unemployment rates are near historical lows. We need millions more workers to meet business needs and we can’t get them from American mothers; they decided decades ago to not have as many children as their mothers had. Just how much stronger would be the American economy but for a lack of domestic and immigrant workers? It would take 18 years to fix the shortage of American workers, if only American women would increase the birth rate. We can fix the shortage of immigrant workers right now.
Inflation is a direct legacy of the pandemic and the bipartisan response to it.
The people voted our former president out of office, there was no coup.
Laurel says
Body language has been defined as 93% of communication, leaving only 3% verbal. Body language was my first impression on candidate Trump, and it was not good. Then, the Access Hollywood tape came out, and a video clip of Trump mocking a man with palsy. That was it for me; Trump was no good. So he rambles on with absolutely nothing worthwhile said (3%), while his body gives him away. He states half of our fellow Americans are vermin. His behavior, his lies are all so blatantly offensive. His narcissism is blatant. His failures are many. I mean, how can you screw up vodka? My questions are: How is this not seen by half of Americans? Is it the fear of losing apex position so frightening that their brains shut down? That they are more than willing to vote against their own best interests?
RW says
YES
Laurel says
Case in point.
Ray W. says
Is America, and the world, on the right track, part 2.
The Associated Press reports that global electricity demand rose 2% last year; with an expected rise in demand again this year. Some of the rise comes from the EV sector, other from the HVAC sector. People need more data centers, too, including those in Flagler County.
Global emissions from fossil fuel electricity generation rose by 1% last year, mainly in China, Mexico, India and Vietnam. But overall clean energy generation (solar, wind, geothermal, nuclear and hydropower) rose even more. Global hydropower generation dropped due to drought, with some of the countries experiencing drought having to ramp up coal generation to meet demand.
For the 19th straight year, solar led the increase in renewable power generation. A record 30% of the world’s overall electricity needs came from renewables. Solar energy production rose twice as fast as coal’s and solar’s pace of new construction is accelerating.
If this year’s predicted global renewable energy production rises as fast as expected, despite the predicted rise in overall global electricity demand, fossil fuel energy production should drop by 2%.
Are we turning the right corner? If solar and wind energy production are the cheapest currently available forms of new electricity production, and if they are expected to be even cheaper in the future, shouldn’t we be turning this corner?
Ray W. says
Are we turning the right corner, part 3.
CNN reports that Japan’s population dropped by 800,000 people last year to 125.4 million. Other sources show Japan’s immigration policies as more restrictive than our own. Japan being an island has a role in that field of study.
Japanese women reproduce at a 1.3 children per mother rate, far below our own birthrate of 1.7 and far below the replacement rate of 2.1 that would maintain a stable population. The number of Japanese children under age 15 dropped for the 43rd year straight. 14% (some 9 million) of residential properties lie vacant.
I have to wonder. Is this our future? American mothers have fewer babies than their predecessors. American birth rates dropped below replacement levels some 17 years ago. We are now approaching a stagnant domestic population level. Reductions are our future without immigration. Japanese economic growth stagnated over the last three decades, despite consistent increases in productivity. Some argue that we, too, should stagnate, that economic growth should slow due to a lack of new young workers, because reducing immigration is more important than economic growth. Some argue that children should be allowed to work longer hours, longer weeks. Some say retirement age thresholds should rise. Are they right? If they are right, are these measures transitory in the overall population scheme? Are they nothing more than putting the proverbial finger in the leaking dike?
Pogo says
@Ray W.
100%
I would add: the failed criminal state of Russia’s population has been shriveling for quite a while — is Putin merely engaged in a shortcut to increasing Russia’s population? After all, under his leadership, once you’re a Russian, you’re a Putin Russian — or else.
Is this an important contributor to strife everywhere?
Ray W. says
Good point, Pogo.
The disaffected among us care not for the rule of law.
At one time Putin was a minor KGB officer serving in East Berlin. Disaffected by the chaos cascading across the vast Russian empire after the fall of the Soviet model (I hesitate to call it a philosophy), he now seems forever destined to place the rights of the Russian state above the rights of the individual.
To our founding fathers there was no such thing as a state’s right. States were gifted by ratification only those limited political powers that were outlined or defined in their proposed constitutions. Officials held only that portion of those limited powers that are delegated to them by their constitutions when they take office. Only people had rights in their world. Somehow the concept of nullification took root in the slave-holding states, despite an 1830 Supreme Court opinion denying the constitutional validity of the idea. Nullification was the mother of the concept of State’s rights. The slaveholding states had the natural law right to nullify any federal law at will, despite the concept of separation of powers, of limited powers, of the rule of law.
If government officials were ever to possess political rights inhering in their offices, how could anyone else rely on our constitutionally prescribed checks and balances to limit the exercise of those political rights?
In a concurring opinion by a Connecticut Supreme Court justice, the subject of state’s rights was addressed. An attorney for the prosecution had stated during oral argument that the State had a right to execute a defendant. The justice wrote that the State had never had any such right. It only had the political power to do so, but only if the State met all criteria for execution. The justice pointed out that no political entity had ever held a right to do anything, only the exercise of that limited political power inhering in the office.
In a dictatorship, the State holds all political power and all rights. In a liberal democrat Constitutional republic, the people hold all political power and all individual rights. The people choose which portions of their political power are to be delegated to government upon ratification. They never choose to delegate individual rights to government.
Ray W. says
Here is another perspective, Pogo, on the role of strife within a political body.
Between 1695 and 1829, the British government brutally imposed the terms of a series of laws on the Irish populace. These are known as The Penal Laws.
Cecil Woodham-Smith, in The Great Hunger (Old Town Books, 1962), wrote of the effect of The Penal Laws, as follows:
“The material damage suffered through the Penal Laws was great; ruin was widespread, old families disappeared and old estates were broken up; but the most disastrous effects were moral. The Penal Laws brought lawlessness, dissimulation and revenge in their train, and the Irish character, above all the character of the peasantry, did become, in Burke’s words, degraded and debased. The upper classes were able to leave the country and many middle-class merchants contrived, with guile, to survive, but the poor Catholic peasant bore the full hardship. His religion made him an outlaw in the Irish House of Commons he was described as ‘the common enemy’, and whatever was inflicted on him he must bear, for where could he look for redress? To his landlord? Almost invariably an alien conqueror. To the law? Not when every person connected with the law, from the jailer to the judge, was a Protestant who regarded him as ‘the common enemy’.
“In these conditions suspicion of the law, of the ministers of the law and of all established authority ‘worked into the very nerves and blood of the Irish peasant’, and, since the law did not give him justice, he set up his own law. The secret societies which have been the curse of Ireland became widespread during the Penal period, and a succession of underground associations, Oak Boys, White Boys and Ribbon Men, gathering in bogs and lonely glens, flouted the law and dispensed a people’s justice in the terrible form of revenge. The informer, the supplanter of an evicted tenant, the landlord’s man, were punished with a dreadful savagery, and since animals were wealth their unfortunate animals suffered, too. Cattle were ‘clifted’, driven over the edge of a cliff, horses were hamstrung, dogs clubbed to death, stables fired and the animals within burned alive. Nor were lawlessness, cruelty and revenge the only consequences. During the long Penal period, dissimulation became a moral necessity and evasion of the law the duty of every god-fearing Catholic. To worship according to his faith, the Catholic must attend illegal meetings; to protect his priest, he must be secret, cunning, and a concealer of the truth.
“These were dangerous lessons for any government to compel its subjects to learn, and a dangerous habit of mind for any nation to acquire.”
Sherry says
Dear Ray W.,
Consider the possibility that the seemingly unending power of being globally connected by the internet has tipped the scales to the point that the massive influence of “propaganda/misinformation/disinformation” just may have made it impossible for any government to compel it’s citizens return to “reason”/ “the rule of law”.
I sincerely hope that is not the case.
Ray W. says
Your concern is the central theme of C. S. Lewis’ Abolition of Man. We may be the super generation that he predicts will learn how to manipulate human thought. All following generations, having lost the capacity of independent thought, Lewis wrote, will be lesser human beings, as the one super generation will so redefine mankind’s capacity to reason so as to destroy God’s divine spark long inhering within all human beings. Eventually, the unreasoning lesser beings will be nothing more than sheep.
Sherry says
@Ray W. Haven’t read the Abolition of Man. . . yet.
Having unrooted our entire lives, in our 70s, to move away from the negativity of Flagler county. . . not sure if I will. I’m thinking I need a good dose of faith in the POSITIVE miracle of human beings. Saying that, unfortunately, C.S. Lewis’ theme certainly seems to have some powerful validity in our current “global” societal and political environment.
I say global because my recent first hand observation of the poorest of the poor in South Africa, was incredibly thought provoking. Hundreds of thousands exist, generally peacefully, in self made shacks of corrugated tin walls held together with scraps of wood. Approximately 1/3 without electricity or plumbing/water. However, the vast majority of men and women we saw in those “townships/informal communities” had a mobile phone in their hand. That “connection” has become more vital than anything else.
Ray W. says
Are we on the right track, part 4.
In a 2023 report, the EIA estimated the global 30-year levelized overall cost of building an electrical generating plant from scratch, starting in 2028, because it takes that long to build certain types of facilities. 2022-dollar value is the comparison rate. This is an estimated average cost because it might cost more to build infrastructure in remote mountainous areas than in plains areas near transportation hubs.
The most advanced utility-grade solar cells available for sale in 2022 converted roughly 23% of solar energy into electricity. Conversion rates for solar cells were roughly 8% forty years ago when solar panel technology was in its infancy. Residential solar panel conversion rates range from 10-20% today. A Chinese company recently released a panel that converts 24.43% of the sun’s energy into electricity, with a promise of no degradation in efficiency over the lifetime of the panel. Panel costs are dropping fast. Conversion efficiency rates are rising.
At least to me, it might not be wiser to build a nuclear facility in Iceland than a geothermal plant. For the same reason, it might be wiser to build a combined cycle natural gas (CCNG) facility in Texas than in Maine. But as you will see below, it is almost always wiser to build a solar farm. Geology and resource availability are important factors to consider when planning to spend hundreds of millions to build a new plant of whatever type.
The 30-year average expected costs per megawatt/hour are:
Offshore wind: $100.34
Ultra-super critical coal: 89.33
Biomass: 77.16
Advanced nuclear: 71.00
Hydroelectric: 57.12
CCNG: 42.72
Geothermal: 37.30
Solar-battery hybrid: 36.27
Onshore wind: 31.07
Solar: 23.22
I remember the howls of derision when Hillary commented in the 2016 election cycle that coal was a dying resource. It has been eight short years. Was she right? What economist in his or her right mind would suggest building a new American coal-fired plant anywhere in America? Just how gullible were the 2016 critics? One candidate was an energy visionary who spoke truth to the gullible among us. Her opponent pandered to the gullible among us for political gain. Twenty years ago, coal plants produced 50% of America’s electricity. Now? 17% and dropping. The coal plants built during and after WWII are reaching the end of their certification cycles. They are not being recertified; it costs too much.
Laurel says
Let’s go back to birthrates. I’m not convinced. I imagine you have noticed the population here lately, but it’s not just here, it’s up and down the coast. My hometown of Ft. Lauderdale has grown from a small city to a concrete jungle of ever rising, overwhelming buildings. The difference between then and now is staggering. People in droves are moving to South Carolina, and now, Georgia. My friend in Connecticut hates going out due to increasing traffic. That’s just here in the U.S., but in other parts of the world, it’s crawling with people. So, instead of 8.1 billion human beings on this small planet, why can’t we be more biologically balanced? This planet did just fine with small clans of people. Not so much now, it’s become so polluted that our very oceans are dying.
Naw, we don’t need so much population. Maybe nature agrees.
Ray W. says
Hello Laurel.
Due to significant shifts in internal migratory patterns, many areas of the country are being hollowed out. Many other regions are filling out. Some are bursting at the seams.
While the national birthrate is dropping, domestic population figures remain somewhat stable, because newborn females take many years to begin having their own children. In time our domestic population, like Japan’s will drop rapidly. This will greatly impact the structural quality of our economy.
We still add some 3 million people per year, yet fewer than 500,000 of the additions come from native born families. Our economic model is becoming overstressed in many different facets of the economy.
The old established political powerbase seems extremely resistant to any change, much less necessary change.
If we ever were to adopt a static population policy, we would have to reshape our economic strategy. We ignore the needs of our children at our peril.
Laurel says
So, the world’s population is just one, big Ponzi scheme? Maybe we should reconsider. The ocean is being fished out. Our lands drilled out. Our waters polluted to the point that clean water is almost impossible to find. Our wildlife becoming extinct at an alarming rate. Our polar caps melting. Our “lungs of the Earth” forests are being demolished. You know I could go on.
Sorry, humans are just another plague and the Earth will balance out eventually. It always does.
Sherry says
Good Morning from Sausalito, Ray W. and Pogo,
Thank you so much, Ray, for the encouraging data on cleaner energy production. While I do not personally have children, and am all too quickly, enjoying the last years of my life, I do passionately care about the future of the human race on this planet.
Although, when I am forced to cover my eyes and ears to muffle the ignorant fear and hate breeding in the bowels of a cult that seems to be hell bent on denying scientific fact and credible data, my faith in the positive evolution of our species is powerfully shaken. What if we somehow manage to keep the earth’s environment safe from utter destruction, but the humanoid creatures who inhabit the globe have de-evolved into. . . What? Subjects of unending war? Subjects of a 21st century “Big Brother” watching their every movement via their phones/TV/car? Subjects of murderous rulers/thugs?
Perhaps “Climate Change” will be easier to to solve than “Human Change”.
Ray W. says
Are we on the right track, part 5.
Forbes ran an article about an unexpected rise in the most recent weekly report on seasonally adjusted claims for unemployment insurance, up from 213k two weeks ago to 231k last week. The more reliable four-week rolling average rate rose from 210,250 to 215k. These two statistics, just two among many evaluative tools used by the independent Fed to gauge the need to adjust lending rates, are important barometers of labor market health.
Since 1967, a term spanning more than 56 years, the number of seasonally adjusted claims for unemployment insurance averages roughly 365k. That means, on average, 365k people are either fired, laid off, either temporarily or permanently, or downsized each and every week. To me, a rise of 4,750 claims in the four-week average of 215k claims that is now 150k claims per week below the historical average cannot be characterized as a bad thing, but that is just me. JimboXYZ might think it terrible, might think it proves that the current administration has destroyed the economy, but that is just him.
Fed officials have stated that a weekly claims number that is lower than average supports, but does not prove on its own, an argument that the national economy is strong. When the Fed raises lending rates, one of the goals may be to raise an unusually low claims rate back closer to average.
Other persuasive evaluative tools are the year-over-year inflation rate, based on CPI data, the posted job openings gauge, the unemployment rate, the total number of unemployed persons in relation to the posted job openings rate, the monthly jobs added report, the total non-farms jobs report, the labor participation rate, and the quarterly GDP report. There are many other reports pertinent to the Fed’s consideration of the lending rate.
The Fed’s core purpose is to manage inflation and to create jobs. Since its formation over a century ago, the Fed’s role is to be independent from political pressure. No administration or congress can pressure the independence of the Fed. No administration controls the Federal Bank’s lending rate. A properly moderated lending rate can temper wild swings in an inflationary economy. Raise lending rates too soon in an inflationary cycle and the rise can choke off an economic recovery. Act too late after inflation begins to rise and a rise in a lending rate can be ineffective in bringing inflation under control.
As an aside, I have lived through 10 recessions. During the Great Recession starting at the end of the Bush presidency and lasting into the first Obama administration (the longest lasting recession in my lifetime), the economy trimmed off 7,393k jobs. During the Trump recession (the shortest lasting recession in my lifetime), the labor forced dropped by 21,888k jobs.
The Forbes reporter wrote:
“A weakening labor market would help bolster the Federal Reserve’s case to bring down interest rates, which would theoretically boost the economy as lower borrowing costs would encourage businesses and consumers alike to take out loans. The Fed operates on a dual mandate to maximize employment and minimize inflation, having raised rates in the first place to cool inflation. News of the larger-than-anticipated, freshly unemployed crowd comes days after the Labor Department revealed job growth that was far weaker than expected in April, with that report jolting markets considerably, sending the S&P 500 to its best day in more than two months.”
FlaglerLive readers will recall that April’s monthly job report reflected an addition of 175k jobs for the month, below the predicted 230k jobs. This raises the important question: Just how good or bad is a monthly report that shows the national economy adding 175k jobs? For reasons I outline below, I would not use “weakening” in the first sentence of the article, were I to author the report. I would use the phrase “less strong.”
For comparison purposes, the Trump administration averaged 180k new jobs each month between January 2017 and February 2020, a span of 37 months. Since former President Trump openly claims that his was the best jobs economy in history, and since many FlaglerLive commenter repeat the claim, then I think it fair to argue that 175k new jobs is good, but less good than a 37-month average of 18ok new jobs.
I went to the BLS monthly reports on total non-farm jobs to check on the number of jobs added during the administrations of each of the last four presidents. I admit that these figures are derived from a slightly different statistical methodology than that utilized by the monthly jobs added report. Since the latter report is an estimate that is consistently revised, to me the total non-farm jobs report is a more reliable way of studying how many actual, not estimated, jobs exist within the national economy during any given month.
During the first 39 months of the Biden administration, the average number of total non-jobs rose by 394k per month.
Those same monthly BLS total non-farm jobs reports show that during the first 72 months of the Bush administrations before the Great Recession hit, the economy added an average of 81k jobs per month.
During the 84 months of the two Obama administrations, the total non-farms jobs figures rose by an average of 144k per month.
To summarize: During those months of positive economic conditions over the past 20 years (excluding the Great Recession and the disastrous pandemic recession, the total non-farms jobs during the last four presidential administrations rose by an average of:
Bush: 81k per month.
Obama: 144k per month.
Trump: 180k per month.
Biden: 394k per month.
If the primary purpose of the Fed raising lending rates is to curb excessive inflation rates (above 2%), and I argue that it is for that purpose, and if a rise in weekly claims for unemployment insurance and a drop in the jobs added rate together form a significant barometer that is useful for the Fed to gauge the effect of the higher lending rates on a weakening labor market, then is it fair to argue that the independent Fed’s goals may be coming to fruition? Do we have a strong economy? Do we have a strong labor market? Are these current strengths enough to withstand a small downturn in each factor? Would a small reduction in the strength of the jobs market help achieve the much sought after but never previously achieved “soft landing”?
Ray W. says
Hello Laurel.
I recall arguing during a college class discussion that if humans were reactionary by nature, as opposed to proactive by reason, then societies would always be behind the curve, be correct too late, be wise too slowly.
Here we are. Passing laws prohibiting small government from passing ordinances that protect outdoor employees from excessive heat, pumping millions of dollars to move sand onto a missing beachfront, arguing that coal is a better form of energy production than wind.
I am about to start a series of comments on the theme of the stupidity of political theater, part 1 to infinity.
Sherry says
@Ray W. Looking forward to that series. You will certainly not be at a loss for examples of “the stupidity of political theater”. My fear is the massive influence of that “theater”.
Regarding your college class discussion of reactionary vs proactive humans, I have a great case in point. BRIEFLY:
In my early days (1970s) of department management, it was common for Fortune 500 companies to use 10 year forecasting in order to create the company’s long termed goals. As the years wore on and “annual” bonus structures focused on more immediate returns, that goal setting period shrank dramatically. By the time I shifted my career to developing my own company, at the turn of the century, bonuses/promotions were given out quarterly and “long termed” goals seemed to go by the wayside.
Laurel says
Ray W.: “Reactionary by nature.” Yes, that’s civil service alright. Sometimes it astonishes me that things chug along. “Proactive by reason” is a concept that shoots over the heads of many. They do have a tendency to do as told; proactivity has no immediate reward.