Economy Great Americans Are Miserable - Road to the Middle Class

WHAT’S WRONG with the Yanks, asks British commentator Gerard Baker? The economy is great, and basically has been for twenty years ever since the Reagan years, with a couple of shallow recessions just to keep things ship-shape. Yet

only 4 per cent of the public rate the economy to be in excellent condition; a further 37 per cent describe it as good. But 59 per cent say it’s either not good or poor. This incongruous misery is reflected in a broader national funk. Only 32 per cent of Americans think the country is on the right track; 54 per cent say it’s headed in the wrong direction.

Now why would the American people think that everything stinks? It could be that their appreciation of the economy always lags its actual performance. They tend to think the economy is in a recession for years after robust economic growth resumes. They only get really optimistic just before a fall.

It couldn’t be, could it, that a sector of the political class are engaged, as they were in the 1980s, in systematically talking down the economy and the nation? Whereas in the 1990s they were regularly fainting in the aisles with wonder at the genius of the Clinton economy? No. That could not happen in a country blessed with an objective, professional corps of news journalists and with a patriotic and loyal Democratic opposition.

At any rate, the objective facts are that the economy of the United States is the envy of the world. We supply-side fanatics think we have an explanation for this. Tax rate cuts. During the administration of the “amiable dunce” Ronald Reagan and the mentally challenged George W. Bush Congress enacted, upon the strong recommendation of the executive branch, significant tax rate cuts. (Note to you liberals: tax rate cuts. There’s a secret in there if you have the intelligence to figure it out.)

Yes. Just like Calvin Coolidge and Jack Kennedy, Reagan and Bush implemented significant tax rate cuts. In the “narrative” of capitalist economics, tax rate cuts are said to lead to significant increases in sustained economic output.

Not that that means anything. Oh no. It’s just a narrative, after all, and there is no reason why any one narrative should be privileged above other narratives.

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.