The Prospects for Prosperity in the New Year

By Bruce Yandle

2020 is here, so let us consider the political-economic landscape and the long-run outlook. Are expectations high? Low? Both? Let’s take a look.

In a year-end assessment, Wall Street Journal columnist Gerald F. Seib put his finger on what looks like a major puzzle. The matter has to do with a Wall Street Journal-NBC News poll that revealed unusually positive public assessments about how the economy is performing and yet reported an extraordinarily low evaluation of President Trump’s performance.

This mixed message may relate to something I picked up on recently when I surveyed some colleagues, asking if they were optimistic about the future. Most were generally very optimistic, but some serious reservations were also expressed. I will offer more on this later. For now, let’s get back to Mr. Seib’s puzzle.

According to the polling data, when asked what they considered to be the most important story of 2019, more Americans cited the economy than any other topic. And what did they think? The percentage that said the economic performance was the best in years stood at 34 percent, the highest in 30 years. Looking ahead, some 40 percent of those polled said 2020 will show gains over 2019, and only 23 percent saw slower GDP growth ahead. In a nutshell, the polling data revealed a spirit of high optimism about current and future economic wellbeing.

But here’s the puzzlement: High satisfaction with the economy usually translates to strong presidential performance ratings. Not this time. Instead of seeing approval rates of well over 50 percent, which normally might be expected, Mr. Trump’s rating rests at a low 44 percent. Illustrating the extent to which our nation is divided, some 48 percent of those polled said they will vote against Mr. Trump no matter who the Democrats nominate.

It stands to reason that the low presidential assessments are not about the economy. By many measures, partly because of Trump tax cuts and deregulation, the economy is chugging along at a healthy pace. Employment is high, wage increases are outstripping inflation, housing starts are accelerating, consumer spending is taking off, the S&P 500 is hitting new highs, and median family net worth is improving.

The negative opinions have to be about something else. Seib discusses some possibilities, noting that the “president stokes anger as a way to keep his political base galvanized behind him, and aligned against his political foes.” Seib also points out that Mr. Trump’s combative style “leads him and the country to some dark places.” He suggests there are some behavioral issues that are bugging people.

But maybe the answer to the puzzle is about We the People, not Mr. Trump. Indeed, our divisions have been eating away at American politics far longer than the Trump years and are deeply ingrained.

Think about it this way for a minute: Our democracy delivers leaders who reflect who we are, but given the ways in which our system operates, it’s in a somewhat distorted way—a funhouse mirror of sorts. Sometimes, We the People like what we see in that mirror. We like the direction the country is heading and see a handsome likeness. And then there are times when we don’t like the distortion at all. We think the country is headed in the wrong direction; that this is not who we want to be. Indeed, more than half of those polled in the Wall Street Journal-NBC survey said the nation is on the wrong track.

It’s during the latter times that some of us may realize there is more to future wellbeing than better jobs, more income, and fancier cars and homes and flourishing stock portfolios.

I tapped into this a few weeks ago when I sent questions about the future to about 40 friends and colleagues, asking them to think about the next 50 years and how their grandchildren might fare. Would the prosperity they experience be better, worse, or about the same? The response was overwhelmingly positive, with some 85 percent seeing a very bright future for their offspring. But there were some reservations expressed even in the more optimistic messages. And there were the 15 percent who thought otherwise.

What were the reservations and how might our more pessimistic thoughts relate to Mr. Trump’s low approval ratings? Here’s one response that sums it up. The respondent did not mention Mr. Trump or politics at all—the concern was deeper.

I think the world of the future will be better economically, medically, technologically and educationally. But I think that familial, psychologically, spiritually, and morally the world 50 years from today will be the same or worse. Advances in economics, medicine, technology, education and, I would like to add, the incredible personal freedom we now have, will not make the world better. It takes something more. The spiritual, psychological, familial and moral have been grossly weakened, deformed or significantly disregarded … So I am optimistic in many ways, but not all.

As we enter the New Year, we should acknowledge that many problems we see in society are chiefly about us, not our elected officials. They are a reflection—distorted for better or worse—of who we are. That’s encouraging in a sense. Rather than fretting and blaming, we can work to change our own behavior.

Happy New Year!

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Bruce Yandle is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business and Behavioral Science.

This article was sourced from AIER.org