Why are Most Americans Displeased with the Biden Economy?

Polling data reveals that most Americans think that our economy is in poor shape. Inflation is a leading concern regarding the economy. The most recent GDP report was disappointing, and unemployment is up slightly. However, many key statistics don’t look that bad. The rate of inflation has actually fallen over the past two years. The unemployment rate is still low- despite its’ recent increase. Why do most of us think that the economy has been in bad shape recently and is getting worse?

Economist Bryan Caplan refers to polling data that most Americans want government to guarantee affordable supplies of food. Here is one polling question on this issue.

A. It is not consistent with the American way to have a whole sector of the economy dependent on government handouts at taxpayers’ expense. We should trust the market, not the government, to find the right balance between supply and demand.

B. There is nothing more important than food. The government needs to subsidize farming to make sure there will always be a good supply of food and that the price does not go up and down according to the whims of the market.

Only 37% agreed with “A”. 58% agreed with “B”. Consumer feelings regarding food security can be quantified more precisely. The following graphs examine how two measures of inflation affect the University of Michigan Consumer Sentiment index. The graph on the right shows that a higher food CPI decreases consumer sentiment, with a 26% fit. The graph on the left reveals relative weakness of the relation between the nonfood CPI and consumer sentiment, a fit of 21.8%.

Inflated food costs seem to worry Americans more so than inflation does generally, and the largest relative increase in food costs has occurred over the past two years.

The majority of Americans are hypersensitive to relative increases in our food costs. Most Americans want the government to deliver food security, and may vote against politicians who don't live up to this demand. Most Americans seem overly concerned with food costs, and should have more confidence in private food markets. However, voters vote according to how they feel about economic issues, not according to what economic reasoning tells us all about issues.