Is It Really About the Economy?

If you believe the political pundits and prognosticators, Americans are tightly focused on the upcoming election and that means the economy is top of mind. The conventional wisdom, repeated every election cycle, is that people vote with their wallets and while other issues can animate the campaign, when it comes to politics, economics is king.

But it isn’t elections that bring the economy in focus for people. Financial matters are a daily reality for most people regardless of whether or not there is an election on the horizon. Let’s be honest, when it comes to the economy, we are all like Snoop Dogg with our minds on our money and our money on our minds.

But somehow, every four years or so, we are told “the economy” is the No. 1 concern of Americans, as if we weren’t already aware of that.

It’s not really the economy that politicians and candidates are talking about, but their perspective on the economy. And those competing perspectives are conditioned by political considerations rather than economic realities. At its most basic level, the economy is “good” if you are the incumbents, and it is “bad” if you are the challengers.

But our notions of “the economy” are much narrower than that. The rise of “vibenomics,” the idea that no matter what the statistics say about the state of the economy, how we each individually feel about the economy is what really matters. And there is some truth to that notion.

Personal economics are as much psychological as practical. That is why there are organizations focused on consumer and business confidence. From the 50,000-foot perspective, the U.S. economy is strong, with inflation falling and job growth at a healthy level. But individually the reality may be quite different.

The social science of economics can be a mysterious and baffling discipline for the uninitiated and untrained. The complex statistical formulas and confusing jargon make it hard to understand for many people. And the situation is not helped when politics is added to the mix.

Discussions of platforms and proposals may sound good on the campaign trail, but they are just words in a rhetorical vacuum. The realities of implementing policy alternatives is far more complicated than coming up with a good idea. And since economics is not a science in the same way chemistry or biology is, there are to may intangible variables that can impact the desired outcome to be sure if any program will actually achieve its goals – and don’t forget the possibility of unintended consequences.

The fundamental problem with the politicization of the economy is the definition of what constitutes a “good” economy is different for everyone. Just like it is possible for a publicly traded company to report positive earnings only to see its stock price go down because some analysts thought the results should be better; what is good for one part of the economy may not be good for others.

As political candidates play their game of economic football for electoral gain, it might behoove us to filter out the campaign noise, keep focused on our financial plans and sit back like Snoop and just sip on our gin and juice.