If you are among the 8 in 10 Americans who believe the economy is tanking, relax. Never mind that the consumer-price index just hit 8.6 percent. Ignore skyrocketing gas prices. Forget that the gross domestic product shrank at an annual rate of 1.5 percent in the first quarter of 2022 and is expected to shrink further. Disregard the collapsing supply chain highlighted by empty shelves in the grocery store. Dismiss the dizzying descent of the Dow Jones Industrial Average. According to the White House and the legacy media, none of these things matter. The real problem bedeviling the economy is bad vibes.
In a recent Vox article titled, “The bad vibes economy,” Emily Stewart professes herself puzzled by widespread concern about the economy. “This sense of dread is so pervasive that it might surprise you to hear that many aspects of the US economy are generally in good shape right now.” She then recites White House talking points about the unemployment rate — which has only reached pre-pandemic levels because labor force participation has never returned to normal. After dancing around “the elephant in the room” for 200 words or so, she finally gets to a brief discussion of inflation, which she blithely dismisses as “annoying.”
Meanwhile, during a White House briefing last week, press secretary Karine Jean-Pierre was questioned about the public’s pessimistic mood concerning the economy. A reporter asked her the following question: “Why do you think it is that 83 percent of people polled by the Wall Street Journal say the economy is ‘poor’ or ‘not so good’?” Jean-Pierre responded with an all too typical word salad, during which she repeated President Biden’s debunked claim that he feels the public’s pain at the pump because he was raised at a time when the price of gasoline rose precipitously. She then insisted that the economy is historically robust:
We are in a fundamentally different place compared to when the President took office.… I guess what I’m trying to say, Peter, is that we understand that people are feeling — feeling this. They are feeling the increase of prices, which — with food, in particular, right now, and gas. That is — that is something that we understand. What we’re trying to say, what I’m trying to say to you is that the economy is in a better place than it has been historically.
This claim is utterly preposterous, of course. But that problem didn’t prevent Politico from repeating the party line in a post titled, “The vibe recession.” Its author, Ben White, marvels at the latest consumer sentiment report published by the University of Michigan. This closely watched gauge of consumer views “crashed to a record low 50.2, down from 58.4 in May.” White is a little more honest about inflation than Stewart, but he inevitably wanders off topic to offer irrelevant musings about Covid, gun violence, European wars, and the Jan. 6 riot. He then reaches the following brilliant insight: “The vibes, man, are not groovy.”
The idea here, of course, is to create a narrative whereby an increasingly likely recession will have been caused not by Biden administration blunders and wild Democratic spending but by irrationally anxious consumers. Slate Money posted a podcast over the weekend titled, “Bad Vibes Economics,” in which the participants make this very claim. The host, Felix Salmon, suggested that public angst is driven by inflation but the other participants weren’t having any. Elizabeth Spiers, for example, rejects the possibility that the bad vibes have anything to do with facts. She believes the public is being manipulated by evil Republicans:
They don’t genuinely believe that Biden is responsible for it. It’s just politically expedient for them to suggest that he is. And also they were opposed to the stimulus bill, and they don’t want to see it repeated because, you know, as a matter of policy, they don’t like those kinds of economic remedies. So if they can indict it after the fact as being directly responsible for inflation, it behooves them to do that. They’re not making a good faith argument.
The obvious problem with this claim is that serious criticism of Biden’s $1.9 trillion “stimulus bill” has by no means been limited to Republicans or conservatives. Indeed, at least two former Obama administration officials — Steven Rattner and Lawrence Summers — warned the Biden administration and congressional Democrats that the spending associated with the American Rescue Plan would ignite inflation. Rattner took to the pages of the New York Times before the bill became law and issued these words of caution, “Wasting precious dollars that could be better spent can’t possibly be worth the risk of igniting high inflation again.”
Lawrence Summers issued a similar warning in the Washington Post before the bill became law: “First, while there are enormous uncertainties, there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.” Summers was also ignored by Biden and his accomplices — and here we are. Inflation is obviously out of control, and the Financial Times reports that 70 percent of leading economists expect a recession in 2023.
These economists don’t issue predictions based on vibes. This whole concept is nothing more than a rebranded version of the pseudo-scientific Keynesian notion that in times of stress our ability to think rationally is compromised by “animal spirits.” Not coincidentally, Keynes believed that the solution to this was government intervention in the economy. No one but Paul Krugman believes this nonsense in 2022. The problem with the economy is too much government spending and interference in private industry. It isn’t about bad vibes. It’s about incompetent leadership. This would be useful to remember in November.
