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Better Off than Four Years Ago? Compared to What?

Paul Solman and Jared Berstein
Prior to the Democratic National convention, Paul Solman talked with Jared Bernstein to get the party’s economic platform. Bernstein was the chief economic advisor to Vice President Biden from 2009 — 2011. Photo by the PBS NewsHour.

While the Republicans denounced President Obama in Tampa this week, in Charlotte, N.C., Democrats prepared to celebrate him. This election is being framed as a stark choice between radically different economic philosophies, but in both cities, it sounded more like a referendum on the past four years.

Running on economic disappointment: it’s a refrain that spans my sentient lifetime. “Are you better off than you were four years ago?” Ronald Reagan asked about the Jimmy Carter administration in 1980. “It’s the economy, stupid,” said Bill Clinton in 1992, deriding George H.W. Bush. “It’s time for a change,” announced Barack Obama in 2008; so had Dwight Eisenhower in 1952.

Making Sense

Ever since immigrants dispossessed our native predecessors, Americans have expected to get richer. That’s why most folks came here, from the Spanish Conquistadors looking for El Dorado, the fabled “Lost City of Gold,” to Pakistani cab drivers in New York.

In a sense, every presidential campaign poses Ronald Reagan’s question. And since American’s economic expectations have so exceeded our accomplishments in the past dozen years or so, and we so love to blame others for our disappointments, that it should come as no surprise that the heartiest huzzahs in Tampa were prompted by denunciation.

Meanwhile, in Charlotte, I was struck by the tenor of the tour the Democrats had arranged for us. From a print shop to the Mayor to students at the University of North Carolina, Charlotte, to a remarkable advertising executive named Tracy Morgan, the emphasis was constant: on what the Obama Administration had achieved, not what it planned to do differently in the next four years.

As you will be able to see Friday night on the NewsHour, I ended our Charlotte excursion by putting this observation to our tour guide, economist Jared Bernstein.

“We’ve been a lot of places today, and what I’ve kept hearing is let’s protect what we’ve done as opposed to, here’s what we’re going to do in the next four years.”

Bernstein, who served as Vice President Biden’s economic advisor from 2009 to 2011, had an answer.

“I think protecting what we’ve done and implementing it in full is very much part of the agenda over the next four years,” he said. “The Affordable Care Act, financial regulatory reform – neither of those are anywhere near fully implemented and both of them are on the Republican chopping block.”

In 1934, the conservative Chicago Tribune ran this political cartoon, deriding the supposedly socialist profligacy of Franklin Roosevelt’s presidency.

Note that the runaway wagon is following the script of Communist revolutionary Leon Trotsky (lower left), though Trotsky had already gone into exile and Joseph Stalin (on the right) was running Russia single-handed.

The paper reran the cartoon online in 2009 with the caption: “This is a 1934 Chicago Tribune political cartoon that many say rings true in today’s political and economic climate. What do you think?”

In 1934, unemployment was still near 22 percent, though it had come down rapidly from 25 percent when Roosevelt took office. GDP had increased by fully 25 percent in only a year or so, but it was still down a third from where it had been in 1929. The stock market had more than doubled, but the Dow Jones was below 100; in ’29, it had hit 381. In other words, America was still in the throes of a Great Depression and far below economic expectations. Today, we are about six times as rich, per person, as Americans were in 1934. But we are below expectations still.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions

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