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Ask journalists and pundits and professional economists who were active at the time to reflect on their “Jobs Day” rituals back in 2012, and they’ll describe a whole nerdy vibe.
Beat reporters didn’t change anything about how they went about their work. As ever they’d arrive at the Department of Labor early on the first Friday of every month, hand over their communications devices, and receive a brief, early look at monthly employment data compiled and analyzed by the Bureau of Labor Statistics. This process allowed them to draft stories before official release without breaking embargo or tipping off insiders with market-moving information.
What changed is that political junkies, in and outside the industry, were perched over their shoulders, awaiting the news eagerly. They would gather on Twitter and click refresh neurotically until BLS updated its website at 8:30 a.m. The race was then on to post top-line figures: Net new jobs created the prior month, the unemployment rate, the change in the unemployment rate, and revisions to the previous two months’ data.
Jobs Day was suddenly one of the biggest news days of the month, until 2013 rolled around and public interest ebbed.
What was that all about? This ritual mattered to us and our readers because of a consensus understanding (often unspoken) that the jobs numbers would be predictive of the coming election. They would largely determine whether the charismatic but embattled first black president of the United States would be run out of office with his legacy in tatters.
The economy was growing, but only at a modest pace, and we were guided by a sturdy academic finding that growth in the quarters before an election play a large role in determining incumbent re-election prospects. If growth slows, stalls, or reverses in those quarters, it kicks up a huge headwind. If growth is steady or accelerating, it’s much smoother sailing.
This finding fed a view, still widely held, that politics is driven principally by the material well-being of citizens: When the economy is growing, people can feel it on the ground; it makes them feel flush and inclined reward incumbent leaders, irrespective of what’s happening in the pig pen of partisan politics. Because the correlation held tightly, we didn’t consider the possibility that the mechanism worked the other way around. People sense boom times through large, mediated signals, including jobs reports, stock market tickers, advertisements, and conspicuous consumption fads. It didn’t occur to me then, but this is how I, as a teenager in the late 1990s, came to know that the economy was booming: twice-hourly Dow and Nasdaq updates on AM news radio. Ubiquitous celebrations of the bull market. At broadcast outlets across the country, “Another record day on Wall Street,” was recycled copy.
There was no such exuberance in mid-2012, but things were getting better. Barack Obama wove the OK-but-not-stellar economic news into a credible story of steady-as-she-goes recovery from a crisis he’d inherited from Republicans. He won, just as the models said he would and should.
Then, last year, the models failed. A big part of the reason Democrats spent most of the past 12 months floundering and bewildered is that without this guide star, they are lost. If it’s not “the economy, stupid,” they don’t know how to chart a political course for themselves.
Democrats in the Biden era were unusually transparent about the fact that their industrial-policy agenda was also a political stratagem [ [link removed] ] to juice swing-state labor markets. And they executed the strategy very well! The economy was better by just about every measure last year than it was in 2012. But the public turned on Democrats anyhow.
THE PRICE IS WRONG
I reflect on the old days, because Democrats are acting as though politics still works the way it did, or the way they thought it did, back then.
But what if the causal stories suggested by the models were wrong? ...
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