Since December of last year the US economy has added more jobs than there are people in the capital of country’s largest state: California. But you wouldn’t know it by the way it’s being sold.
According to the White House Council of Economic Advisors’ Chairman, Austin Goolsbee, “the overall trajectory of the economy has improved dramatically over the past two years, but there will surely be bumps in the road ahead. It is important not to read too much into any one monthly report.”
I understand the hedging. The unemployment rate is still unacceptably high, with over 13 million people out of work.
But if you aren’t out showing there have been successes in the economy, why would anyone think they exist?
The driver of this recent job growth has been the private sector, which created over 220,000 jobs in February. And this is important because it shows the mindset of private sector hiring has changed from retraction to expansion.
Even the ever-pessimistic members of the dismal science have been trying point out the real economic gains.
Brian Levitt, an economist at Oppenheimer Funds in New York, said, “we have moved into the expansion phase of the economic cycle and the economy is self-sustaining.”
This is also reflected in soaring stock market returns. In 2010 the Willshire 5000, the broadest measurement of US stocks, returned nearly 18 per cent. And through the end of February the market was up nearly 6 per cent for this year.
Think about it. In two years we have staved off a depression, weathered the worst recession in recent memory and even moved to a cycle of expansion.
But a recent Gallup poll concludes that 55 per cent of the country thinks President Obama is doing a poor job making America prosperous.
Why the disconnect?
Some of it is rightfully due to the high number of unemployed. And while you can’t understate the very real impact these numbers have on people’s lives you can easily overstate the amount it is influencing public opinion.
The problems are real. But the president, and his team, are suffering not just from these numbers but from a narrative problem.
Businesses are speaking of the recovery. Economists are speaking of the recovery – in fact they are speaking about a new era of expansion. But elected officials and policymakers can’t do enough to distance themselves from successes.
Treasury Secretary Tim Geithner told The Atlantic the recent jobs report “overstated the strength of the labour market,” even though the unemployment rate fell. Federal Reserve Chairman Ben Bernanke said even though the nation added a million jobs in 2010 it is still well short of the jobs lost in 2008 and 2009.
Everyone knows things aren’t perfect. And I’m not advocating that things will magically be better if we say they are.
But there is something very real in providing hope and optimism; especially when the facts back you up.
The irony is that electeds fear voter backlash if they tout successes when people don’t feel them. But their hedging and timidity will only propagate a narrative of a failed economy. The result? Well if the midterms in 2010 are any guide they’ll lose their jobs anyway.
So how do you sell an economic recovery? You start by letting people know the recovery is real with an emotionally-relevant narrative; after all, entire cities are going back to work. Then you stop hedging.
Stay mindful of the difficulties ahead but tell the stories of the people that are succeeding. You might be surprised about how the narrative changes.
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