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thanksgiving
Getting the Economic Facts Straight for Your Big Thanksgiving Dinner Argument
It’s not our job to tell people how they should feel about the economy, but we can at least add some facts as context to common complaints.
Nov 23, 2023
How the economy is doing has always been a contentious topic, particularly when friends and family with different politics gather for Thanksgiving dinner. And the question has gotten even thornier this year, with consumer sentiment and polling data about the economy becoming historically de-linked from official measures of economic health like GDP. It’s not our job to tell people how they should feel about the economy, but we can at least add some facts as context to common complaints.
Myth: “The economy is simply bad under the Biden administration”
In January 2020, the share of Americans saying that the U.S. economy was in “poor” shape was below 10%, but in recent months that share was above 40%. However, the unemployment rate in early 2020 and the middle of 2023 was essentially identical. The share of adults between the ages of 25 and 54 with a job was actually higher in the more recent period. Economic growth in the last quarter of 2019 was 2.6%, while it was 4.9% in the third quarter of 2023. The economy is growing (at least) as fast as it was pre-pandemic, and jobs are more plentiful.
This higher-pressure labor market has substantially eroded inequality in wages. Consider one metric of inequality—the ratio of the 90th-percentile wage (the wage earned by the worker who has higher pay than 90% of the workforce) to the 10th-percentile wage. Between 1980 and 2019, this ratio rose enormously by about 34%. But a full third of this 39-year increase has been erased in less than three years after 2019 because of rapid growth in pay for low-wage workers, which has not been a historical norm. If this inequality reduction sticks, it could well be the single most important development in the economy in decades.
Myth: “Inflation has crushed living standards and that was the Biden administration’s fault”
Inflation was too high for most of the past two years. But, average wages for most Americans are higher today than pre-pandemic even after accounting for inflation. So, jobs are both more plentiful and pay more than they did pre-pandemic.
As for blame, the case for the Biden administration causing inflation is extraordinarily weak. Inflation was global, with every single advanced economy in the world seeing a pronounced increase in inflation, even as these countries took widely divergent responses to the pandemic recession. As of today, the U.S. has substantially lower inflation and lower unemployment than nearly all of our advanced country peers.
Myth: “But prices won’t ever go back down”
That’s mostly right if we’re talking about an average index of all prices in the economy. But these broad indices never really do go down in absolute terms (at least not in modern times). And that’s fine—what matters is the relative growth of wages and prices, and so long as wage growth outpaces price growth, living standards rise. The economy has seen a significant reset of both wages and prices relative to pre-pandemic times. It would be nice to enjoy today’s nominal wages that are 20% higher than in December 2019 while still being able to pay December 2019 prices for everything, but it’s always true that it would be nice to have today’s wages and last year’s (or last decade’s) prices. But that’s not how the economy works.
For specific goods like energy and food, however, prices do often go down. And energy prices are way down relative to recent peaks—peaks driven by global events like the Russian invasion of Ukraine.
Further, some genuine progress has been made in ameliorating long-running cost pressures on U.S. families stemming from health care and education. The American Rescue Plan (ARP) lowered drug prices and provided more generous aid to families buying health insurance in the individual market. And the administration has tried to cancel significant amounts of student debt and expand programs that allow less burdensome repayment plans.
Myth: “The Biden administration kept gas prices high by stopping domestic oil and gas drilling”
For good or bad, this is flat untrue—the U.S. hit an all-time high in gas and oil production in 2023.
Myth: “Debt is out of control in recent years”
The federal government’s debt measured as a share of the nation’s gross domestic product (GDP) has fallen since the first quarter of 2021 (the Biden administration’s first quarter in office). While it is true that the American Rescue Plan boosted deficits substantially in the first quarter of 2021, that was by design and the ARP was the reason why unemployment recovered so quickly in the wake of the pandemic recession as compared with previous crises. But since this planned boost to the deficit jump-started recovery, we have seen some of the largest one-year reductions in federal government borrowing in history. Key Biden administration deficit-reducing actions include a tax on stock buybacks, a minimum corporate income tax, boosted Internal Revenue Service (IRS) enforcement to stop rampant tax evasion and avoidance among the rich and corporations, and reforms to stop pharmaceutical price gouging of public health insurance programs like Medicare.
“So, you’re saying everything’s great now?”
The economy still has plenty of challenges and problems. We allowed a significant and compassionate expansion of the U.S. welfare state undertaken in response to the pandemic to roll back in 2022, causing a huge one-year rise in poverty (and particularly child poverty). Despite a pronounced upsurge in workers’ interest and activism about joining unions, we have not fixed the legal and policy roadblocks to protect this vital right. The federal minimum wage remains at $7.25, and in inflation-adjusted terms has hit its lowest level since the 1950s. Our care economy institutions are in near-crisis and need public investment. Tax rates faced by the richest households and corporations are at the lowest levels in decades.
On each of these issues, however, progress would be made if even a sliver of Republicans in Congress would get on the right side of these issues.
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Thankfulness Buried in the Rubble
A day of thanks? A day of atonement? But where is the day of hope? When a day of peace?
Nov 23, 2023
Much as I love Thanksgiving — seeing my family . . . oh the turkey, oh the cranberry sauce — I feel like maybe a bomb fragment has hit the “thanks” part.
I find myself struggling to let a sense of thankfulness flow, because when I do — and doing so has always been a crucial part of the holiday — suddenly my gratitude for the blessings of my life starts to feel more like luck and, even worse, privilege. Yeah, how nice. I’m thankful for the books in my library. I’m thankful for the air I breathe, for my daughter, my sister, my nieces and nephews and all the friendship, all the love, that fortifies my life. But then . . .
As I give thanks to the walls of my house, as I kiss the computer at which I sit, I hear bombs flying and suddenly I can envision all of it . . . all of it, all of it … being taken from me in an instant. I envision digging for a child in the rubble.
Yes, this current war that is saturating the media — Israel’s assault on Gaza, funded by the United States, emerging from seven and a half decades of Israeli occupation of Palestine — has entered my consciousness in a way I can’t seem to ignore. It’s only one of several hellish wars festering on Planet Earth right now, but I can’t stop hearing the Israeli defense minister seeming to explain all of them: “We are fighting human animals.”
And once again, genocide is just and righteous and necessary. And history’s soul cracks open. The story of Thanksgiving is two cultures embracing and sharing a feast of life. But then one of the cultures stole the continent. As New York Times reporter Maya Salam wrote some years ago: “Thanksgiving facts and Thanksgiving myths have blended together for years like so much gravy and mashed potatoes, and separating them is just as complicated.”
Yeah, stir in the genocide. Stir in the slavery. The holiday starts renaming itself: Thankstaking.
Here’s a frequently left-out fragment of the Thanksgiving story. It’s the story of Tisquantum, also known as Squanto, a member of the Wampanoag tribe in the 1600s. He’s known to be the Pilgrims’ rescuer who, after half the Pilgrim settlers had died during a harsh winter, taught those who were left some necessary survival skills, including how to catch eel and grow corn.
But, according to potawatomi.org, Tisquantum’s story is “less innocent than the narrative that he assisted the Pilgrims with teaching them how to grow crops and take advantage of North America’s bounties.”
What’s generally not mentioned in the classroom is that six years before the Mayflower arrived, in what is now known as Massachusetts, a slave-trader had captured Tisquantum, along with a group of Native Americans, who were taken as captives to Europe. Tisquantum eventually wound up escaping and made his way to England where he learned English. He returned to the American continent in 1619.
As the Potawatomi site explains: “While Tisquantum was overseas, New England’s Indigenous experienced a monumental death rate, with some communities losing nearly every tribal member to the decimating effects of European diseases.
“Upon returning to North American and his village of Patuset, Tisquantum found only piles of bones of his fellow tribesmen killed by the plagues. He realized he was the sole survivor of his village. The illness spread so quickly that many local tribes never had time to bury their dead.
“Where Tisquantum’s village once thrived, the Pilgrims established Plymouth Plantation.”
Tisquantum — escaped slave, sole survivor (because of his capture) of a village wiped out by a plague bequeathed by the Europeans — helped the newcomers learn how to live in their new land. In 1621, the Pilgrims celebrated their successful harvest that year, along with the Wampanoag, who apparently considered themselves allies of the new arrivals. But they weren’t. Instead, genocide ensued.
Wamsutta (Frank) James, a founder of the movement declaring Thanksgiving to be a National Day of Mourning for Native Americans, said in a 1970 speech: “We, the Wampanoag, welcomed you, the white man, with open arms, little knowing that it was the beginning of the end.”
All of which leads me back to the present moment, more or less. A day of thanks? A day of atonement?
As much as the human race has accomplished in the past several hundred thousand years, its evolution hasn’t yet created global social sanity. Despite cries of outrage from the political margins, geopolitical civilization essentially remains organized around the principle of war and conquest: Fragments of humanity are still trying to destroy one another. We’re at a point where our destructive power is so great that we’re on the brink of global suicide.
Sorry to bring this up just as the turkey’s being served. So let me try to find my way back into a spirit of thankfulness, as much as I can muster in the shadow of looming genocide. I am thankful that Oregon Sen. Jeff Merkley recently doubled the number of U.S. senators calling for an Israeli ceasefire in the war — from one (Dick Durbin of Illinois) to two.
Merkley said: “Most importantly, the Israeli people and the Palestinian people must find leaders determined to partner with each other and the world to replace the cycle of hate and violence with both a long-term vision for security, peace and prosperity featuring two states for two peoples, and immediate, concrete steps toward that goal.”
The “thanks” feel small, but the hope is enormous.
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