People Don’t Know How They’re Being Helped
This chart from a new EPI survey does a lot to explain the public’s sour political mood:
The thing of it is that the public’s belief that the federal government hasn’t been stepping in to help them out is simply mistaken. For example, every single employed person in the United States of America received a tax cut as part of the American Recovery and Reinvestment Act. But as I’ve noted previously the eager beavers in the White House got their hands on some behavioral economics research which indicated that the tax cut would be a more effective stimulus measure if it was implemented in a way deliberately designed to obscure the fact that it was happening from people. And mission accomplished!
Another major invisible way ARRA is helping ordinary people is through aid to state budgets. Virtually every state in the USA has cut spending and/or raised taxes to deal with budget holes. But they’ve done less of this than they otherwise would have. But if you like the idea of police on the streets and teachers in the classroom, then ARRA has stepped in to help you out. But, again, people probably don’t realize this.
But not all of this can be chalked up to program design. Just 36 percent of the public thinks the government has done much of anything for those who’ve lost their jobs. In fact, ARRA extended eligibility for unemployment insurance and heavily subsidized COBRA purchasing, both of which are boons to anyone who’s lost a job. But there’s been much less focus on this stuff in the media than on bank bailouts and mythical death panels, so apparently most people don’t realize it’s even happening.
37 Responses to “People Don’t Know How They’re Being Helped”
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October 1st, 2009 at 8:39 am
As an employer, it is not clear to me that every other employer knows that we even have new tax withholding levels for this year. I did not receive an explicit “Hey, you, employers, this is the new withholding tax table until December, be sure to change your withholding rates” mailing. I received a somewhat cryptic notice in my quarterly 941 newsletter – and had to seek out information. It was not easy.
October 1st, 2009 at 8:39 am
This is one reason why I think any potential Democratic losses in 2010 will be a lot smaller than people are predicting. The Democrats haven’t really been campaigning in the same way as the Republicans, and their metaphorical weapons of choice, whatever successes they chose to remind the public of, haven’t been used. As long as things don’t get worse and the Republcans don’t magically become as popular as an episode of “NCIS,” the Democrats should be fine.
October 1st, 2009 at 8:44 am
Has it ever occurred to Matt that people are really bad at answering surveys correctly?
October 1st, 2009 at 8:51 am
Gotta say that this reflects the administration’s poor messaging — I’ve learned more about the government’s efforts from Bill Clinton’s interviews than anything Gibbs has said.
October 1st, 2009 at 8:55 am
Since the Fed and the government were the sole cause of our present catastrophe, why should people feel that the government is now helping them? The Obama “stimulus” will probably be as big a drag on prosperity as the Bush/Greenspan/Bernanke housing bubble. The government is now re-doing every idiotic scheme that it used in the 1930s to prolong that depression for 16 miserable years.
Would the few survivors of the sinking of the Lusitania be thankful for three or four lifeboats provided by the Germans?
October 1st, 2009 at 8:55 am
If you feel like you’re in a basically crappy situation, you’re not gonna “feel like you’ve been helped,” even if you’d otherwise be in a disastrous situation. And if you’re in a decent situation, you’ll probably report feeling like you’ve been helped, whether you have or not. At the end of the day, all that matters for public opinion on the government’s approach to the economy is how well the economy’s doing in absolute terms.
October 1st, 2009 at 8:55 am
My guess is a lot of those numbers will move more positive as more people become convinced the economy is actually improving. In other words, I think a lot of people have trouble thinking of “helping” in terms of moderating a negative-trending baseline, so they will need to see actual positive trends before being willing to agree to the proposition that the government’s policies have been helping. So in my mind the immediate question remains how people will react to the upcoming period in which the general economy is recovering but the unemployment rate is lagging. Of course the Democrats could get a little lucky, and the unemployment rate could start going down a little faster than people currently expect.
Oh, and I think Brian J made an excellent point. I would add that I strongly suspect that the Glenn-Beckism currently being used to rev up enthusiasm among the Republican base is bound to wind down, and likely already is. These sorts of populist movements tend to have a short lifespan, and this one was born way too early for the purpose of maximizing its influence on the 2010 election.
October 1st, 2009 at 8:58 am
Brklnlbrl – You’d rather they took a Bushian approach of crafting policy to support their messaging, real-world consequences be damned? Like I say above, all that ultimately matters is how the economy actually does. If their tax cut plan helps the economy improve more than another option that would have been easier to take credit for, then in the long run it will have been better politically, precisely because it will have been better for the economy.
October 1st, 2009 at 9:00 am
I see that Chachy made a similar point. I would just suggest that it may not be necessary for the Democrats’ political purposes that the economy be good in absolute terms, as long as people think it is steadily improving. In fact, my understanding is that incumbent approval ratings tend to be most closely correlated with polls that ask variations on the question, “Is the economy getting better or getting worse?”, so if the getting-betters significantly outweigh the getting -worses as of the 2010 election, the Democrats will probably be OK.
October 1st, 2009 at 9:13 am
The thing of it is that the public’s belief that the federal government hasn’t been stepping in to help them out is simply mistaken.
Of course, Matthew is arguing against a strawman here. The poll doesn’t even break out the percentage of people who think that the federal government “hasn’t been stepping in to help them out” – instead, the chart here aggregates those people with people who think that the federal government HAS helped, but only very little.
And, of course, the federal government has indeed helped these people only very little. The tax cuts Matthew talks about are minor – $400 per person? That’s about a dollar a day. It’s no wonder people think that the government is helping them out “very little” – their impression is entirely accurate.
October 1st, 2009 at 9:20 am
I had one paycheck were I received about 9 dollars more than the previous paycheck. Then I went back to getting the same take home pay I’ve gotten every other pay period. If the government wants to use that $9 to claim to have given me a tax benefit I’ll mail it back to them. I won’t given them that satisfaction. I actually am not bitter I get nothing or a negligible amount – but don’t get lessen my burden by a whole $9 and claim to have helped me…
October 1st, 2009 at 9:21 am
Like I say above, all that ultimately matters is how the economy actually does. If their tax cut plan helps the economy improve more than another option that would have been easier to take credit for, then in the long run it will have been better politically, precisely because it will have been better for the economy.
This is probably true. Which is why it was a mistake for the Left to insist that the majority of ARRA involve wasteful spending. Not only has that spending been very slow to roll out (as we know, only a fraction of the money has been spent so far, and a good chunk of it was never due to be spent prior to 2011), but it turns out that the evidence indicates that the multiplier for this spending is below 1 – that is, the spending actually harms the economy, not helps.
So, it turns out that the tax cuts have been minor and the spending has been slow to roll out and probably does more harm than good. Heckuva job, Obama!
October 1st, 2009 at 9:32 am
I think Al is actually right here. With about 10% unemployed, and maybe 15% having very tough times, the plot looks about right. You’re looking at a period of about 2 years, with the 2 stimulus payments and the tax cuts and the mortgage help. That’s probably about 1-3% of takehome pay for someone who is getting by OK.
If the question were, “What has the government done for the people in general?”, “A fair amount” would be the right answer. For the majority of people who are not losing their job or their house, the government has done only a little. As one of those people, I think that’s just fine. For the 10% who are unemployed, they’re doing a lot. For the 14% scraping by, they’re doing some good.
October 1st, 2009 at 9:37 am
For example, every single employed person in the United States of America received a tax cut as part of the American Recovery and Reinvestment Act.
That’s false. The tax cuts in ARRA began phasing out at $75,000 in income for single filers and $150,000 for joint filers and were completely eliminated at $95,000+ for single filers and $190,000+ for joint filers.
October 1st, 2009 at 9:44 am
Which is why it was a mistake for the Left to insist that the majority of ARRA involve wasteful spending.
Just for the record, it is once again being proven as we speak that spending has a much higher multiple than tax cuts, because a large portion of tax cuts get saved instead of spent.
Moreover, it is also being proven that we are going to need further stimulus this upcoming fiscal year, and probably the next as well. So while the unavoidable comparative lag in spending is unfortunate, that is the only reason why ANY tax cuts should have been included in the package, and now the spending is kicking in as planned.
Finally, Barro and Redlick remain hacks. And even as hacks, a close read of their piece indicates they don’t actually have a conclusion to offer about the multiples for the sort of fiscal spending stimulus we are engaging in. They just say coming up with that number is “problematical”, and then move on.
Hence, why it was very much not a mistake for “the Left” (and apparently a solid majority of economists in this field now count as being on “the Left”) to include spending in the stimulus. In fact, the stimulus should have included much more spending, and it didn’t thanks to know-nothings like Al, who are unfortunately still a bit too well-represented in Congress for the good of the nation.
October 1st, 2009 at 9:48 am
That chart is horribly wrong!
Wall Street, bankers, and the rich got a much better deal relative to workers than that chart indicates. Something for every dollar an under 50k person, the millionaire got 100k.
Obama really sucks that bad.
October 1st, 2009 at 9:58 am
MY apparently doesn’t realize what the equity markets returning to a level, what, 50-60% above their lows while the worker is laid-off, goes underwater, takes a pay-cut, or loses benefits means. I myself have a 10% paycut and a rise in co-pays.
Sustaining equity and bond markets at the expense of workers was not FDR’s style.
Hell with it. Matt has signed onto the neo-liberal oligarchy. I wish I could do the same.
October 1st, 2009 at 10:01 am
Has it ever actually occured to you that the reason people don’t think the government is helping them is because the government isn’t actually helping them enough? People think the bankers got so much help because they did. They are more or less fine now. People don’t think they got any help because they are not fine. They keep hearing stories about a recovery and record banking profits, then they look at their own lives and see themselves teetering on the brink still. More than 10% of them don’t have jobs, and another 10% are underemployed. Wages didn’t go up at all in the last decade.
Sure, you tossed some people unemployment benefits that aren’t exactly generous, but you gave rich people billions and billions of dollars. Normal people didn’t get anything but token gestures, and that’s where this survey result comes from. You can keep ignoring data that says voters are unsatisfied if you want, but don’t pretend that the impulse comes from anything but the typical response to cognitive dissonance. That is, ignore the truth in favor of your predisposed notions.
October 1st, 2009 at 10:06 am
The right has been very effective at conflating TARP with ARRA, even though they have nothing at all to do with one another, and TARP was designed and signed by Bush.
What’s more, they’re managing to credit TARP with economic upswings rather than ARRA–and when they do that, it’s Bush’s policy again.
Biden gave a great speech in Cincinnati about the effectiveness of ARRA in Cincinnati–it’s going to revitalize an entire neighborhood, just by spending a few million dollars to create new housing and retail space in an abandoned factory. The speech got very little coverage.
Al is right that we shouldn’t have included tax cuts in ARRA. The tax cuts were put in for the 3 Republicans that voted for it, thereby making it a “bipartisan” bill in the public consciousness. Right? We think of it as being bipartisan, right?
October 1st, 2009 at 10:14 am
The ARRA didn’t get half the funding that 1/2 the funding that the bail-outs and the FED gave to people. The Bail-out money went to what, 10-20k people in all? They used it to buy each-other, buy stocks, and get richer.
The ARRA was spent to prop up 290 million people. I’d say that most Americans have an accurate view as to this governments priorities.
October 1st, 2009 at 10:16 am
Well, I don’t it’s that much of a mis-impression overall, the main thing people are worried about is a combination of dwindling incomes and lack of jobs. People watch as every month hundreds of thousands of people lose more jobs. It’s nice of the gov’t to extend unemployment benefits and all that, but that doesn’t affect anything like a ‘majority’ of people. And that tax cut? It gave me personally a net extra $8 per week. Yipee.
I want to see a jobs bill. A real one. I want to see the government directly hiring people. I want to see this ‘green economy’ happening somewhere other than in people’s speeches and fantasies. I’m losing my job tomorrow, so my perspective is somewhat biased. But I follow all of this stuff pretty closely, and I for one don’t think the administration has done nearly enough to help regular folks through this terrible time. Not even remotely close. They have done some things, yes, but it largely amounts to tinkering around the edges, nothing structural. So far, anyway.
October 1st, 2009 at 10:58 am
Since this summer I’ve seen a number of road work site with signs that read “brought to you by the ARRA” so they aren’t completely oblivious of the messaging and branding.
Wall Street is basically now a GSE (government sponsored entity) as Fannie Mae and Freddie Mac were before they were nationalized.
Interest rates are still at the zero bound, so we’re not out of the woods. But it appears things are turning around. Some of what happened last year was panic, not a relfection of the fundamentals.
October 1st, 2009 at 11:05 am
If there’s no second stimulus, California will be in even greater trouble than it is already. E.g. California universities have been cutting classes and faculty, and it’s likely that entire schools will be shut down next year if there isn’t more help from the federal government.
October 1st, 2009 at 11:14 am
Cases like California raise the interesting question of how much responsibility the federal government should take for dealing with the messes caused not just by national financial problems, but dysfunctional local governments (and maybe dysfunctional electorates). I wonder if the rest of the United States could demand an equity stake in California in return for our help.
October 1st, 2009 at 11:20 am
DTM, ironic that you argue that since you essentially argue that we had no choice but to give in to Banker blackmail or they would drag the entire country down.
Exactly what do you think the effect of letting the largest state in the union sink into third-world territory is going to be? I know you like to pretend that the entire thrust of your personal ideology is something other than “Give rich people money.”, but it’s hard to buy that given your complete lack of consistency. Equity Stake? Are you retarded enough not to know that America already owns California.
October 1st, 2009 at 11:28 am
California is a wealthy state. It has all of the resources necessary to solve all of its problems very, very easily. They simply choose not to do so. Bailing out California would be like bailing out a bank that has a trillion dollars in a vault, but doesn’t want to use it.
October 1st, 2009 at 11:45 am
The assistance to ordinary households is too modest or too indirect for ordinary households to really notice.
It’s too bad servicemembers stationed in war zones don’t get a tax cut, seeing as their payroll taxes are zero.
But at the same time, this makes it different from an ordinary tax cut – tax cuts that nobody notices tend to get spent and not saved. At least they do in my thought experiment; I’ve got no empirical data on this.
October 1st, 2009 at 11:46 am
DTM, ironic that you argue that since you essentially argue that we had no choice but to give in to Banker blackmail or they would drag the entire country down.
Um, we took equity stakes in a lot of the firms, including some of the banks and other financial firms, that we bailed out. That is precisely what I was referring to.
Exactly what do you think the effect of letting the largest state in the union sink into third-world territory is going to be?
Again, I didn’t actually propose that. But I do think the problem noted by Njorl is a serious one.
Equity Stake? Are you retarded enough not to know that America already owns California.
Apparently so, because I have no idea what you mean. How do people in other parts of the United States “own” California?
October 1st, 2009 at 11:48 am
What Njorl said. California has a tremendous amount of wealth, even with the current high unemployment. California also has a famously dysfunctional state government and electorate who refuse to provide funding for the enormous amount of services they have chosen for the state to provide. California is no where near a 3rd world status, unlike places like Alabama, Kentucky, etc which already are there.
October 1st, 2009 at 12:11 pm
Shorter Matt:STFU and be grateful you have a job.
October 1st, 2009 at 12:42 pm
Tons of people have been laid off from state government jobs, including me. The fact that we got the Aide to states didn’t help, because it was too low. Perhaps if it had been twice as much, it would have worked out better. But it wasn’t.
OTOH, I should be getting extended unemployment benefits.
October 1st, 2009 at 12:58 pm
My unemployment doesn’t even cover my rent.
October 1st, 2009 at 4:34 pm
Made me think of this…
http://www.jackandjillpolitics.com/2009/09/five-ways-president-obama-changed-my-life-an-inspirational-video/
October 1st, 2009 at 4:59 pm
DTM Says:
October 1st, 2009 at 11:14 am
Cases like California raise the interesting question of how much responsibility the federal government should take for dealing with the messes caused not just by national financial problems, but dysfunctional local governments (and maybe dysfunctional electorates). I wonder if the rest of the United States could demand an equity stake in California in return for our help.
========================================================
Well between DoD, BLM and USFS it already owns about 45% of the state
October 1st, 2009 at 5:02 pm
California is a wealthy state. It has all of the resources necessary to solve all of its problems very, very easily. They simply choose not to do so. Bailing out California would be like bailing out a bank that has a trillion dollars in a vault, but doesn’t want to use it.
=========================================================
Absolutely
October 1st, 2009 at 5:43 pm
[...] Matthew Yglesias: The thing of it is that the public’s belief that the federal government hasn’t been stepping in to help them out is simply mistaken. For example, every single employed person in the United States of America received a tax cut as part of the American Recovery and Reinvestment Act. But as I’ve noted previously the eager beavers in the White House got their hands on some behavioral economics research which indicated that the tax cut would be a more effective stimulus measure if it was implemented in a way deliberately designed to obscure the fact that it was happening from people. And mission accomplished! [...]
October 1st, 2009 at 7:55 pm
[...] Matthew Yglesias, “progressive”: “Nuh-uh! U R cynical!” [...]