The Winter of American Discontent - A Whipsawed American Electorate Reacts www.forbes-tate.com - Forbes Tate Partners
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The Winter of American Discontent A Whipsawed American Electorate Reacts www.forbes-tate.com
Economic indicators are strong and largely improving – but the American electorate is extremely unhappy
E C ONOMIC OUTLOOK: AME R I C AN OPTI MI S M 3
By most traditional measures, the American economy is recovering well from low points
and in strong shape, even with inflation.
COVID Stock Market
Majority (56%) of Americans say the worst is behind The stock market has reached record highs as the
us1. The omicron variant may be on the rise, but we are economy has roared back from COVID pandemic lows.
in a better place than last year with FDA approval of
vaccines for adults and children as well as booster shots.
Jobs Home Values
Consistent job production has led to more people in the Home values are high for homeowners, as housing
workforce and extremely low unemployment. prices surge to new records. In October, homes sold
faster than in any other October in recent history.
Savings GDP
Families on average have more savings and less debt. While GDP gains slowed in the third quarter as the delta
Average family wealth is at a record high for families at variant peaked, there are signs that the economy could
all income levels. have the strongest growth this year since 1984.
Inflation
1NBC News Poll, October 2021. Inflation is the one clear negative economic indicator.
E C ONOMIC OUTLOOK: AME R I C AN PE SS I MI S M 4
But when it comes to the direction of the country, pessimism reigns – and has for 12 years.
Nation Headed in Right Direction vs. Wrong Track
Data from 1995-20211
2008:
Global Financial Crisis Oct 2021:
Sep 2001: Oct 2013: Jun 2016: Rising inflation
Post 9/11 attacks and the country Government shutdown Pulse nightclub shooting and consumer
comes together
Apr 1995: prices
Oklahoma City 76% 71%
70% Aug 2005: 70% 71%
bombing
Jan 2000: Hurricane Katrina 52%
Bush Inauguration
50% 55%
43% 51%
40%
43%
30% 28%
34% Feb 2017:
22% 21% Post-Trump 22%
inauguration
15% 11% Jan 2009:
Obama’s Inauguration
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
1NBC News and NBC/WSJ Polls, 1995-2021.
E C ONOMIC OUTLOOK: AME R I C AN PE SS I MI S M 5
Over the same period, Americans have held a near non-stop negative outlook about the
economy.
Describe Nation’s Economy as Excellent/Good vs. Not So Good/Poor
Data from 1997-20211
94%
Jan 2003: 90%
88%
Wartime anxieties related Nov 2021:
86%
to the War on Terrorism Rising inflation and
75% consumer prices
74%
2008:
70%
60% Bear Stearns bankruptcy 65%
2007-2008 financial crisis Oct 2013:
55% Government shutdown
1998 – 2000: 2009:
Dot Com Bubble Depths of the Great Recession
2011:
Slow pace of economic recovery
Oct 2006:
Declining inflation rate Nov 2018:
Low inflation
Sep 2001:
9/11 terrorist attacks
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '17 '18 '19 '20 '21
1Washington Post-ABC News Polls, 1997-2021.
E C ONOMIC OUTLOOK: AME R I C AN PE SS I MI S M 6
Despite COVID's retreat, consumers lack confidence.
Index of Consumer Sentiment
November Scores from 1952-20211
110.0
COVID
era
100.0
Consumer Sentiment Score
90.0
80.0
70.0
67.4
66.0 63.7
60.0 2021
1990 2011 Inflation
59.5 Recession Slow pace of
1970s economic recovery
50.0
Stagflation 55.3
2008
Recession
40.0
1957
1979
2001
1952
1953
1954
1955
1956
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Apr-21
Jan-21
Jul-21
Nov-21
1University of Michigan Survey of Consumers, 1952-2021.Voters have turned away from *every* political leader in our country
POLITIC AL OUTLOOK: AME R I C AN PE SS I MI S M 8
President Biden has seen substantial drops across his approval rating, and also lags behind
pre-Trump predecessors.
President Biden’s Approval Rating
Data from 20211
Biden is doing just slightly
Overall Approval Handling the coronavirus Handling the economy better than Trump at this
stage in his presidency
69% among recent presidents.
Trump: 37% approve
Biden: 42%
Obama: 51%
GW Bush: 86%
Clinton: 66%
GHW Bush: 56%
53% 53%
52% 51%
49%
47%
42%
40%
Apr-21 Aug-21 Oct-21
1NBC News Polls, 2021.POLITIC AL OUTLOOK: AME R I C AN PE SS I MI S M 9
Americans dislike both parties and the leaders who represent them.
Image Ratings Net Favorability (Positive – Negative)*
Data from 20211
-29% -22% -15% -12% -9% -8% -8%
1Image ratings from NBC News Polls conducted in August 2021 and October 2021.
*Mitch McConnell rating from Morning Consult-Politico Poll conducted September 2021. The net favorability is (Favorable – Unfavorable).POLITIC AL OUTLOOK: AME R I C AN PE SS I MI S M 10
It's not just politics: lack of confidence extends across many American institutions.
Have a Great Deal/Quite A Lot of Confidence vs. Very Little/None
Data from July 20211
84%
79%
65% 67%
63%
58%
38% 36%
33% 32%
18%
12%
The Presidency The U.S. Supreme Banks Public Schools Big Business Congress
Court
1Gallup Poll, July 2021.What is driving the problem? The "whipsaw" – political, personal, and economic change may be the culprit
DR IV ING THE PR OB LE M: POLI TI C AL C HANGE 12
Constant political change: The last five presidents have started with unified control, and
pushed for large, dramatic political change in opposite directions. This dramatic seesawing
has never happened in American history.
Year Presidency Legislative efforts
1993 Clinton Economic Package, Health Care
Tax Cuts, War on Terror, Social
2001 G.W. Bush
Security Privatization
2009 Obama Affordable Care Act
2017 Trump Tax Cuts
2021 Biden ARP, BIF, BBB
… and Biden's four predecessors all lost their unified Congressional
majorities.DR IV ING THE PR OB LE M: INFLATI ON 13
Inflation is almost at a 40-year high, but even that number may understate
consumers' real-life experience.
U.S. Inflation Rate Over Time, 1921-20211
20
WWII
Recession
15 Stagflation
10
Inflation Rate Percentage
6.8%
5
0
1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 2021
-5
-10
-15
1U.S. Bureau of Labor Statistics.DR IV ING THE PR OB LE M: INFLATI ON (B a c on , C a r s) 14
The speed of these price increases for basic products has dramatic.
The speed and size of the price increase for items over the past few months is larger than we’ve seen in the past 40 years.
From bacon to used cars, prices are skyrocketing.
COVID era COVID era
Average Price of Bacon, 1980-2021 +39.2% Average Price of Used Cars, 1980-2021 +47.7%
Source: U.S. Bureau of Labor Statistics. Shaded areas indicate U.S. recessions.DR IV ING THE PR OB LE M: INFLATI ON (Ga solin e ) 15
The gas price increase has been exceptionally severe.
Gasoline prices are at a seven-year high – and increasing at a record pace, with a 58.1% increase over the past year.
COVID era
12-Month CPI Percent Change, November 20211 Average Price of Gasoline, 2005-20212 +86%
35.0%
Gasoline
30.0% 58.1%
12-month
Increase
25.0%
20.0%
15.0%
10.0%
6.8%
5.0%
0.0%
All items Food Energy All items less food
and energy
Source: U.S. Bureau of Labor Statistics, Chart 1 and 2.DR IV ING THE PR OB LE M: HOME OW NE R S HI P & R E NT 16
While home prices have increased, homeownership rates have fallen at an unprecedented
rate and rent prices are spiking.
Homeownership Rate and Owners’ Equivalent Rent in the U.S. Over Time, 1992-20211
70.0 5.0
69.0
4.0
Percent Change from Year Ago
68.0
3.0
Percent
67.0
2.0
66.0
1.0
65.0
0.0
64.0
63.0 -1.0
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020-
2021
Homeownership Percent Owners' Equivalent Rent Percent Change from Year Ago
1U.S. Census Bureau. Shaded areas indicate U.S. recessions.DR IV ING THE PR OB LE M: PE R S ONAL SAV I NGS 17
While savings rates were high – they have sunk dramatically, which can also lead to
insecurity.
This sets the stage for more pain for the consumer as people go back to spending more and saving less.
Personal Savings Rate Over Time, 2000-20211
30.0
25.0
PSAVERT Percentage
20.0
15.0
10.0
5.0
0.0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2021
Personal saving as a percentage of disposable personal income (DPI), frequently referred to as "the personal saving rate," is calculated as the ratio of personal saving to DPI.
1U.S. Bureau of Economic Analysis. Shaded areas indicate U.S. recessions.DR IV ING THE PR OB LE M: S UPPLY C HAI N 18
Americans are experiencing supply chain issues as we head into the holidays. Delays
combined with labor shortages mean that retailers from all industries cannot keep up with
demand and spending habits of the “post-pandemic savings” consumers.
Supply Chain Disruptions by Sector
In the last week, did this business have domestic supplier delays? (percent saying yes)
Manufacturing Amazon, Apple warn supply-
Retail Trade chain woes, labor shortage
Accomodation and Food Services could hamper holiday season
Construction Tech giants’ woes suggest headwinds
Other Services (Except Public Administration) for smaller companies without their Oct. 28, 2021
Wholesale Trade financial might.
Utilities
Health Care and Social Assistance
Administrative and Support and Waste Management and…
National Average (45%)
Arts, Entertainment, and Recreation
Mining, Quarrying, and Oil and Gas Extraction Americans are mad about the
Transportation and Warehousing economy, but still ready to shop
Educational Services Inflation and supply chain woes aren’t
Information stopping shopping, but they’re
Real Estate and Rental and Leasing Nov. 22, 2021 changing it.
Professional, Scientific, and Technical Services
Finance and Insurance
0 10 20 30 40 50 60 70 80
Source: U.S. Census Small Business Pulse Survey, October 2021.HE ALTH OUTLOOK: C OV ID & ME NTAL HE ALTH 19
Taken together, Americans are suffering from mental health issues at triple the pre-COVID
rate.
Percentage of Adults Reporting Symptoms of
Anxiety and/or Depression Disorder by Age
Percentage of Adults April 2020-October 20212
Reporting Symptoms of
Date 18-29 years 51%
Anxiety and/or
Depression Disorder1
30-39 years 42%
Full Year 2019* 10.8%
40-49 years 38%
April 2020 35.9%
50-59 years 34%
July 2020 40.1% 60-69 years 28%
January 2021 41.1% 70-79 years 21%
October 2021 31.6% 80+ years 19%
1National Center for Health Statistics. 2CDC Household Pulse Survey.What to watch for in 2022
T HE D E M OC R AT IC NE E D 21
Democrats need to see dramatic changes – not just in indicators, but in voters' sense of
stability.
COVID
Americans getting back to normal, and feeling
confident about future protection.
Jobs
A strong job market – with workers STAYING in
positions and feeling confident about their work
status.
Inflation
A dramatic return to low inflation – particularly
across day-to-day items.
… but could any of this defy the sour, distrustful mood that hasn’t spared
either party over the last 20 years?2022 OUT LOOK : A D AVA NTA GE GOP 22
Presidents almost always lose seats in midterm elections.
Over the past 7 midterms, the president’s party lost an average of 26 seats in the House and 4 in the Senate.
President’s Party President’s Party
Year Presidency President’s Party Gain/Loss of House Gain/Loss of Senate
Seats Seats
1970 Nixon R -12 +1
1974 Ford R -48 -4
1978 Carter D -15 -3
1982 Reagan R -26 +1
1986 Reagan R -5 -8
1990 H.W. Bush R -8 -1
1994 Clinton D -54 -8
1998 Clinton D +5 0
2002 G.W. Bush R +8 +1
2006 G.W. Bush R -30 -6
2010 Obama D -63 -6
2014 Obama D -13 -9
2018 Trump R -40 +2
Source: Brookings Institution.2022 OUT LOOK : A D AVA NTA GE GOP 23
The generic ballot shows the hill that Democrats need to climb…
Democrats traditionally
need a 4 (or more) point
advantage on the generic
ballot to break even.
History is on the GOP's
side: only one first-term
incumbent has gained
House seats in the last half
century – and most have
lost substantial numbers.
Source: FiveThiryEight.2022 OUT LOOK : A D AVA NTA GE GOP 24
Unless things change, the GOP has a simple message – the American
dream isn't working.
Baseball: MLB on lockout.
Hot dogs, apple pie: Prices for ingredients are way up.
Chevrolet: Six week to six month waits for new cars.CON TACT 25
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