Do economists and policymakers speak a different language from US citizens? A new Economic Policy Institute report claim there is "a widening gap between the ways that everyday Americans and influential elites talk about the economy."
The report is Talking Past Each Other: What Everyday Americans Really Think (and Elites Don’t Get) About the Economy (full text available online) by David Kusnet, Lawrence Mishel and Ruy Teixeira. the authors argue there is a 'great disconnect' between elite opinion and the American middle class:
This disconnect is of profound importance. The elites are making and discussing economic policies in an environment in which—though they may not realize it—they are poorly informed about the views of the very people who will be affected by those policies.
This is of particular importance now that a relatively optimistic elite discourse about strong growth in the gross domestic product and other positive macroeconomic indicators coexists with a sharply negative assessment of economic conditions among the public. ...when they talk about economics, everyday Americans and influential elites seem to be describing two very different worlds and speaking two very different dialects.
This report is an effort to begin bridging the gap between everyday Americans’ understandings of economic issues and the official economic discourse. The issues that the people and the policy makers are trying to discuss are too important for them to be talking past each other.
If these findings point to a new synthesis about how policy makers should talk about and act upon the economy, it is this: The nation should provide greater economic security to hard working families so that they can make the most of expanded economic opportunity. Now, as in the eras of the Homestead Act and the G.I. Bill, Americans need to stand on a solid foundation so that they can reach for their futures. Policy makers who listen to the people will best be able lead in the years ahead.
The report includes a special section that offers 12 suggestions for how to 'speak American' when talking about economics. An interesting read.
See also a related report, The economic disconnect: How both the Left and the Right get it wrong (PDF) posted online. This is a pre-election report prepared for the EPI by Lake Research Partners based on a survey of 1,044 adults in March 2006 and six focus groups conducted with swing voters in Minneapolis, Columbus and Jacksonville in January. Among the key findings:
• While Americans are dissatisfied with the current state of the economy, neither conservative nor liberal elites speak for them. Conservative elites tout economic growth in the face of rising costs while liberal elites portray the middle class as helpless victims, causing average Americans to see both groups as out of touch.
• Over two thirds of the country view the economy negatively. At the same time, without any coherent, compelling narrative from the Right or the Left, many Americans are short on their own solutions to the economic problems facing the country. The public’s central perspective is of a middle class in decline, badly squeezed between rising costs, reduced benefits, and stagnant earnings. The public holds out little hope for the economy improving any time soon, suggesting that these current problems may reflect a structural change.
• While Americans have not quite discovered the solutions to the country’s economic challenges, they approach this debate with definite bad actors in mind. Americans see a close relationship between corporations and politicians that has created, or at least stoked, a culture of greed in America, threatening our national economy and eroding the middle class. These are the main, though not the only, culprits in explaining the current economy.
• Even while acknowledging the obstacles created by this environment of rising costs and stagnant incomes, the public is optimistic about their own chances for achieving economic stability in the future and see the American dream as a reachable goal.
• Those without a college degree are much less positive about how they are doing and hold much greater resentment toward elites and especially corporations.
• Americans see themselves as largely on their own in the current economy, but they are eager for the government to take on a more active role to help ease their financial burden in areas such as health care, energy and education and support greater regulation of the corporate interests that are seen as contributing to these rising costs.
That seems like ground for economic populism and, alas, protectionism.
Hat tip: Daniel Drezner.