Speaker 1: With the twenty twenty four US presidential election already picking up,
Speaker 1: we're once again hearing big promises from the candidates about
Speaker 1: how they'll make life better for you. Guessed it, the
Speaker 1: all important middle class.
Speaker 2: The working class, the middle class. That's who built this country.
Speaker 3: And by the way, the middle class build American and
Speaker 3: unions built the middle class.
Speaker 4: Look at the economy. The Biden administration is doing all
Speaker 4: it can to make it harder for the average family
Speaker 4: to make ends meet and to attain and maintain a
Speaker 4: middle class lifestyle. The bill for the massive borrowing, spending
Speaker 4: and debt and record printing of money by the Fed
Speaker 4: that's falling on the American people.
Speaker 1: Bloomberg Senior writer Sean Dunnan is back on the show
Speaker 1: today to tell us why the middle class isn't necessarily
Speaker 1: such an easy group to pin down or pander to.
Speaker 2: The American middle class is one hundred million outs, and
Speaker 2: we often talk about those folks as a kind of
Speaker 2: amorphous mass that all share these common traits, and it's
Speaker 2: an incredibly diverse population. It's black and white and Latino.
Speaker 2: It's older, it's younger, it's a Republican, it's Democrat, it's
Speaker 2: increasingly independent.
Speaker 1: Sean and a team of reporters went out to speak
Speaker 1: to middle class voters about their lives and how their
Speaker 1: circumstances will influence who gets their vote.
Speaker 5: I've never needed to be the wealthiest person, but I
Speaker 5: need to have enough that I feel secure.
Speaker 6: And I have still one child in college. We assist
Speaker 6: her with school in housing. I just don't know how
Speaker 6: much longer I can do that with prices going up.
Speaker 1: I'm Wescasova today on the Big Take. What does the
Speaker 1: middle class really want? Sean. Good to see you again.
Speaker 2: It's so wonderful to be here.
Speaker 1: So on our very first show, you and I were
Speaker 1: talking about the fortunes of the American middle class, and
Speaker 1: we're back again talking about it eight months later. What's
Speaker 1: changed because you've been doing quite a bit of work
Speaker 1: on this.
Speaker 2: So we're spending a lot of time looking at what
Speaker 2: we think of as the economic health of the American
Speaker 2: middle class. And that American middle class is those one
Speaker 2: hundred million people, those hundred million adults who make between
Speaker 2: forty five thousand dollars and one hundred and eighty five
Speaker 2: thousand dollars a year or so, and who have wealth
Speaker 2: of just under one hundred thousand dollars in assets to
Speaker 2: just over a million dollars in assets. We think that
Speaker 2: covers a pretty good portion of the American economy, and
Speaker 2: that's a portion of the American economy that is being
Speaker 2: hit by a number of different factors over the last
Speaker 2: year or the last couple of years really through the pandemic.
Speaker 2: One is the inflation we've all been watching and feeling.
Speaker 2: But they're also being hit by the reaction from the
Speaker 2: Federal Reserve in raising interest rates to that inflation as well,
Speaker 2: which has hit their wealth, and it's hitting the cost
Speaker 2: of their debt. In that American middle class, as we
Speaker 2: all probably know, has a lot of debt, whether it's
Speaker 2: in the form of mortgages, car payments, credit card balances,
Speaker 2: or student loans. And so we're watching this American middle
Speaker 2: class closely get buffeted by this end of an era.
Speaker 2: And that's the end of an era of easy money,
Speaker 2: low interest rates that have made life pretty good for
Speaker 2: the American middle class for over a decade.
Speaker 1: And even in the time since we last talked about this,
Speaker 1: these wins that are buffeting the middle classes you describe it,
Speaker 1: have picked up and you found some pretty significant increases
Speaker 1: in just what it costs to live. We're all kind
Speaker 1: of feeling it, but you've put numbers on it. Can
Speaker 1: you give us a picture of that.
Speaker 2: The American middle class, the average household in that middle
Speaker 2: class spend eight thousand dollars more each year than they
Speaker 2: did before the pandemic on household spending. And that's not
Speaker 2: just because it was easy spending and times were good.
Speaker 2: A lot of that was on items you can't escape,
Speaker 2: like transportation. The cost of owning a car last year
Speaker 2: hit over ten thousand dollars annually when you factor in
Speaker 2: car payments, insurance, maintenance, ands on. It's according to triple.
Speaker 1: A and that's the first time ever.
Speaker 2: That's the first time ever. It's cross that lot the
Speaker 2: median house. If you want to go out and buy
Speaker 2: it today. Before in twenty twenty one, that would have
Speaker 2: cost you a monthly payment about twelve hundred dollars. That's
Speaker 2: not twenty four hundred dollars. That's a doubling in the
Speaker 2: monthly payment that we've seen as interest rates have gone up.
Speaker 2: We've seen the Federal Reserve and its most dramatic tightening
Speaker 2: raising of interest rates since the nineteen eighties. In response
Speaker 2: to inflation that was at its highest level in forty years.
Speaker 2: It makes sense, but you know, you can talk about
Speaker 2: that in these kind of vague terms that make economic sense,
Speaker 2: but when you bring it down to the household level,
Speaker 2: there were just all of these costs. The household budgets
Speaker 2: have just been reordered, and that's really hard to escape.
Speaker 1: And we've talked quite a bit on the show about
Speaker 1: how hard it is to find an affordable place to live,
Speaker 1: whether you're renting or buying a house. And one thing
Speaker 1: your research also showed is that how people are taking
Speaker 1: money out of their houses.
Speaker 2: Again, right, so we're seeing people tap their home equity again.
Speaker 2: Over the last ten fifteen years, a lot of American
Speaker 2: middle class families that own homes have made a lot
Speaker 2: in terms of home equity, and they were refinancing during
Speaker 2: the pandemic. Well, now as costs have risen and they're
Speaker 2: trying to keep the household running and pay for new
Speaker 2: expenses like kids going off to college, or healthcare expenses
Speaker 2: or maintenance on the house, they're tapping that equity at
Speaker 2: a much higher level. And that is some people think
Speaker 2: often a sign of financial stress.
Speaker 1: And in recent years, people were able to offset some
Speaker 1: of these pressures because their investments were doing well. The
Speaker 1: marcus were really high, and that too has given us
Speaker 1: all a reality check.
Speaker 2: Yeah, and look, the American middle class was getting wealthier
Speaker 2: over the last fifteen years in a really dramatic way.
Speaker 2: In fact, in a pretty historic way. Over the last
Speaker 2: year and a bit. Since the Federal Reserve started raising
Speaker 2: the interest rates in March twenty twenty two, the American
Speaker 2: middle class has lost somewhere between two and three trillion
Speaker 2: dollars in wealth as an overall class. That's those hundred
Speaker 2: million people. Bring that down to the individual level, and
Speaker 2: that's somewhere between twenty five and thirty thousand dollars in
Speaker 2: lost wealth over that time, which is significant if you're
Speaker 2: talking about adults that are earning between forty five and
Speaker 2: one hundred eight thousand dollars a year. It's a big
Speaker 2: chunk to take. People say that's paper wealth. Well, paper
Speaker 2: wealth is also what you borrow against, right, It's also
Speaker 2: the thing that helps you finance the longer term investments
Speaker 2: like your kid's education. So many American families draw on
Speaker 2: home equity and their wealth to pay for their kids college,
Speaker 2: for example.
Speaker 1: And to add to this, list of challenges is also
Speaker 1: that we're starting to see more layoffs across industries, whereas
Speaker 1: in the last several years that job market has been
Speaker 1: incredibly strong.
Speaker 2: If you believe the economists, we are on the cusp
Speaker 2: of what's very likely to be a recession, certainly a
Speaker 2: slowing in the economy. Whether we actually get a contraction,
Speaker 2: we don't know yet, but we're starting to see layoffs
Speaker 2: in the tech sector, in finance, anything associated with mortgages.
Speaker 2: We are starting to see manufacturers do some laying off
Speaker 2: as well. And we've just described until now, you know,
Speaker 2: their rising household costs, that decline and wealth. That's all
Speaker 2: in the past. What's ahead is pretty frightening as well,
Speaker 2: potentially or anxiety inducing certainly for the American middle class.
Speaker 2: And that's a possible recession, possibility of job losses. And
Speaker 2: one of the features we've seen in these job losses,
Speaker 2: a lot of them have been white collar jobs so far.
Speaker 1: And so here we are talking about this now at
Speaker 1: the very beginning of another long, contentious presidential election, and
Speaker 1: that gives it an extra layer of urgency too.
Speaker 2: Absolutely, Look, there's an economic reason we're interested in the
Speaker 2: American middle class. Those hundred million adults are at the
Speaker 2: center of a consumer driven US economy. There are the
Speaker 2: people out there in the shops making the big purchases.
Speaker 2: They keep the American economy humming along. Those hundred million
Speaker 2: adults are also at the core of the American electorate.
Speaker 2: How they feel about the economy and how they feel
Speaker 2: about whether it's Joe Biden's manager of the economy and
Speaker 2: his vision for the economy, or whether it's his Republican
Speaker 2: opponent's dueling vision for the American economy. That is going
Speaker 2: to be one of the fundamental issues in this campaign.
Speaker 2: So it's one of the reasons we're going to be
Speaker 2: tracking the American middle class from here to forever.
Speaker 1: I feel like, let's talk about what you did in
Speaker 1: a story, which was to take these big economic numbers
Speaker 1: and bring them to a personal level by talking to
Speaker 1: individual Americans in the middle class and what their experience
Speaker 1: has been like.
Speaker 2: We are, and we're going to be running this through
Speaker 2: the election next year. Have teamed up with Harris the Posters,
Speaker 2: and they are running out a poll every quarter for us,
Speaker 2: and we're able with their cooperation to target this actual
Speaker 2: middle class, to make it a poll of the middle class,
Speaker 2: not just of the broader electorate or registered voters, which
Speaker 2: most posters do, and working with Harris, we've also been
Speaker 2: able to link up with some of these people that
Speaker 2: they're talking to. We did about two dozen interviews with
Speaker 2: people in the middle class. We're also bringing in people
Speaker 2: who we as reporters have met along the way. We've
Speaker 2: spent a lot of time on the road. We've all
Speaker 2: met characters in that middle class who we have stayed
Speaker 2: in touch with, and we're going to be coming back
Speaker 2: to them and liaising with them. And look, you know,
Speaker 2: the four people who we feature in this story are
Speaker 2: really emblematic of a broader class, and there's a couple
Speaker 2: of different themes that we can talk about.
Speaker 1: And each of these people really exemplified one or more
Speaker 1: of these pressures that you were just talking about.
Speaker 2: As you go through the American middle class, everyone has
Speaker 2: individual experience in terms of the Economist's part of the
Speaker 2: reason we're reaching out to all these people.
Speaker 3: Being middle class in America today is not the same
Speaker 3: that it was ten years ago.
Speaker 7: Middle class kind of tends sometimes to be in that
Speaker 7: range where you can afford some things, but you're still,
Speaker 7: you know, not able to maybe get everything you want.
Speaker 2: We have been talking to folks in Florida and Minnesota
Speaker 2: and up in Michigan and New York State, all over
Speaker 2: the country, and what we're trying very hard to do
Speaker 2: is to make sure that we have diversity in terms
Speaker 2: of not just politics there's Republicans, Democrats, and a whole
Speaker 2: lot of independence out there right now, but also in
Speaker 2: terms of race and age and so on. What's very
Speaker 2: clear when we talk about the American middle class and
Speaker 2: we talk about this big population, is that there's a
Speaker 2: lot of different factions within that mass.
Speaker 1: After the break, what do middle class Americans themselves have
Speaker 1: to say about all this? One of the middle class
Speaker 1: Americans who tells about her experience in this story is
Speaker 1: Lori Blumstein. Our Collie Claire Valentine spoke to her, and
Speaker 1: let's listen to some of what she had to say.
Speaker 3: My name is Laurie Blumstein. I'm sixty four years old.
Speaker 3: Was born in Brooklyn, New York, but had been living
Speaker 3: in Florida for the last forty years. My main profession
Speaker 3: for the last forty years was in the finance mortgage business.
Speaker 3: Started out in banking as a tailer and worked my
Speaker 3: way up and then was a mortgage loan processor and
Speaker 3: mortgage a loan closer.
Speaker 2: If you want to look at how the end of
Speaker 2: this era of easy money is hitting the American middle class,
Speaker 2: then Lawya is a pretty vivid example of that. She
Speaker 2: is white retiree in Florida. She was laid off last
Speaker 2: August from her job working in the mortgage industry because
Speaker 2: the mortgage industry just shut down, essentially.
Speaker 1: Something that nobody would have thought just a few years ago.
Speaker 2: Absolutely, and you know, even just a year before that
Speaker 2: was really booming. She's gone from living on a salary
Speaker 2: of roughly one hundred thousand dollars a year to living
Speaker 2: on just under two thousand dollars a month in Social
Speaker 2: Security payments.
Speaker 3: So security is the greatest thing to live on and
Speaker 3: healthcare is not the greatest to have. Once I finally
Speaker 3: can get on healthcare, that is.
Speaker 2: She's moved out of a three bedroom house into a
Speaker 2: smaller condo. She has reset her life in a very
Speaker 2: different way. She's loved to get back to work, but
Speaker 2: she says, I only know one thing, and that's the
Speaker 2: mortgage industry, and right now it's in the toilet.
Speaker 1: And yet what I found interesting about her story too,
Speaker 1: was that she felt like even though her fortunes had
Speaker 1: changed dramatically, she still felt like she was okay and
Speaker 1: plans to take a couple of cruises this year.
Speaker 2: And that's kind of crucial thing that we need to
Speaker 2: keep in mind as we talk about the American middle class. Right,
Speaker 2: being a member of the American middle class means having
Speaker 2: a measure of economic security. It means that when tough
Speaker 2: times hit, you have an ability to write it out.
Speaker 2: And Laurie has reset her life, but she also has
Speaker 2: plenty stashed away so she can have those cruises and
Speaker 2: has a fairly comfortable life.
Speaker 1: And Sean Lourie Blumstein is, it's just one of many people.
Speaker 1: You say, you spoke to it, and you tried to
Speaker 1: get a pretty diverse cross section of American middle class people.
Speaker 2: Absolutely, the American middle class is one hundred million adults,
Speaker 2: and we often talk about those folks as a kind
Speaker 2: of a morphous mass that all share these common traits,
Speaker 2: and it's an incredibly diverse population. It's black and white
Speaker 2: and Latino, it's older, it's younger. It's a Republican, it's democrat,
Speaker 2: it's increasingly independent. So we are trying very hard to
Speaker 2: make sure that we hear from all the different factions
Speaker 2: within that middle class.
Speaker 1: Sean. Another person in the story is Ron Davis, and
Speaker 1: you spoke to him. What did he have to say?
Speaker 2: Ron Davis is a white man married to a black woman,
Speaker 2: living in the suburbs of Minneapolis. He is a business executive,
Speaker 2: and he's a business executive whose fortunes really tell the
Speaker 2: story of the last few years for the American middle class.
Speaker 1: And here he is.
Speaker 5: My name is Ron Davis, and my age is fifty five,
Speaker 5: soon to be fifty six.
Speaker 2: And how do you feel about that?
Speaker 5: Turned it's better than the alternative, So you know, it's
Speaker 5: getting old is not necessarily fun, but it beats not
Speaker 5: getting old.
Speaker 2: He used to run the loyalty program for North and
Speaker 2: South America at Radison, the hotel group. When the pandemic hit,
Speaker 2: he was laid off from them. At the end of
Speaker 2: twenty twenty one, for the first time in his career.
Speaker 2: He found himself unemployed and looking for a job, and
Speaker 2: he was a pandemic victim. Well, he found a job
Speaker 2: in the tech industry. He found a job with GoDaddy,
Speaker 2: where he was running a loyalty program for them. And
Speaker 2: in February this year, he was told that he had
Speaker 2: been laid off by them as well, so he's a
Speaker 2: victim of tech layoffs as well.
Speaker 5: Loyalty is not just about customers to a brand and
Speaker 5: brand love. Loyalty's also about employees, because no one's going
Speaker 5: to be loyal to a brand that their employees aren't happy.
Speaker 2: Ron is a relentlessly cheery person. Despite all of this,
Speaker 2: he will also tell you that he's been lucky and
Speaker 2: that he's managed to stash some money away over time.
Speaker 2: He and his wife, he'll tell you, slightly sheepishly, drive
Speaker 2: his and hers Mercedes. They just bought their twenty one
Speaker 2: year old daughter a Mini. They are in a pretty
Speaker 2: comfortable place as well. But what's interesting with Ron is
Speaker 2: when you talk with him, you also get a sense he's,
Speaker 2: for the first time in his career, perhaps encountered the
Speaker 2: vulnerability that's there in the American middle class.
Speaker 5: Middle class. To me, I guess I would define it
Speaker 5: as somebody who is able to have shelter and food
Speaker 5: and healthcare and those those type of things and be
Speaker 5: able to afford it, but not to the point that
Speaker 5: they're no longer worried about money.
Speaker 2: At all, it's been an uncomfortable few years for him,
Speaker 2: as a man in his fifties being laid off in
Speaker 2: an economy that tends to trend younger.
Speaker 5: I kind of tested retirement at this time and found
Speaker 5: that it's not necessarily for me for a couple of reasons.
Speaker 5: One is I think I would drive my wife nuts,
Speaker 5: and then second of all, I think I still have
Speaker 5: more to give and more to give back.
Speaker 1: Let's talk about another person too, and that's Mail Mills.
Speaker 2: In many ways, he is emblematic a certain new black
Speaker 2: professional middle class that we're seeing in America.
Speaker 1: Our Kellie Claire also spoke to him.
Speaker 7: My name is Mail Mills. I'm thirty seven years old
Speaker 7: from Detroit, and I'm a digital marketer. I'm also an author,
Speaker 7: so going to be doing a lot of promotion for
Speaker 7: a coming book launch.
Speaker 2: If you talk to him again, you scratch the surface.
Speaker 2: He's watched his investments take a hit this year.
Speaker 7: I think being middle class in America today means being
Speaker 7: able to afford a kind of a certain lifestyle, right,
Speaker 7: and so you're in the better neighborhoods with the better schools,
Speaker 7: Maybe you have a degree or things of that nature.
Speaker 7: A fence, a nicer car, certain amenities, and certainly in
Speaker 7: terms of just economically, probably not living paycheck to paycheck.
Speaker 2: He will tell you that his grocery bill each month
Speaker 2: is hired and it's ever been. And he will also
Speaker 2: talk through how he uses five or six different credit
Speaker 2: cards to make ends meet each month and to keep
Speaker 2: the household running.
Speaker 1: You also spoke to a retired former police officer in Texas.
Speaker 1: Let's listen to what she had to say.
Speaker 6: My name is Tammy Reno and I'm fifty six years old.
Speaker 6: I am from Temple, Texas. I retired after thirty years
Speaker 6: in law enforcement.
Speaker 2: She's a white woman, a retiree who lives in Granbury, Texas,
Speaker 2: which is in the outskirts of Fort Worth, with her husband.
Speaker 2: She is, I think it's fair to say, an out
Speaker 2: and out Republican supporter of Donald Trump. And when she
Speaker 2: talks about the economy, she does it through a partisan lens,
Speaker 2: but also when you think about her personal situation, She's
Speaker 2: watched her retirement savings take a big hit in the
Speaker 2: markets over the last couple of years.
Speaker 6: The one thing that I feel the most on is
Speaker 6: our retirements the stock market, and you know, our mutual
Speaker 6: funds and things like that have gone way down. I
Speaker 6: experienced over a twenty percent drop in my retirement funds,
Speaker 6: and I'm worried about it.
Speaker 2: She also talks about going out to the grocery store
Speaker 2: and she's clipping coupons and looking to save and buying
Speaker 2: in bulk and freezing lots of stuff.
Speaker 6: We started changing some of our lifestyle. We don't travel
Speaker 6: near as often, we don't eat out as often. I've
Speaker 6: always been a thrifty person, which helped me save quite
Speaker 6: a bit over the years. I was a single mother
Speaker 6: that was imperative. What it means to me middle class
Speaker 6: in America, I think is the middle class is getting squeezed.
Speaker 6: There's programs for people with less means, there's a lot
Speaker 6: of tax cuts for you know.
Speaker 1: High earners.
Speaker 6: But in the middle we're having to pay all of
Speaker 6: our taxes. We're having to you know, purchase groceries, We're
Speaker 6: having to purchase gas, which it's going high in price.
Speaker 2: She's someone who feels the squeeze in retirement and is
Speaker 2: quite angry about it.
Speaker 1: Then we come back, many fed up middle class voters
Speaker 1: are ditching party affiliations and calling themselves independent Sean as
Speaker 1: we talked about at this start. All the stories we're
Speaker 1: hearing right now are going to prominently figure into people's
Speaker 1: decisions about who to vote for in the twenty twenty
Speaker 1: four presidential elections, Who to vote for for Congress. What
Speaker 1: are you hearing about, how these different pressures people are
Speaker 1: feeling are affecting the way they vote.
Speaker 2: We're entering in a really interesting election in that Joe
Speaker 2: Biden as president has pitched pretty much every policy that
Speaker 2: he does, whether it's economic policy, industrial policy, even foreign policy,
Speaker 2: has aimed at the American middle class and making sure
Speaker 2: that it benefits the American class. American presidents are always
Speaker 2: obsessed with the American middle class because the American middle
Speaker 2: class tends to vote a little bit more than some
Speaker 2: other classes. But Joe Biden is pretty unique in having
Speaker 2: pitched his entire presidency as being about the American middle class.
Speaker 2: Joe Biden, also, when you zero in on his economic policy,
Speaker 2: has really tried very hard to rebuild American manufacturing through
Speaker 2: industrial policy, to create incentives to have new electric vehicle plants,
Speaker 2: new battery plants, semiconductor plants. All of those are aimed
Speaker 2: at building, as he will tell you, new middle class jobs.
Speaker 2: Into the American economy bringing home a lot of those
Speaker 2: jobs that have been out sources, but those are also
Speaker 2: long term projects. A lot of those factories are being
Speaker 2: built now, but they may not be in place before
Speaker 2: the election. In many ways, the election in twenty twenty
Speaker 2: four is going to be a referendum on Joe Biden
Speaker 2: in the American middle class and how it's doing and
Speaker 2: right now. If you look at how the American middle
Speaker 2: class feels about the economy, the polls show that they're
Speaker 2: feeling pretty anxious. Our poll with Harris showed anxiety and
Speaker 2: stress topping the list of emotions for middle class folks
Speaker 2: when they look out at the US economy. We also
Speaker 2: see only about a third of middle class people that
Speaker 2: we pull think that things are going to get better
Speaker 2: in the year ahead in terms of their personal financial situation.
Speaker 2: That's not a good starting point if you're a president
Speaker 2: who's pitching to the American middle class. There is a
Speaker 2: partisan divide in that Republicans tend to view the economy
Speaker 2: as being worse than and to be more stressed about
Speaker 2: the economy than Democrats, but still only about forty percent
Speaker 2: of Democrats say they think that things are going to
Speaker 2: get it better in the yearhead Again, that's not a
Speaker 2: great starting point for a Democratic president. What we hear
Speaker 2: over and over again, also from people in the middle class,
Speaker 2: is that they're waiting to make a judgment. Lourie Blumstein
Speaker 2: will tell you that she is going to vote for
Speaker 2: Joe Biden no matter what. Tammy Pearson will vote for
Speaker 2: Donald Trump or whoever the Republican candidate is, no matter what.
Speaker 2: But we also have a much bigger mass of independence
Speaker 2: in America today. There's a Gallop Tracking poll that shows
Speaker 2: that forty nine percent of Americans now identify as independents.
Speaker 2: Used to be roughly a third Democrats, third independent, third Republicans.
Speaker 2: That's changed over the last few years. And that's true
Speaker 2: of the middle class. And so we're going to wait
Speaker 2: and see how they swing. It's too early to call it.
Speaker 2: But this is the reason we are tracking the economic
Speaker 2: health of the American middle class, because we know that
Speaker 2: American voters care about pocketbook and household budgets.
Speaker 1: Well, what you said earlier is important. The idea that
Speaker 1: despite the fact that people are uncertain about the economy,
Speaker 1: most Americans have hardened their views on who they blame
Speaker 1: for almost anything. But it's that section in the middle.
Speaker 1: And one person who I thought was really interesting was
Speaker 1: mel Mills, who seem to have a very broad view
Speaker 1: of who he might vote for.
Speaker 2: Yeah, and so does Ron Davis, by the way, you know,
Speaker 2: and this is a you know, white man in the
Speaker 2: suburbs of Minneapolis and the black man in the suburbs
Speaker 2: of Detroit, right, two very different people in different parts
Speaker 2: of America, and both of whom feel disenchanted with the
Speaker 2: regular parties and feel like the regular politicians, the Democrats
Speaker 2: and Republicans aren't really speaking to the American middle class.
Speaker 2: Which is really interesting because both of those parties are
Speaker 2: trying very hard.
Speaker 1: And both of them signal that they may not vote
Speaker 1: for the ultimate Republican candidate or for Joe Biden, and
Speaker 1: may go looking elsewhere.
Speaker 2: Right, which is another thing that we may see in
Speaker 2: terms of third party candidates popping up in the election
Speaker 2: next year, and maybe they will bleed off some of
Speaker 2: the votes from the middle class, which could have a
Speaker 2: significant impact on the election.
Speaker 1: We've talked about several of the people you spoke to,
Speaker 1: but you spoke to many more. How do the politics
Speaker 1: line up among people you're talking about? How many people
Speaker 1: are saying they don't want the Democrat or the Republican.
Speaker 2: The common theme you hear from folks is the economy
Speaker 2: and what I'm seeing and the squeeze that I'm feeling
Speaker 2: is causing me to look harder at my political decisions.
Speaker 2: The second thing you hear is I haven't made up
Speaker 2: my mind yet. You hear that a lot. I'm going
Speaker 2: to wait and see who the Republicans decide on as
Speaker 2: a candidate. And then the third thing you hear is
Speaker 2: just this anxiety and stress about the economy and frustration
Speaker 2: out there. There's a lot of policies being aimed at them,
Speaker 2: but the middle class doesn't necessarily think it's feeling the benefits.
Speaker 1: The old cliche in American politics was always that people
Speaker 1: vote their pocket books. That if the economy is good,
Speaker 1: the incumbent wins. The economy is bad, they try somebody else.
Speaker 1: But lately, with culture wars and other issues coming to
Speaker 1: the fore, that's not so true anymore. That sometimes people
Speaker 1: will actively vote against their economic interest because a candidate
Speaker 1: is attractive to them for another reason.
Speaker 2: Yeah, now, looking absolutely like I'm an economics reporter at
Speaker 2: Bloomberg News, a financial news service, I am conscious of
Speaker 2: the fact that I spend a lot more time thinking
Speaker 2: about the economy and economics and all of that data
Speaker 2: than a lot of people do, and that there are
Speaker 2: other issues out there. And we certainly saw that in
Speaker 2: the midterm elections right where a lot of people thought
Speaker 2: that inflation was going to fuel a red wave that
Speaker 2: was going to see the Republicans seize control of Congress,
Speaker 2: possibly even the Senate. That didn't happen. Why didn't it
Speaker 2: happen because these culture wars and other issues like abortion rights,
Speaker 2: guns even enter the debate, and so we certainly are
Speaker 2: likely to see that next year.
Speaker 1: So ultimately, do you think that all of these things
Speaker 1: we're talking about are the thing that swing the election
Speaker 1: or is it just one important thing that goes into
Speaker 1: a big swirling pot. And it's hard to tell whether
Speaker 1: the economy will be one of the most important things
Speaker 1: that people make their choice on.
Speaker 2: I'm going to vote for the big swirling pot. But
Speaker 2: I also think that in some ways, the economy is
Speaker 2: the stock, it's the broth, it's the foundation of that soup.
Speaker 1: And of course, Sean, we're talking about the picture that
Speaker 1: we have in front of us now, and one of
Speaker 1: the reasons you're tracking this over time is it could
Speaker 1: look very different a few months from now if we
Speaker 1: should go into a recession.
Speaker 2: We've already seen the story shift from household budgets and
Speaker 2: the impact of inflation on how househole budgets to now
Speaker 2: the impact of the fight against inflation and those higher
Speaker 2: interest rates on household budgets, whether it's mortgage payments, auto payments,
Speaker 2: credit card payments, student loans, and so on. And I
Speaker 2: think the next shift that we're going to see, we're
Speaker 2: likely to see is the impact of a slowing economy
Speaker 2: and what many economists still expect could be a recession
Speaker 2: either in the fourth quarter of twenty twenty three or
Speaker 2: the first half of twenty twenty four, that election year,
Speaker 2: and that is going to change the picture for the
Speaker 2: middle class. Yet again, one of the numbers I really
Speaker 2: keep in mind is one percent, and that is a
Speaker 2: one percent shift in the unemployment rate equals one point
Speaker 2: six million people in the US losing their jobs. We
Speaker 2: are now at historic lows in terms of unemployment, around
Speaker 2: three to three and a half percent. If we shift
Speaker 2: to four and a half five percent, maybe even five
Speaker 2: and a half six percent, we're going to see millions
Speaker 2: of people lose their jobs. What we've seen so far
Speaker 2: is that a lot of those people have been white collar,
Speaker 2: middle class workers, and we may see a lot more
Speaker 2: of that to.
Speaker 1: Come, Sean, Just so you don't leave us in despair,
Speaker 1: is there another scenario?
Speaker 2: Yeah, Look, the other scenario is that the US economy
Speaker 2: does what it has done so far, it's fair to
Speaker 2: say it this year, and that it's been remarkably resilient,
Speaker 2: and that the labor market and the jobs picture for
Speaker 2: a lot of folks holds up, and that we emerge
Speaker 2: next year from the pandemic and the economic damage that
Speaker 2: we've seen and all of the turmoil that we've seen
Speaker 2: in a much happier place, both of the American middle
Speaker 2: class and for America as a whole.
Speaker 1: Sean, I was great to talk to you. Thanks for
Speaker 1: coming on the show.
Speaker 2: It's always wonderful to be here.
Speaker 1: Thanks for listening to us here at the Big Take.
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