Is Nancy Pelosi a secret agent for the Republican
Party? Sometimes you have to wonder. Her latest outburst, in which she
derides the accelerating economy and declining unemployment, is so
nonsensical that it demeans Democrats’ credibility, shows them to be
remarkably out of touch with average Americans and underscores the
poverty of their competing platform. It isn’t the first time Pelosi has
given GOP candidates rich fodder for ridicule; remember how she compared
thousand-dollar bonuses to “crumbs?” That’s a clip that will show well
in midterm campaign ads.
Pelosi’s latest Twitter sensation came amidst her
weekly press conference, at which she scorned the improving jobs
situation. Here’s a direct quote: "(P)eople say, ‘Oh my goodness, ...
people are saying the unemployment rate is down, why isn’t my purchasing
power increasing? So, this isn’t just about the unemployment rate, it’s
about wages rising in our country, so that consumer confidence is
restored.”
Unhappily for Nancy, but happily for the U.S., consumer
confidence doesn’t need “restoring” – it is actually booming. The
Conference Board reported
just this week that its Consumer Confidence Index rose 2.4 points in
May, and reached its highest reading in more than 17 years. Lynn Franco,
the Conference Board’s Director of Economic Indicators, said in a press
release, “Overall, confidence levels remain at historically strong
levels and should continue to support solid consumer spending in the
near-term.” Take that, Nancy!
The Conference Board survey echoes other such measures,
all of which point towards continued growth and nearly all of which
moved sharply higher after Donald Trump was elected president. In
December 2016, the confidence index rose to 113.7, the highest level
since July 2007, beating expectations by a wide margin. At the time,
Franco noted that the so-called “expectations” part of the survey “hit a
13-year high.” The December 2016 report from the University of Michigan, which also tracks consumer sentiment, showed the highest optimism level since August 2001.
Those figures are impressive. Note that
at no time
during Barack Obama’s presidency did consumers feel similarly upbeat,
despite the president’s personal popularity and his promises of “hope
and change.” He delivered plenty of change; hope, not so much. Certainly
the financial crisis helped keep optimism in check. But the recovery
began, according to the National Bureau of Economic Research,
in June 2009. For the next seven and a half years the country was
subdued by a thin overhang of anxiety and caution; that cloud lifted on
November 8, 2016, and there has been no turning back.
Nancy Pelosi has probably not looked for a job for a very long time, so the good news on hiring may not matter much to her.
Confidence is key. With consumer spending accounting
for 70 percent of the economy, how people feel about their prospects
guides their decisions to buy a house or a car, whether to invest or to
save. Instilling optimism about their personal outlook is essential to
an expanding economy.
A recent Pew survey
indicates that 58 percent of the country thinks the economy is doing
well, the most since before the financial crisis, and up from 44 percent
last year. That’s the biggest jump ever seen in this series, and only
the second time that a majority of respondents said they were satisfied
with the economy. The assessment is shared almost equally by
Republicans and Democrats. Recent polls show that, increasingly,
Americans give Trump credit for the roaring economy, which has boosted
his approval ratings.
What’s got people feeling more positive? Gallup reports
that 67 percent of Americans think it is a good time to find a quality
job, the highest in 17 years of polling on this topic and up 25 points
since Trump was elected. That reading is not surprising, except to Nancy
Pelosi apparently. All the indicators point to a tightening job market.
For the first time ever there are more job openings than people looking
for work. The vacancies are especially high in manufacturing, which is
gratifying since for years liberal economists such as those who guided
Obama’s economic policies have been telling us the U.S. could no longer
compete as a producer. Over the past year, we’ve added 259,000 jobs in
manufacturing.
Pelosi is concerned that wages are not rising. In fact,
take-home pay is going up, above the rate of inflation, and more
quickly than it did under Obama. Hourly wages rose 2.7 percent
year-over-year in May, while average weekly income rose 3 percent. With
inflation running at about 2 percent, that constitutes real growth,
which is augmented by lower tax bills for most Americans. Part of the
reason that wage gains have been sluggish is that we have seen little
increase in productivity over the past decade. Higher output per worker
allows wages to rise; that increase depends in part on capital
investment by businesses.
Under Obama, businesses lacked confidence to invest for
the future, so assaulted were they by onerous and costly regulations.
Today, with tax cuts that encourage spending and Trump’s aggressive
reduction in regulations, business spending has started to rise. It was
up 9.2 percent in the first quarter, after a 6.9 percent increase in
last year’s final three months. Productivity gains will surely follow,
boosting wages.
Democrats have no response to the accelerating economy.
They are relying on attacks on President Trump to retake the House this
fall, a meager strategy. Republicans running for office will warn
voters that the booming jobs market will disappear should Democrats take
power, thanks to promises from Nancy Pelosi and her colleagues to raise
taxes on businesses and the rich, and to revert to Obama’s
anti-business playbook. They will ask themselves – are we better off
than we were?
Nancy Pelosi has probably not looked for a job for a
very long time, so the good news on hiring may not matter much to her.
After all, she has served in Congress for 30 years. At some point,
Democrats embarrassed by her slipping grip on our economic reality, may
decide that’s quite long enough.
Liz Peek is a former partner of major bracket Wall Street firm
Wertheim & Company. A former columnist for the Fiscal Times, she
writes for The Hill and contributes frequently to Fox News, the New York
Sun and other publications. For more visit
LizPeek.com. Follow her on Twitter
@LizPeek.