FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
June 20, 2023

IN THIS ISSUE:

1. Conservativism Is The Highest In U.S. In Over A Decade

2. Americans Also More Conservative On Economic Issues

3. President Biden Misleads Public With Job Creation Claims

4. Student Loan Repayment Pause Made Borrowers Worse Off

Conservativism Highest In U.S. In Over A Decade

According to the most recent Gallup polls, more Americans this year (38%) said they are “very conservative or conservative” on SOCIAL ISSUES than said so in 2022 (33%) and 2021 (30%). At the same time, the percentage saying their social views are “very liberal or liberal” has dipped to 29% from 34% in each of the past two years, while the portion identifying as moderate (31%) remained about the same, near a third.

The last time this high a percentage of Americans said they were socially conservative was in 2012 when President Obama was in the White House, during a period when consistently more US adults identified as conservative rather than liberal on social issues.

The results are based on Gallup’s annual “Values and Beliefs” survey, conducted in May. The survey comes at a time when many states are considering policies regarding transgender matters, abortion and the teaching of gender and sexuality in schools.

The increase in conservative identification on social issues over the past two years was seen among nearly all political and demographic subgroups. Republicans show one of the largest increases, from 60% in 2021 to 74% today. Independents show a modest uptick of five percentage points, from 24% to 29%, while there has been no change among Democrats (10% in both 2021 and 2023).

Americans Are Also More Conservative On Economic Issues

At the same time, when Americans were asked to describe their views on ECONOMIC ISSUES, 44% identified as very conservative or conservative, 21% as very liberal or liberal and 33% moderate. The percentage saying they were conservative averaged 40% between 2020 and 2022. The current figure is the highest since 46% in 2012.

Americans have consistently been more likely to say they are conservative on economic issues rather than liberal, by no fewer than 16 percentage points (in 2021). Typically, the spread is over 20 points as you can see below.

Americans have been more likely to identify as economically conservative rather than liberal in part because Republicans overwhelmingly say they are conservative, but also Democrats are not overwhelmingly liberal.

In 2023, 79% of Republicans identify as conservative on economic issues, while only 48% of Democrats say they are liberal. Additionally, more independents identify as economic conservatives (36%) than liberals (16%). About half of independents say they are moderate on economic matters.

I find the chart above most interesting for several reasons. First, only 4% of Republicans consider themselves to be “very liberal or liberal,” whereas 16% of Democrats consider themselves as “very conservative or conservative.”

The point is, there are more than four times as many Democrats who are conservatives than there are Republicans who are liberals. I think I can explain this. There are reportedly a lot of Democrats who consider themselves to be liberals on social issues but more conservative on economic issues.

This makes sense to me. It says that at least some Democrats, while being fully committed to liberal social beliefs and policies, also understand that liberal economic policies don’t always work out so well. In other words, it may be better to leave the free markets alone and let them work their magic without a lot of political intervention. I think this is smart.

The other observation which jumps out of the chart above to me is the percentage of Republicans who consider themselves “moderate” (16%) versus the number of Democrats who consider themselves moderate (35%). The point is, more than twice as many Democrats identify as moderates as Republicans.

The question is, why? As you might imagine, I have a theory. It is no secret that the Democratic Party has moved significantly to the LEFT (much more liberal) over the last couple of decades. My theory is that the Party has moved too far to the left for many of its members. And rather than identify themselves as “liberals,” they prefer to identify as “moderates.”

That way, they can explain to relatives, friends and colleagues why they are still Democrats even though the Party has shifted to wildly liberal. They can simply say: “Yes, I agree the Party has gotten too liberal, but I’m a ‘moderate’ Democrat.”

In closing, I find these annual Gallup political polls in the spring very interesting. The political season is upon us, and the coming runup to the 2024 presidential election should be fun to watch, especially if Donald Trump is the GOP nominee.

Whether you like Trump or you loathe him, he will definitely make it an interesting race!

President Biden Misleads Public With Job Creation Claims

President Biden likes to brag that his administration has created a record number of new jobs since he took office. On paper, this is true. Since the president took office two and a half years ago in 2021, the economy has generated over 13 million jobs, the largest number of jobs ever created by a one-term president.

However, that number is very misleading since over 9 million of those jobs, or over 70%, are jobs which were lost during the COVID pandemic and have since been recovered. Only about 3.7 million truly new jobs have been created during the Biden administration.

Not only that, there was some discouraging news in the latest unemployment report for May. While the May jobs report showed that 339,000 new jobs were created last month, it also revealed that the number of “discouraged workers,” a subset of the marginally attached who were looking for work but believed that no jobs were available for them, remained at 422,000.

As we can see in the chart below, new job creation under President Biden has not nearly recovered even to the pre-pandemic trend it was on under President Donald Trump. Pre-pandemic, the Trump administration added 6.7 million new jobs versus the 3.7 million added by the Biden administration.

The point is, next time you hear President Biden bragging that he’s created over 13 million new jobs on his watch, just know that he is lying to you. The truth is, only about 3.7 million new jobs have been created since Mr. Biden took office. And make no mistake, the president knows this!

And while we’re on the subject of job creation, let’s be perfectly honest about it: Presidents don’t create any new jobs – the economy does. The whole premise that presidents create new jobs is simply hogwash and they know better. But presidents of both parties do it anyway.

Student Loan Repayment Pause Made Borrowers Worse Off

The over three-year-long moratorium on federal student-loan repayment has been hailed as a godsend for student loan borrowers. While announcing yet another extension of the moratorium in December 2021, President Biden praised it as "badly needed breathing room during the economic upheaval caused by the global COVID-19 pandemic."

However, a new working paper from the National Bureau of Economic Research indicates that borrowers whose loans were frozen by the moratorium actually ended up in a worse position than they started in — and have even accrued more student loan debt.

In March 2020, the Trump administration announced a moratorium on federal student loan payments for 60 days, citing the financial hardship faced by borrowers in the early days of the pandemic. In the three years since, the pause has been extended eight times with a variety of legal justifications. Payments are still currently paused, though the recently signed debt ceiling bill sets a hard expiration date for the moratorium on August 30.

The total cost of the loan repayment pause is estimated to be as high as $5 billion per month, or almost $200 billion by the time repayment starts in September. And all that spending might not have even helped those whom the moratorium was supposed to benefit.

According to the paper, those whose loans were frozen by the moratorium actually took on more debt — borrowing more on credit cards and mortgages and even accruing more student loan debt rather than working to pay off other debt they owe.

By the end of 2021, borrowers who saw their student loan payments paused increased their credit card, mortgage and car-loan debt by $1,800 on average – and even took on an additional $1,500 in student loan debt compared to those whose loan payments were not paused by the moratorium.

Rather than being the "badly needed breathing room" that Biden suggested, the student loan payment pause has actually resulted in borrowers ending up financially worse off than they were before.

Not only did the student loan payment pause cost taxpayers billions, but it also didn't even help decrease the debt owed by those whom the pause was supposed to benefit. This is really sad but it is so common among government-run programs, so we shouldn’t be surprised.

Wishing you all the best,

Gary D. Halbert

SPECIAL ARTICLES

Social Conservatism Is On The Rise In America

President Biden’s Misleading Jobs Claims

Gary's Between the Lines column:
Fed Left Interest Rates Unchanged, No Surprise

 

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