Voters Were Right About the Economy. The Data Was Wrong. [View all]

Here’s why unemployment is higher, wages are lower and growth less robust than government statistics suggest.

By Eugene Ludwig

02/11/2025 12:00 PM EST

Before the presidential election, many Democrats were puzzled by the seeming disconnect between “economic reality” as reflected in various government statistics and the public’s perceptions of the economy on the ground. Many in Washington bristled at the public’s failure to register how strong the economy really was. They charged that right-wing echo chambers were conning voters into believing entirely preposterous narratives about America’s decline.

What they rarely considered was whether something else might be responsible for the disconnect — whether, for instance, government statistics were fundamentally flawed. What if the numbers supporting the case for broad-based prosperity were themselves misrepresentations? What if, in fact, darker assessments of the economy were more authentically tethered to reality?

On some level, I relate to the underlying frustrations. Having served as comptroller of the currency during the 1990s, I‘ve spent substantial chunks of my career exploring the gaps between public perception and economic reality, particularly in the realm of finance. Many of the officials I’ve befriended and advised over the last quarter-century — members of the Federal Reserve, those running regulatory agencies, many leaders in Congress — have told me they consider it their responsibility to set public opinion aside and deal with the economy as it exists by the hard numbers. For them, government statistics are thought to be as reliable as solid facts.

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What we uncovered shocked us. The bottom line is that, for 20 years or more, including the months prior to the election, voter perception was more reflective of reality than the incumbent statistics. Our research revealed that the data collected by the various agencies is largely accurate. Moreover, the people staffing those agencies are talented and well-intentioned. But the filters used to compute the headline statistics are flawed. As a result, they paint a much rosier picture of reality than bears out on the ground.
https://www.politico.com/news/magazine/2025/02/11/democrats-tricked-strong-economy-00203464

Before the election I recall interviews WNYC had on air inviting the public to speak about their experience with the economy. Many had two and some had three jobs. Then WNYC invited economists to speak re: the economy and they were adamant the economy was greatly improved, essentially telling people they were wrong about their experiences.




Eugene Ludwig is chair of the Ludwig Institute for Shared Economic Prosperity and former U.S. Comptroller of the Currency. He is author of The Vanishing American Dream: A Frank Look at the Economic Realities Facing Low- and Middle-Income Americans.