What Richard Hofstadter called the paranoid style in American politics is no longer a marginal phenomenon: Bizarre conspiracy theories are now mainstream on the American right. And one manifestation of this paranoia is the constant dismissal of positive economic data as bogus when a Democrat occupies the White House.
During the Obama years there was a large fraction of “truthers about inflation,” who insisted that deficit spending and monetary expansion must surely cause rampant inflation, and that if official numbers didn’t match that forecast it was only because the government cooked the books.
With inflation falling rapidly over the past year, we have seen some resurgence of inflationary realism. But the more notable development has been the emergence of what we might call recession truthers — a significant faction that seems frustrated by the Biden economy’s refusal, at least so far, to enter the recession they’ve repeatedly predicted or insisted is already underway. on the way
Now, there are some sociological differences between the old inflation truthers and the new recession truthers. The former group tended to be old-school reactionaries still yearning for a return to the gold standard. The new group is dominated by tech bros, billionaires who imagine themselves focused on the future rather than the golden past, more likely to be crypto cultists than gold bugs.
Indeed, the most prominent recessionary right now is none other than Elon Musk:
But the new truthers are, if anything, even dumber than the old truthers.
You might have expected tech billionaires to be well informed about the world – someone like Musk could, if he chose, easily maintain a large research department for his personal edification. (The annual budget because the total Bureau of Labor Statistics is less than $700 million.) Yet they are often, in practice, easy marks for cheats and cheats. I will talk about why later.
But first, let’s ask how we know the recessionists are wrong.
It’s not like governments never falsify economic data; authoritarian regimes do this all the time, and if America eventually becomes authoritarian – a worryingly likely event – it could happen here too.
For now, however, the statistical agencies of the United States remain very professional. They are employed and to a large extent led by civil servants who care a lot about their reputation for integrity. We can be pretty sure that if political appointees were cooking the books, we would be hearing about it from numerous whistleblowers.
Beyond that, while official data is still the best way to track the U.S. economy—no private organization can currently match the resources and expertise of the Bureau of Labor Statistics or the Bureau of Economic Analysis—there are, in fact, many independent sources of evidence about the economic state of the nation. And they all more or less confirm what the official data says.
Consider, for example, the National Federation of Independent Businesses an inquiry of small businesses, which still shows that many of them intend to expand their workforces:
Or consider surveys about purchasing managers, which are often used as early warning indicators of economic change. These surveys look a little less favorable than either the official data or small business indicators, but still do not signal anything that looks like a recession.
Unemployment insurance claims — which represent data collected by states, not the federal government — also point to a still-solid labor market:
Oh, and since inflationary realism, as I said, is also experiencing something of a revival, it’s probably worth noting that private surveys also confirm official reports of rapidly declining inflation:
So why do we see tech bros indulging in conspiracy theories, often citing random Twitter accounts to justify their views?
The answer, I believe, is that tech billionaires are particularly susceptible to the belief that they are uniquely brilliant, capable of instantly mastering any subject, from Covid to the war in Ukraine. They could afford to hire experts to inform them about world affairs, but that would only work if they were willing to listen when the experts told them things they didn’t want to hear. So what happens instead, all too often, is that they go down the rabbit hole: Their belief in their own genius makes them very naive, easy marks for fraudsters claiming the experts are all wrong.
What you need to know, then, is that the economic data is not fake. A recession might happen, but it’s not happening now. And the rich men who claim to know better are actually less well informed than, say, the average reader of The New York Times – because they don’t know what they don’t know, and no one can enlighten them.