In 1992, in the midst of Bill Clinton’s presidential campaign, his strategist James Carville coined the phrase “it’s the economy, stupid”. In doing so, Carville sought to channel the message internally within the campaign to show that the issue at hand (and where his opponent was weak) was precisely the economy. This phrase has become a cliché in the political world and, like every cliché, it has as many meanings as the people who use it. But what Carville was clear about, and what remains to this day, is that what matters most are perceptions and that, in Clinton’s case, talking about economics was just that.


Michelle Bachelet’s interview this week, in which she evaluated the economy as “weak” shows that she and her team have absolute clarity about Carville’s message. Bachelet used figures showing an increase in unemployment to argue that the country was not moving as fast or as hard as Sebastián Piñera promised. Her analysis was neither detailed nor complex, she simply outlined a simple idea and let it run. In doing so, she skillfully took advantage of the decline in government polls.

Both President Piñera and the Finance Minister picked up the glove. Both were responsible for repeating the important economic figures that show that the country is growing at an unprecedented rate in the last 4 years, that all indicators show that we are emerging from stagnation and that, compared to the last government, the current economic team seems to be on a very good path. To reinforce the message, they used the same sayings as Bachelet in which she implies that growth was not her priority. A successful, but insufficient strategy.

The fall in the polls is not simply a couple of unlucky statements by a minister who came out in the change of cabinet, but consists of the classic confrontation between expectations and reality. Unlike in previous periods, today governments have less and less honeymoon time. In addition, as a second term president, there is less patience in the electorate. That’s why the phrase “weak economy” is so communicationally effective: expectations are not being met as quickly as expected.

The government’s dilemma is complex. The take-off of the economy not only depends on the action of the government, but we find ourselves in an uncertain scenario due to the U.S. threats of trade war. Moreover, as the government correctly pointed out, the rise in unemployment is a direct result of greater optimism about finding work, but it can put more pressure on the labour market than necessary.

People’s assessment of the economy has little to do with concrete figures and much to do with perceptions and expectations. But, for the same reason, the road is longer than a couple of statements. Only with structural reforms to improve competitiveness, modernize the state and simplify the tax system can Chile make a major leap in growth and job creation in the short term.

After 4 years of strong stagnation and downward economic assessment, expectations are higher than ever. The great challenge for the government is to move forward and communicate at the same time. It is to be hoped that the President and the Minister of Finance will do well in this task.