The conservative electorate polarized their opinion of the economy to correlate with which party holds the White House roughly when Obama won his first term and is not going to be bothered with facts for the foreseeable future. Democratic Party politicians believe they can’t show unbridled optimism about economic performance because someone, somewhere, has become down on their luck. Also something that will never change.
Beyond that, the media cannot accurately report on the economy both because journalists are generally ignorant and because modest optimism does not generate clicks.
It is amazing the hoops that people will jump through to justify how administrations are at once solely responsible and yet have nothing to do with roaring markets/economies. Not just that, but when things are good they actually aren’t, because I don’t like who is in charge.
In an "industry" so long dominated by men, the two people currently doing the best work to make complex issues understandable to us amateurs are women (you and Claudia). Once again showing that bringing in nontraditional voices often helps move understanding forward in a new way.
The note about people not believing that inflation has slowed down despite the data being the data makes me wonder how we ever get trust back post-Trump. Might end up being a generational thing, which stinks.
The other issue is that Democrats aren’t great at messaging. Are we not still in the early stages of de-globalization? Or at least reorganizing it? Globalization was always marketed as disinflationary, and now it’s being slowly dismantled, and nobody ever mentions it. Biden seems to be onboard with ending our dependence on globalized manufacturing, he’s left trump’s tariffs in place, and is proactively working to bring important industries back home, but never reminds Americans that there’s a cost associated with that. He’s doing what needs to be done, but failing at explaining it to voters. Trump was chaotic and not careful or thoughtful, but his agenda of decoupling with China was basically correct, just done very badly. Biden needs to explain why and how he’s improving the mess he inherited.
I understand the gist of what you’re saying. But then I go to how EXACTLY does Biden and Dems “remind Americans of the cost of bringing industries back home?” Like is it in a press conference? How many people will watch this? How many people will get the raw footage, not just some partisan hack. He’s out there so many days talking up successes. Do you see it? Does Gertrude in the West Virginia diner? Does she care? Does she understand it? Does she even believe it?
So much of our society snd governance today is run by our lizard brains, not a rational side.
I wanted to add that they’re doing a pretty good job flipping the narrative on the silly Biden impeachment thing (Comer is the big loser now, with his own $200k check to explain) but on inflation they’ve allowed Republicans to dominate the conversation, and inflation is what people really care about.
You’re right, and it’s a little depressing. People expect instant results, and inflation isn’t a thing that happens quickly. I’m sure most people understand that it takes time for retailers and manufacturers to burn through inventories, and higher prices only happen after an extended period of increased costs in manufacturing, shipping, etc.. Maybe just regularly reminding voters who was in office when costs start rising would do some good. I really just want them to fight a little harder, because the trump people sure aren’t going to let up.
The even more depressing thing is that generally, prices don't go down. So those foks waiting for Biden to lower prices on cereal and coffee and hot dogs — well, it's never happening. Kellogg's isn't gonna drop the price of Frosted Fakes, ever.
And the high interest rates that are making people mad about buying a house or car? This is the result of the Fed trying to lower prices of cereal and coffee and hot dogs. Also, not in Biden's court, but he will be blamed.
I really do think Dems are fighting pretty well and lots of folks just think "Just talk more about THIS!" 1) we aren't really in campaign season. 2) It's like trying to convince Christians to convert to Islam. Lizard brains all the way down. (sorry for being so fatalistic)
Not sure I call this "fatalistic." I think you illustrate ample reason for hope.
My sense is that JRB's acutely aware of the messaging context today, and that his political instincts inform him that any effort to counter the dominant message now will just get lost in noise, and will have to repeated later, with each repetition becoming less meaningful. In other words, I believe he's holding his fire until the 90-day pre-election window opens, and wisely.
No worries on being fatalistic! These are strange times. It’s also super weird that people are already cheering for rate cuts, when technically rates are way closer to the norm. than we’ve been for a decade.
Another amazing post. I am about to go though it with a fine tooth comb to understand it better, more deeply, and then share everywhere.
I continue to be befuddled that you you don't believe that corporate profit margins (and buybacks-my words) are responsible for inflation (referencing an older post of yours). I am old enough to remember when my credit card had 7% interest in the 80s. At current cc interest rates, it seems like it puts people on the same hamster wheel experienced by student loan debtors with higher balances than the original loan amount borrowed. It seems like there are ways to help consumers (who truly drive the economy) but [excessive] profit continues to be a tremendous roadblock. Or maybe I misunderstood.
As a miscellaneous note: at work (construction), I convinced my boss to not raise prices on our main products for this entire year. So we're absorbing the manufacturer's increases, while concurrently working to get better pay (via bonuses) & more consistent safety conditions for our workers. I call the discount our inflation buster discount. :) I wish everyone in a position to do so would work to bring the community UP.
Thank you for everything you do and inspiring us to try to actively do better. Knowledge is power.
I vividly recall moments during my youth where I'd be at home, just me and my mom ... The TV would be on and it would be broadcasting some glorious program, about how "everything going on is So Great!"
At the same time as the TV broadcast, my mom would be crying
Moments like that I was thinking how great could it be if my mom is crying?
Does any of it even actually matter at all if my mom is like that?
love the thesis on media's role in economic perception and the state of the world!
our reliance on (social) media and algorithms impact our ability to cultivate intuition about how *we feel* about what's happening in the world – instead, the collective ends up looking to media outlets that are incentivized to paint a narrative that drives clicks and eyeballs. "if it bleeds, it leads"
“where virality is a function of saying wrong things loudly” is the best description of the state of social media.
As a personal finance educator and active in Democratic politics, this mismatched perception is so vexing! It’s tough to counter the perception of a bad economy from either angle, but I have had some success just pointing out the facts in response to “vibes” based complaints. I also always bring the conversation back to the corporations — record profits, low wages, etc. How can we elect officials who have a plan to hold them accountable?
That part highlighting the contrast between 'economic data' and 'public perception' ... Economic data as a measurement reflects conditions experienced, so the data can be in a state where it does not capture the full experience (or the parts of the experience that truly matter to people)
When the concept of economic data is all about the ones measuring the data, it isn't particularly relevant to a specific set of individuals who are outside the measuring group
Avocados are affordable ... There are alternatives available, and all the economic stuff going on can be a signal that indicates the necessity of change
I think one thing missed is how everyone’s focus and well being seems to be aimed at the President. Let’s be real - that’s what underpins so much of the tone of the headlines in media. This is the driver of the discourse. And let’s be real - what can Joe Biden do to lower cereal prices? How does Biden reduce rent? Sure, the kids are mad about him not erasing student loans…but he has done A LOT to reduce many folks’ burden, AND legally, he likely can’t just wave a want and erase it all. Folks are going to be similarly mad when Trump is re-elected and nothing changes. (Or maybe then folks will see the same economic data as positive and their lives better…who knows the magic his dude has over a massive swath of the populace)
We (USA) really were (are) consuming too much petrol and - relatedly - paying too little for it. We really consume too much beef/chicken/pork.
Households could re-calibrate expectations and integrate higher inflows of USDs into some consumer-behavior changes that are not only not that onerous, but potentially enrich relationships and appreciation.
Smaller meat portions, one-two days meatless per week/month (and not super-sizing everything).
Living closer to work or to shopping/entertainment destinations. Carpooling. (Rural folk have some extra dependence related to long commutes, and I get why petrol prices anger them. We need to figure out a way to help them transition to more sustainable tech without stepping on their lifestyle prerogatives too much.)
We're being "worked on" even before the plandemic and debtflation the news was "end of the world" 24/7
The adaptation of climate existentialism to incorporate every weather event and catastrophe propagates anxiety (and shares more than a little with ancient weather cults built around storm gods)
Partisan populism, imposing moral extremes (both ways) only demands rule of law for "the other guy"
And a couple of wars: one seeming to concern thousands of university students while another 1000x larger with possible nuclear engagement is largely shrugged off
Sandy Pentland meant to illustrate the memetic spread of good ideas via social media algorithms with his book "Social Physics" (2014)
It's just so tempting to use it for other purposes? Perhaps 'good idea' is undefinable in the dappled moonlight of human nature.
You've expressed, just about perfectly, what I've been trying to articulate, without much success: it's easier (and lazier) to seem smart by expressing negativity, by criticizing, by tearing down. In order to explain why something's good, one pretty much has to know what one's talking about. This is acutely observable in the realms of arts criticism and science, but it's certainly also true regarding social issues, economics, and policy.
The conservative electorate polarized their opinion of the economy to correlate with which party holds the White House roughly when Obama won his first term and is not going to be bothered with facts for the foreseeable future. Democratic Party politicians believe they can’t show unbridled optimism about economic performance because someone, somewhere, has become down on their luck. Also something that will never change.
Beyond that, the media cannot accurately report on the economy both because journalists are generally ignorant and because modest optimism does not generate clicks.
It is amazing the hoops that people will jump through to justify how administrations are at once solely responsible and yet have nothing to do with roaring markets/economies. Not just that, but when things are good they actually aren’t, because I don’t like who is in charge.
Showing econ love to Ms. Sahm... Love to see it!
In an "industry" so long dominated by men, the two people currently doing the best work to make complex issues understandable to us amateurs are women (you and Claudia). Once again showing that bringing in nontraditional voices often helps move understanding forward in a new way.
Thank you for everything you do!
Agreed! My favorite reads!
The note about people not believing that inflation has slowed down despite the data being the data makes me wonder how we ever get trust back post-Trump. Might end up being a generational thing, which stinks.
The other issue is that Democrats aren’t great at messaging. Are we not still in the early stages of de-globalization? Or at least reorganizing it? Globalization was always marketed as disinflationary, and now it’s being slowly dismantled, and nobody ever mentions it. Biden seems to be onboard with ending our dependence on globalized manufacturing, he’s left trump’s tariffs in place, and is proactively working to bring important industries back home, but never reminds Americans that there’s a cost associated with that. He’s doing what needs to be done, but failing at explaining it to voters. Trump was chaotic and not careful or thoughtful, but his agenda of decoupling with China was basically correct, just done very badly. Biden needs to explain why and how he’s improving the mess he inherited.
I understand the gist of what you’re saying. But then I go to how EXACTLY does Biden and Dems “remind Americans of the cost of bringing industries back home?” Like is it in a press conference? How many people will watch this? How many people will get the raw footage, not just some partisan hack. He’s out there so many days talking up successes. Do you see it? Does Gertrude in the West Virginia diner? Does she care? Does she understand it? Does she even believe it?
So much of our society snd governance today is run by our lizard brains, not a rational side.
I wanted to add that they’re doing a pretty good job flipping the narrative on the silly Biden impeachment thing (Comer is the big loser now, with his own $200k check to explain) but on inflation they’ve allowed Republicans to dominate the conversation, and inflation is what people really care about.
Except I think also that the media keeps harping on inflation, as Kyla details. Bad incentives, bad judgement, blah, blah, blah. ¯\_(ツ)_/¯
You’re right, and it’s a little depressing. People expect instant results, and inflation isn’t a thing that happens quickly. I’m sure most people understand that it takes time for retailers and manufacturers to burn through inventories, and higher prices only happen after an extended period of increased costs in manufacturing, shipping, etc.. Maybe just regularly reminding voters who was in office when costs start rising would do some good. I really just want them to fight a little harder, because the trump people sure aren’t going to let up.
The even more depressing thing is that generally, prices don't go down. So those foks waiting for Biden to lower prices on cereal and coffee and hot dogs — well, it's never happening. Kellogg's isn't gonna drop the price of Frosted Fakes, ever.
And the high interest rates that are making people mad about buying a house or car? This is the result of the Fed trying to lower prices of cereal and coffee and hot dogs. Also, not in Biden's court, but he will be blamed.
I really do think Dems are fighting pretty well and lots of folks just think "Just talk more about THIS!" 1) we aren't really in campaign season. 2) It's like trying to convince Christians to convert to Islam. Lizard brains all the way down. (sorry for being so fatalistic)
Not sure I call this "fatalistic." I think you illustrate ample reason for hope.
My sense is that JRB's acutely aware of the messaging context today, and that his political instincts inform him that any effort to counter the dominant message now will just get lost in noise, and will have to repeated later, with each repetition becoming less meaningful. In other words, I believe he's holding his fire until the 90-day pre-election window opens, and wisely.
No worries on being fatalistic! These are strange times. It’s also super weird that people are already cheering for rate cuts, when technically rates are way closer to the norm. than we’ve been for a decade.
Bless you for talking to folks on the airplane. Thank you for acknowledging the humanity of strangers.
Another amazing post. I am about to go though it with a fine tooth comb to understand it better, more deeply, and then share everywhere.
I continue to be befuddled that you you don't believe that corporate profit margins (and buybacks-my words) are responsible for inflation (referencing an older post of yours). I am old enough to remember when my credit card had 7% interest in the 80s. At current cc interest rates, it seems like it puts people on the same hamster wheel experienced by student loan debtors with higher balances than the original loan amount borrowed. It seems like there are ways to help consumers (who truly drive the economy) but [excessive] profit continues to be a tremendous roadblock. Or maybe I misunderstood.
As a miscellaneous note: at work (construction), I convinced my boss to not raise prices on our main products for this entire year. So we're absorbing the manufacturer's increases, while concurrently working to get better pay (via bonuses) & more consistent safety conditions for our workers. I call the discount our inflation buster discount. :) I wish everyone in a position to do so would work to bring the community UP.
Thank you for everything you do and inspiring us to try to actively do better. Knowledge is power.
I vividly recall moments during my youth where I'd be at home, just me and my mom ... The TV would be on and it would be broadcasting some glorious program, about how "everything going on is So Great!"
At the same time as the TV broadcast, my mom would be crying
Moments like that I was thinking how great could it be if my mom is crying?
Does any of it even actually matter at all if my mom is like that?
love the thesis on media's role in economic perception and the state of the world!
our reliance on (social) media and algorithms impact our ability to cultivate intuition about how *we feel* about what's happening in the world – instead, the collective ends up looking to media outlets that are incentivized to paint a narrative that drives clicks and eyeballs. "if it bleeds, it leads"
Again and again you’re writing masterpieces that I forward to all my closest friends! Just amazing!
“where virality is a function of saying wrong things loudly” is the best description of the state of social media.
As a personal finance educator and active in Democratic politics, this mismatched perception is so vexing! It’s tough to counter the perception of a bad economy from either angle, but I have had some success just pointing out the facts in response to “vibes” based complaints. I also always bring the conversation back to the corporations — record profits, low wages, etc. How can we elect officials who have a plan to hold them accountable?
That part highlighting the contrast between 'economic data' and 'public perception' ... Economic data as a measurement reflects conditions experienced, so the data can be in a state where it does not capture the full experience (or the parts of the experience that truly matter to people)
When the concept of economic data is all about the ones measuring the data, it isn't particularly relevant to a specific set of individuals who are outside the measuring group
Avocados are affordable ... There are alternatives available, and all the economic stuff going on can be a signal that indicates the necessity of change
I think one thing missed is how everyone’s focus and well being seems to be aimed at the President. Let’s be real - that’s what underpins so much of the tone of the headlines in media. This is the driver of the discourse. And let’s be real - what can Joe Biden do to lower cereal prices? How does Biden reduce rent? Sure, the kids are mad about him not erasing student loans…but he has done A LOT to reduce many folks’ burden, AND legally, he likely can’t just wave a want and erase it all. Folks are going to be similarly mad when Trump is re-elected and nothing changes. (Or maybe then folks will see the same economic data as positive and their lives better…who knows the magic his dude has over a massive swath of the populace)
We (USA) really were (are) consuming too much petrol and - relatedly - paying too little for it. We really consume too much beef/chicken/pork.
Households could re-calibrate expectations and integrate higher inflows of USDs into some consumer-behavior changes that are not only not that onerous, but potentially enrich relationships and appreciation.
Smaller meat portions, one-two days meatless per week/month (and not super-sizing everything).
Living closer to work or to shopping/entertainment destinations. Carpooling. (Rural folk have some extra dependence related to long commutes, and I get why petrol prices anger them. We need to figure out a way to help them transition to more sustainable tech without stepping on their lifestyle prerogatives too much.)
But, yeah. I know....
We're being "worked on" even before the plandemic and debtflation the news was "end of the world" 24/7
The adaptation of climate existentialism to incorporate every weather event and catastrophe propagates anxiety (and shares more than a little with ancient weather cults built around storm gods)
Partisan populism, imposing moral extremes (both ways) only demands rule of law for "the other guy"
And a couple of wars: one seeming to concern thousands of university students while another 1000x larger with possible nuclear engagement is largely shrugged off
Sandy Pentland meant to illustrate the memetic spread of good ideas via social media algorithms with his book "Social Physics" (2014)
It's just so tempting to use it for other purposes? Perhaps 'good idea' is undefinable in the dappled moonlight of human nature.
You've expressed, just about perfectly, what I've been trying to articulate, without much success: it's easier (and lazier) to seem smart by expressing negativity, by criticizing, by tearing down. In order to explain why something's good, one pretty much has to know what one's talking about. This is acutely observable in the realms of arts criticism and science, but it's certainly also true regarding social issues, economics, and policy.