It seems to me that the issue can be boiled down to the fact that prices rose extremely quickly in 2021-22, and the fact that their current pace of increase is slower has done nothing to help people forget that not that long ago, things were cheaper. people still remember that the package of Charmin that used to cost $5.99 now costs $9.99. the fact that it has not gone quickly to $10.99 does not make it seem cheap.
what economists and pundits call inflation is the pace of the change in prices. what people on the street call inflation is the price level. the reason that 37% of those surveyed would be happy with a recession is because the price level is THE statistic that matters.
and arguably, unless productivity grows dramatically across every sector of the economy, a highly unlikely outcome, as long as people can clearly remember when prices were lower and it wasn't that long ago (not your grandfather's stories, but your lived experience), people are not going to be happy
Complexity of humans + Complexity of economics + infinite information available through a pixellated device in our hand = Extreme Vibecession likelihood
Maybe the reason for the bad vibes is a bleeding over from issues like all cause mortality, which in addition to infant mortality are way up. Suicide is much more common. Mental health among youths is truly bad. Traffic and firearm fatalities are up. It's hard to get excited about the economy and your job when some practical survival outcomes are worse than a decade ago. In my circle, I know more people who died from despair (suicide or drugs) than I do that died from Covid.
Economics has a limited view into lived reality. It's a borderline stupid thing for me to say, but money isn't everything. I made this point on Noahopinion's blog on a recent post that went, more or less, "why aren't people happy about the economy when the economy is roaring?" Because while money touches everything, money is a shadow on the cave wall, and data about money is a shadow twice removed.
It’s comes down big ticket items that everyone has to have, housing, transportation, medical care these are core issues for most Americans. The items that people must have to live are out of reach now. We have no choices anymore. We must work at what ever job pays the most, we must work as much as possible, we can’t get sick because we can’t afford to. This is creating a pressure cooker for most people that will result in an extremely dangerous political situation shortly. For most retired people on social security they feel especially cheated since many are to old or to sick to make any money and it’s lost a third of it purchasing power since 2020. My 84 year old mother in law gets $643 a month to live on, the minimum needs to apparently be about $1000 a week now.
I think a huge part of it is that most people just aren't checking their bank accounts compulsively. They may get a raise that's in line with inflation and have just as much money as they did before but they go grocery shopping and are spending money more than ever before and wow these oranges and chips and frozen peas are expensive. It's like when you go to buy a car with your grandpa and he can't get over that a used car isn't $500 and leaves the transaction feeling ripped off, even if he got a good deal. You could be better off in absolute or relative terms but fundamentally everyone hates spending money and right now you have to spend more than ever before, just to live on rent, groceries etc. Prospect theory goes on and on about how people hate to lose what they have more than they like to get something of equivalent value, I think this is just an economy wide example of that.
Good piece. But it doesn’t touch on the number one issue: the 2024 presidential election. The only reason anyone cares how people think about the economy is because economics is the leading factor in presidential elections. And this upcoming one looks like an existential one.
So you have one side and their massive media machine saying things are bad (vote Trump!). Then you have the massive mainstream media saying things aren’t great (Trump drives clicks!). Then you have the small sliver of leftish media and activists saying, we’ve done better in the post-COVID economy than any country on Earth! (Vote Bide, please, for the sake of the country!)
Not sure what to say when Americans are so wrong about everything in the economy. And you read some woman in the Washington Post say “and gas prices are just sky high!” And you look up where she lives in GasBuddy and a gallon costs like $2.89, like 2017 levels. We’re doomed.
The comment about people being upset that they are having to pay more to workers who were previously underpaid raises a new question.
I am going to assume the upset “wealthy” vocal people are the middle class who feel that the system around them is breaking and the expectations set for them as they grew up are gone now. Would the middle class be less upset if the true wealthy class, multi million income and up were finally paying more of their fair share? If we could reinvest overdue taxes from the top 5% into our social and physical infrastructure would that pinch of higher prices be negated?
Our political system is utterly broken. There is no clear way to fix it and it will plausibly get much worse before (if?) it gets better. That makes it hard to have hope for the future. That feels bad. Thats what people are trying to say.
The correlation between people who hate politics (no different from companies with high leverage like the hands of a clock moving on an app every second) and expect it to behave as a magic wand at the same time when evidence has proved the contrary is quite astounding. That being said, if I was punched on the face for attempting to kiss you, it would still be a worthwhile act of good intent atleast from my perception.
I think 2 things play a major part of this. 1 is a lack of leadership in politics, political institutions and media. The narrative and story is more important than the data, and a good leader can create powerful connection and narrative
And the dynamic that wages up prices flat = good, wages flat prices up = bad, and wages up prices up = fucking annoying (as opposed to neutral)
Look at the stats you posted. One graph shows hourly wage growth of 14%. The next chart show wage growth of 2.8% ($28.29 to $29.10). That's a HUGE difference. I'm sure it has to do with sampling and such, but this is the rub.
Having spent some years doing practical statistics that was reported as US govt. data, I can confirm that 1) it's hard do well 2) it's not that hard to make whatever point you want to make by choosing your data selectively and doing a favorable analysis.
It seems to me that the issue can be boiled down to the fact that prices rose extremely quickly in 2021-22, and the fact that their current pace of increase is slower has done nothing to help people forget that not that long ago, things were cheaper. people still remember that the package of Charmin that used to cost $5.99 now costs $9.99. the fact that it has not gone quickly to $10.99 does not make it seem cheap.
what economists and pundits call inflation is the pace of the change in prices. what people on the street call inflation is the price level. the reason that 37% of those surveyed would be happy with a recession is because the price level is THE statistic that matters.
and arguably, unless productivity grows dramatically across every sector of the economy, a highly unlikely outcome, as long as people can clearly remember when prices were lower and it wasn't that long ago (not your grandfather's stories, but your lived experience), people are not going to be happy
Complexity of humans + Complexity of economics + infinite information available through a pixellated device in our hand = Extreme Vibecession likelihood
Maybe the reason for the bad vibes is a bleeding over from issues like all cause mortality, which in addition to infant mortality are way up. Suicide is much more common. Mental health among youths is truly bad. Traffic and firearm fatalities are up. It's hard to get excited about the economy and your job when some practical survival outcomes are worse than a decade ago. In my circle, I know more people who died from despair (suicide or drugs) than I do that died from Covid.
Economics has a limited view into lived reality. It's a borderline stupid thing for me to say, but money isn't everything. I made this point on Noahopinion's blog on a recent post that went, more or less, "why aren't people happy about the economy when the economy is roaring?" Because while money touches everything, money is a shadow on the cave wall, and data about money is a shadow twice removed.
It’s comes down big ticket items that everyone has to have, housing, transportation, medical care these are core issues for most Americans. The items that people must have to live are out of reach now. We have no choices anymore. We must work at what ever job pays the most, we must work as much as possible, we can’t get sick because we can’t afford to. This is creating a pressure cooker for most people that will result in an extremely dangerous political situation shortly. For most retired people on social security they feel especially cheated since many are to old or to sick to make any money and it’s lost a third of it purchasing power since 2020. My 84 year old mother in law gets $643 a month to live on, the minimum needs to apparently be about $1000 a week now.
I think a huge part of it is that most people just aren't checking their bank accounts compulsively. They may get a raise that's in line with inflation and have just as much money as they did before but they go grocery shopping and are spending money more than ever before and wow these oranges and chips and frozen peas are expensive. It's like when you go to buy a car with your grandpa and he can't get over that a used car isn't $500 and leaves the transaction feeling ripped off, even if he got a good deal. You could be better off in absolute or relative terms but fundamentally everyone hates spending money and right now you have to spend more than ever before, just to live on rent, groceries etc. Prospect theory goes on and on about how people hate to lose what they have more than they like to get something of equivalent value, I think this is just an economy wide example of that.
Good piece. But it doesn’t touch on the number one issue: the 2024 presidential election. The only reason anyone cares how people think about the economy is because economics is the leading factor in presidential elections. And this upcoming one looks like an existential one.
So you have one side and their massive media machine saying things are bad (vote Trump!). Then you have the massive mainstream media saying things aren’t great (Trump drives clicks!). Then you have the small sliver of leftish media and activists saying, we’ve done better in the post-COVID economy than any country on Earth! (Vote Bide, please, for the sake of the country!)
Not sure what to say when Americans are so wrong about everything in the economy. And you read some woman in the Washington Post say “and gas prices are just sky high!” And you look up where she lives in GasBuddy and a gallon costs like $2.89, like 2017 levels. We’re doomed.
The vibes are still off!
The comment about people being upset that they are having to pay more to workers who were previously underpaid raises a new question.
I am going to assume the upset “wealthy” vocal people are the middle class who feel that the system around them is breaking and the expectations set for them as they grew up are gone now. Would the middle class be less upset if the true wealthy class, multi million income and up were finally paying more of their fair share? If we could reinvest overdue taxes from the top 5% into our social and physical infrastructure would that pinch of higher prices be negated?
Our political system is utterly broken. There is no clear way to fix it and it will plausibly get much worse before (if?) it gets better. That makes it hard to have hope for the future. That feels bad. Thats what people are trying to say.
a poem for yas
https://www.poemist.com/mario-de-andrade/the-valuable-time-of-maturity
Enjoyed it Kyla!
The correlation between people who hate politics (no different from companies with high leverage like the hands of a clock moving on an app every second) and expect it to behave as a magic wand at the same time when evidence has proved the contrary is quite astounding. That being said, if I was punched on the face for attempting to kiss you, it would still be a worthwhile act of good intent atleast from my perception.
I think 2 things play a major part of this. 1 is a lack of leadership in politics, political institutions and media. The narrative and story is more important than the data, and a good leader can create powerful connection and narrative
And the dynamic that wages up prices flat = good, wages flat prices up = bad, and wages up prices up = fucking annoying (as opposed to neutral)
Look at the stats you posted. One graph shows hourly wage growth of 14%. The next chart show wage growth of 2.8% ($28.29 to $29.10). That's a HUGE difference. I'm sure it has to do with sampling and such, but this is the rub.
Having spent some years doing practical statistics that was reported as US govt. data, I can confirm that 1) it's hard do well 2) it's not that hard to make whatever point you want to make by choosing your data selectively and doing a favorable analysis.