So much ink has been spilled on the "disconnect" between the public mood (very bad based on polling) while on paper Americans are wealthier than ever.
The author's focus is the upper middle class because he's a wealth manager but the theory I've been mulling over in my head is something that is hitting everyone.
Customer surplus has been optimized away. Or put more simply: deals have disappeared.
Honest question for you - when is the last time you were just out and about, not really looking, and said to yourself "wow that's a good deal" from a find?
It happened to me once last year and it hit me like a lightning bolt that I used to feel that regularly and now it was a novel experience. Not even a decade ago companies priced things more aggressively and there was a sense of pride in making things broadly available. The customer was king and all that.
Post-covid though, instead of leaving some surplus on the table, including a bunch of extras, and trying to please as many people as possible, the relationship has completely flipped. Companies now proudly price things and engage in business practices that are design to extract as much as possible and turn people away. Customer service everywhere has gone down the tubes. Take it or leave it is now the default behavior of most companies.
It's a phenomenon related to inflation and enshittification but more anti-social which is why I think it hurts more.
Instead of approaching most business interactions with a baseline feeling of positivity I now have to actively defend myself from being taken advantage of everywhere. Even paying more to get a "premium" experience isn't a defense. No wonder everyone is miserable.
The jobs reports are bad, yes, but cutting interest rates is not gonna have any effect there. Companies are actively trimming their workforce or not hiring for macroeconomic/policy reasons like tariffs that have nothing to do with the FED. There simply isn't any meaningful connection between unemployment and rate cuts. No executive is sitting around waiting for a .25 rate cut to hire a bunch of employees when all the other economic data is flashing red.
Hell, even the FED themselves say this and point out correctly that lowering interest rates to "help" employment doesn't work especially in an elevated inflation environment.
"When discussing this trade-off, it is important to emphasize that, since the stagflation of 1970s, the consensus position among macroeconomists is that loose monetary policy can easily lead to high inflation without persistent gains in lowering unemployment rates. Therefore, a guiding principle of post-1980s monetary policy has been that it should not be used to try to achieve permanently higher employment."
https://www.richmondfed.org/publications/research/economic_b...
But of course, we have already passed through the authoritarian looking glass and the Trump regime doesn't even bother to lie badly about their justifications at this point. Trump wants lower interest rates therefore they should happen. Anything else is noise.
Customer surplus has been optimized away. Or put more simply: deals have disappeared.
Honest question for you - when is the last time you were just out and about, not really looking, and said to yourself "wow that's a good deal" from a find?
It happened to me once last year and it hit me like a lightning bolt that I used to feel that regularly and now it was a novel experience. Not even a decade ago companies priced things more aggressively and there was a sense of pride in making things broadly available. The customer was king and all that.
Post-covid though, instead of leaving some surplus on the table, including a bunch of extras, and trying to please as many people as possible, the relationship has completely flipped. Companies now proudly price things and engage in business practices that are design to extract as much as possible and turn people away. Customer service everywhere has gone down the tubes. Take it or leave it is now the default behavior of most companies.
It's a phenomenon related to inflation and enshittification but more anti-social which is why I think it hurts more. Instead of approaching most business interactions with a baseline feeling of positivity I now have to actively defend myself from being taken advantage of everywhere. Even paying more to get a "premium" experience isn't a defense. No wonder everyone is miserable.