Why Are People So Down About the Economy? Theories Abound(nytimes.com)
nytimes.com
Why Are People So Down About the Economy? Theories Abound
https://www.nytimes.com/2024/05/30/business/economy/inflation-economy-americans.html
30 comments
For me one of the most shocking events of the pandemic was going to McD's and seeing the price of a Big Mac meal was over $10 which was a psychologically important number for a product I've been buying since 1979 or so when I'd buy lunch on the way between the YCMA (Gym and Swim) and the public library every Saturday morning. It might be irrational but I got the strong feeling that "I can't afford that" and wound up buying something else.
If a politician could promise to roll back prices back to where they were I think that would please people but I think they would not like the results of deflation in that it will break people and businesses with debt which would not get deflated in dollar terms.
Even if prices went up 20% but wages often went up by 20% I think people are still going to remember the price of things going up and feel resentful about it.
If a politician could promise to roll back prices back to where they were I think that would please people but I think they would not like the results of deflation in that it will break people and businesses with debt which would not get deflated in dollar terms.
Even if prices went up 20% but wages often went up by 20% I think people are still going to remember the price of things going up and feel resentful about it.
> Even if prices went up 20% but wages often went up by 20% I think people are still going to remember the price of things going up and feel resentful about it
Absolutely.
Plus, not all prices go up the same amount and not all people get the same wage increase. If prices go up on average 20% and wages 20%, but with large variances, you have lots of people who experience their costs going up much more than their wage. For them, it's not selective memory, or subjective perception. They feel left behind because they are.
Absolutely.
Plus, not all prices go up the same amount and not all people get the same wage increase. If prices go up on average 20% and wages 20%, but with large variances, you have lots of people who experience their costs going up much more than their wage. For them, it's not selective memory, or subjective perception. They feel left behind because they are.
I think you’re right but there are multiple things going own.
COVID-19 was a crisis in the world economy. The war in Ukraine has had large economic effects, particularly for poor countries that import a lot of grain. If we don’t overhaul our energy system to control carbon emissions we are going to be spending even more on food and disaster recovery.
If there was a feeling of shared sacrifice it would be one thing but high levels of inequality and a lack of political responsiveness make it hard for people to accept.
The institution of debt is particularly problematic. Maybe GM will have to sell affordable cars which aren’t so profitable, maybe the workers would take a haircut too. Trouble is that both the employer and employee have debt that the holders of which never expect to get a haircut.
COVID-19 was a crisis in the world economy. The war in Ukraine has had large economic effects, particularly for poor countries that import a lot of grain. If we don’t overhaul our energy system to control carbon emissions we are going to be spending even more on food and disaster recovery.
If there was a feeling of shared sacrifice it would be one thing but high levels of inequality and a lack of political responsiveness make it hard for people to accept.
The institution of debt is particularly problematic. Maybe GM will have to sell affordable cars which aren’t so profitable, maybe the workers would take a haircut too. Trouble is that both the employer and employee have debt that the holders of which never expect to get a haircut.
For me it was McD's breakfast, which I always liked more than the rest of their menu anyway... When I can no longer get my usual for breakfast for under $10, it crossed that for me.
This is the conclusion my dad and I came to as well talking about this, part of the economy is doing really well, but the average person is not doing well.
No kidding. The amount of gaslighting in this piece is excessive, even for the NYT.
Free link for free people: https://archive.ph/tASmV
One thing it doesn't talk about is the emerging genre of YouTube video that attacks a business that fails at its brand promise. Disney, fast food restaurants (found out that Burger King changed the way they cook burgers in 2013 which explains why I though BK Burgers had gotten worse), airlines, video game publishers, etc. A lot of this negativity is deserved but there sure are a lot of it.
No mention that a lot of software developers on HN seem to be experiencing a recession which is probably complicated by this tax law change:
https://blog.pragmaticengineer.com/section-174/
I am also seeing a number of really promising startups like Upnext and Post.News going down. Investors just aren't interested in putting more in if they aren't getting Temu like results, but Temu only gets those results because it is willing to spend and spend.
Another issue is that it's emotional and has to do with whether or not you like your job, whether you find the things you do meaningful, etc. If there was some economic adversity but people felt purpose overcoming it it would be one thing, if it is just private equity buying viable businesses and making them not viable by seeking profits that aren't there, that's another thing.
There's also the relationship with China looming over everything for better and for worse.
One thing it doesn't talk about is the emerging genre of YouTube video that attacks a business that fails at its brand promise. Disney, fast food restaurants (found out that Burger King changed the way they cook burgers in 2013 which explains why I though BK Burgers had gotten worse), airlines, video game publishers, etc. A lot of this negativity is deserved but there sure are a lot of it.
No mention that a lot of software developers on HN seem to be experiencing a recession which is probably complicated by this tax law change:
https://blog.pragmaticengineer.com/section-174/
I am also seeing a number of really promising startups like Upnext and Post.News going down. Investors just aren't interested in putting more in if they aren't getting Temu like results, but Temu only gets those results because it is willing to spend and spend.
Another issue is that it's emotional and has to do with whether or not you like your job, whether you find the things you do meaningful, etc. If there was some economic adversity but people felt purpose overcoming it it would be one thing, if it is just private equity buying viable businesses and making them not viable by seeking profits that aren't there, that's another thing.
There's also the relationship with China looming over everything for better and for worse.
In the UK it's pretty much that pre and post covid are just different worlds economically.
It feels as if almost everything is 50-100% more expensive. Takeaways, cinema, restaurants, general labour (home repairs, materials, etc), the pub, etc.
I don't rent but people tell me that rent is skyrocketing also.
Government (local and national) seems to have different goals that make a lot of these issues worse.
For example, policies that get landlords to sell up, policies that make running a small business much more expensive and difficult.
It's usually all through side effects but it just fucks with the market.
My local council charges more for diesel vehicles to park. Makes sense right? Except ~100% of vans are diesel fuelled, so now if you want a tradesman to fix your gutter that costs a shit load more for essentially no reason.
There's also a clean air zone which means any older van has to pay £12.50 just to drive in at all. Not into Soho, into the entire 30 mile wide city. What's an older van you might ask? Nine years old. Yes, 9.
Literally an hour of wages gone, again for essentially no reason.
Is any of that in the inflation statistics? Probably not, it'll just show that people are either doing their own maintenance (less economically efficient) or leaving stuff to rot.
Policymakers are completely out of touch with the people who actually get shit done. Brexit is a nice scapegoat but in reality we just have ridiculously overbearing regulation.
It feels as if almost everything is 50-100% more expensive. Takeaways, cinema, restaurants, general labour (home repairs, materials, etc), the pub, etc.
I don't rent but people tell me that rent is skyrocketing also.
Government (local and national) seems to have different goals that make a lot of these issues worse.
For example, policies that get landlords to sell up, policies that make running a small business much more expensive and difficult.
It's usually all through side effects but it just fucks with the market.
My local council charges more for diesel vehicles to park. Makes sense right? Except ~100% of vans are diesel fuelled, so now if you want a tradesman to fix your gutter that costs a shit load more for essentially no reason.
There's also a clean air zone which means any older van has to pay £12.50 just to drive in at all. Not into Soho, into the entire 30 mile wide city. What's an older van you might ask? Nine years old. Yes, 9.
Literally an hour of wages gone, again for essentially no reason.
Is any of that in the inflation statistics? Probably not, it'll just show that people are either doing their own maintenance (less economically efficient) or leaving stuff to rot.
Policymakers are completely out of touch with the people who actually get shit done. Brexit is a nice scapegoat but in reality we just have ridiculously overbearing regulation.
Brexit undoubtedly raised costs for many business sectors in the UK though I'll grant other things are going on too.
Restaurants are in trouble everywhere.
Wage and ingredient costs are part of it but I think the delivery economy doesn't really work for them. Everywhere I go I see restaurants have made major accommodations to the delivery business. For instance in Collegetown there are several restaurants that have put up supergraphics covering multiple windows in mostly 中文 that are branded for a delivery service based in the mainland and have some exotic and interesting (to me) foods like when they cook a whole fish eyes and all it serve it to you whole. I'm not 100% sure what the relationship between these restaurants are, if I can order those items off the menu if I show up in person, how easy it is going to be be, etc.
For a while Uber was offering half-price taxi rides to people who lived in major cities but they can't afford to do that anymore and I think the same is happening with food delivery and of course it is too expensive but if it puts stress on restaurants in general it will make it expensive to sit down and eat or just to pick up the food yourself.
Restaurants are in trouble everywhere.
Wage and ingredient costs are part of it but I think the delivery economy doesn't really work for them. Everywhere I go I see restaurants have made major accommodations to the delivery business. For instance in Collegetown there are several restaurants that have put up supergraphics covering multiple windows in mostly 中文 that are branded for a delivery service based in the mainland and have some exotic and interesting (to me) foods like when they cook a whole fish eyes and all it serve it to you whole. I'm not 100% sure what the relationship between these restaurants are, if I can order those items off the menu if I show up in person, how easy it is going to be be, etc.
For a while Uber was offering half-price taxi rides to people who lived in major cities but they can't afford to do that anymore and I think the same is happening with food delivery and of course it is too expensive but if it puts stress on restaurants in general it will make it expensive to sit down and eat or just to pick up the food yourself.
Low restaurant/food prices have always been contingent on having a large population of people willing to work a very hard job for very low pay during times of the day when most people would rather not be working.
They were on the rise throughout the 2010s (due to changes in population pyramid due to fertility rate changes), albeit it at a slower pace before Covid, but Covid shook things up in the sense that it provided a lot of activation energy to those that wanted to get out of food service jobs, creating a more rapid shift in prices (and/or lower quality).
They were on the rise throughout the 2010s (due to changes in population pyramid due to fertility rate changes), albeit it at a slower pace before Covid, but Covid shook things up in the sense that it provided a lot of activation energy to those that wanted to get out of food service jobs, creating a more rapid shift in prices (and/or lower quality).
Things are, in fact, not 50-100% more expensive though.
I'm glad things are going better where you live. Where I live:
Gas: 2020 = $2.36 a gallon 2024 = $4.69 a gallon
Celery: 2020 $0.90/head 2024 $1.50/head
Arby's Half Pound Roast Beef Sandwich: 2020 $5.50 2024 $8
Gas: 2020 = $2.36 a gallon 2024 = $4.69 a gallon
Celery: 2020 $0.90/head 2024 $1.50/head
Arby's Half Pound Roast Beef Sandwich: 2020 $5.50 2024 $8
Gas is a special case but it’s worth noting that your numbers went from a bit above the national average to significantly above the national average.
I’m not sure where you got your celery numbers but produce prices are very swingy over a year
Arby’s prices have risen, although, amusingly at a much slower rate than almost any other major fast food chain
I’m not sure where you got your celery numbers but produce prices are very swingy over a year
Arby’s prices have risen, although, amusingly at a much slower rate than almost any other major fast food chain
>Gas: 2020 = $2.36 a gallon 2024 = $4.69 a gallon
This must be due to increased state and local taxes.
https://www.gasbuddy.com/charts
May 2019 is ~$2.70 and May 2024 is ~$3.70, a 37% increase, as opposed to a 100% increase for where you live.
I used May 2019 because there is no use in comparing May 2020 or any other part of 2020 due to COVID supply and demand disruption as well as seasonal differences.
This must be due to increased state and local taxes.
https://www.gasbuddy.com/charts
May 2019 is ~$2.70 and May 2024 is ~$3.70, a 37% increase, as opposed to a 100% increase for where you live.
I used May 2019 because there is no use in comparing May 2020 or any other part of 2020 due to COVID supply and demand disruption as well as seasonal differences.
> This must be due to increased state and local taxes
I don't know if it matters all that much why prices are increasing for everything, whether it's inflation, corporate greed, new/increased taxes, or whatever else
The fact is people are getting squeezed from a lot of directions, and meanwhile we're reading about record corporate profits, many companies are doing massive layoffs, and raises aren't keeping up with expenses
I don't know if it matters all that much why prices are increasing for everything, whether it's inflation, corporate greed, new/increased taxes, or whatever else
The fact is people are getting squeezed from a lot of directions, and meanwhile we're reading about record corporate profits, many companies are doing massive layoffs, and raises aren't keeping up with expenses
Picking one particular item hit by a tax in one locality is not a very useful anecdote for the general narrative
No, it just feels that way, because some things are actually up 40%, whilst other things are just less accessible in general or have been subjected to fees which can't be captured as a percentage rate.
The tradesman example I give is one of those. It's not x% more expensive to get something done, it's more like, the small jobs are now uneconomical to bother with at all, so you do it yourself to a lower standard which takes you time. Hence it feels as if the economy is doing worse, because you can't get as much done.
The tradesman example I give is one of those. It's not x% more expensive to get something done, it's more like, the small jobs are now uneconomical to bother with at all, so you do it yourself to a lower standard which takes you time. Hence it feels as if the economy is doing worse, because you can't get as much done.
You can cherry-pick individual items that are, though, and the ones that have changed a lot get more attention.
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Kind of sick of this liberal view, when they're generally so in favor of trusting an individual's intuition and "lived experience" but when it comes to economic "lived experience" it's completely ok to reject and outright mock it.
Just FYI… This is not a politically “liberal” point of view, “free market” economic liberalism is usually associated with more politically conservative policies (as the “free market” heavily favours the status quo social stratification based on who currently have money being the ones most likely to continue making more money when there aren’t laws that force them to do things that don’t just make the most money for them)
The segments of American politics that identify as “liberal” and align with the Democratic Party, who hold this view are the kind of politicians a lot of people complain loudly about having been corrupted by donors and lobbyists. It’s also important to remember how decades of social stigma have been welded onto anything that doesn’t sound enough like “good old American free market capitalism” as the first creeping tendrils of “evil communism” … to the point where the average American has little idea there’s any difference between “socialism” and “communism”… and would prefer their political representatives to not say anything that sounds like either of them… this perpetuates the need to make sure the economy is always good because there’s little alternative and voters don’t seem to turn out for candidates that make them feel bad and the whole system devolves into what you can see today.
The segments of American politics that identify as “liberal” and align with the Democratic Party, who hold this view are the kind of politicians a lot of people complain loudly about having been corrupted by donors and lobbyists. It’s also important to remember how decades of social stigma have been welded onto anything that doesn’t sound enough like “good old American free market capitalism” as the first creeping tendrils of “evil communism” … to the point where the average American has little idea there’s any difference between “socialism” and “communism”… and would prefer their political representatives to not say anything that sounds like either of them… this perpetuates the need to make sure the economy is always good because there’s little alternative and voters don’t seem to turn out for candidates that make them feel bad and the whole system devolves into what you can see today.
My hypothesis is that it's a bit of "referred pain". There is a pretty broad nervousness and pessimism about the state of the nation generally, and I suspect that influences how people feel about the economy.
Is this a serious question?
The relentless increases in insurance, property taxes, food, clothing, etc have destroyed the purchasing power of all but the wealthiest Americans. Almost everyone is significantly worse off than they were only a few short years ago.
The real question is: why is the media trying to gaslight the public into believing there is something wrong with you if you think the economy is bad.
The relentless increases in insurance, property taxes, food, clothing, etc have destroyed the purchasing power of all but the wealthiest Americans. Almost everyone is significantly worse off than they were only a few short years ago.
The real question is: why is the media trying to gaslight the public into believing there is something wrong with you if you think the economy is bad.
There is quite a large contingent of Americans who are better off. Those with equity investments and those who had already purchased their "final" home (or most expensive and next step is downgrading) are doing very well.
And that would be what, 20% of the population? Less?
If you’re still dependent on a W2 income, you’re worse off.
If you’re still dependent on a W2 income, you’re worse off.
https://www.census.gov/newsroom/press-releases/2021/homeowne...
>The homeownership rate in 2019 was 64.1%
Also, the SP500 is up 12% per year since Feb 2020.
I would estimate half of all voters (not half of the population) are better off (even if they don't feel like it), especially between Social Security cost of living adjustments.
Many W2 incomes also saw healthy gains, so while they might not be lockstep with increases of prices of goods and services, between equity in home and markets, nominal wage increases, and cost of living adjustments to fixed income, it is not all doom and gloom. At worst, many people should be in the same situation as before.
See page 3
https://www.cbo.gov/system/files/2024-05/60166-Inflation.pdf...
>In 2023, the average household in each income group could purchase the same bundle of goods and services that it purchased in 2019 with a smaller portion of its adjusted income after transfers and taxes because such income increased more than prices did from 2019 to 2023.
>For all households, adjusted market income also increased more than prices did; the average household in each income quintile could spend a smaller portion of its market income in 2023 than it did in 2019 to purchase the same consumption bundle.
>The homeownership rate in 2019 was 64.1%
Also, the SP500 is up 12% per year since Feb 2020.
I would estimate half of all voters (not half of the population) are better off (even if they don't feel like it), especially between Social Security cost of living adjustments.
Many W2 incomes also saw healthy gains, so while they might not be lockstep with increases of prices of goods and services, between equity in home and markets, nominal wage increases, and cost of living adjustments to fixed income, it is not all doom and gloom. At worst, many people should be in the same situation as before.
See page 3
https://www.cbo.gov/system/files/2024-05/60166-Inflation.pdf...
>In 2023, the average household in each income group could purchase the same bundle of goods and services that it purchased in 2019 with a smaller portion of its adjusted income after transfers and taxes because such income increased more than prices did from 2019 to 2023.
>For all households, adjusted market income also increased more than prices did; the average household in each income quintile could spend a smaller portion of its market income in 2023 than it did in 2019 to purchase the same consumption bundle.
I’d argue that home equity doesn’t really matter all that much. If you want to sell, you need to buy another home at inflated prices AND an higher interest rate. How are you better off?
Inflated 401ks are a cherry on top for the Boomer vampire squid generation, but the overwhelming majority of people have lost real purchasing power and are undeniably worse off.
Also, do we really buy any inflation or other numbers given by these Federal Agencies? It seems to me they have become highly political and now only serve to push a narrative.
Inflated 401ks are a cherry on top for the Boomer vampire squid generation, but the overwhelming majority of people have lost real purchasing power and are undeniably worse off.
Also, do we really buy any inflation or other numbers given by these Federal Agencies? It seems to me they have become highly political and now only serve to push a narrative.
Not only is CPI very suspect (iPads got faster so we can ignore that pesky food inflation), the postive economic numbers pointed to are now frequently adjusted downward[0] after the fanfare settles.
[0]https://www.dailysignal.com/2024/05/30/us-economic-growth-in...
[0]https://www.dailysignal.com/2024/05/30/us-economic-growth-in...
Reminder, too: an estimation above was based on voters.
The United States (assumed, quoting census.gov) doesn't have compulsory voting. We have a lot of ballot opportunities. "Voters" is vague at best.
Points being: participation often ends up abysmal. I mention this because it's also suspect/misleading - intentional or not. Posting down here to not appear as a criticism. I'm lacking facts too.
Counter-intuitively... voters as a category lose each of our elections to non-voters; outnumbered like 2:1. A majority of a minority is doing better - yay!
I should verify this, but I'm here rambling instead. Someone may check/correct me :)
Trick is, the non-voters implicitly cast no vote. They're probably in substantial numbers, doing the same or worse, and yet don't "count" in this hypothetical.
I need to make sense of the rest of the claims, but I know this: I was making $160k. It stopped feeling like the lucrative amount it was.
I had to get a significant raise to be comfortable with no new costs - only the same, expanded. I didn't choose for everything to cost more.
The United States (assumed, quoting census.gov) doesn't have compulsory voting. We have a lot of ballot opportunities. "Voters" is vague at best.
Points being: participation often ends up abysmal. I mention this because it's also suspect/misleading - intentional or not. Posting down here to not appear as a criticism. I'm lacking facts too.
Counter-intuitively... voters as a category lose each of our elections to non-voters; outnumbered like 2:1. A majority of a minority is doing better - yay!
I should verify this, but I'm here rambling instead. Someone may check/correct me :)
Trick is, the non-voters implicitly cast no vote. They're probably in substantial numbers, doing the same or worse, and yet don't "count" in this hypothetical.
I need to make sense of the rest of the claims, but I know this: I was making $160k. It stopped feeling like the lucrative amount it was.
I had to get a significant raise to be comfortable with no new costs - only the same, expanded. I didn't choose for everything to cost more.
Most of these changes are in the past 4-5 years or so.