People care about the job market, the cost of living, direction effects of inflation on buying goods and services. When people say they economy sucks they mean they can't buy a car right now because the bank will only give them an ass interest rate even with great credit and the price of groceries has skyrocketed.
I've believed for awhile now the stock market has been a poor measure of the economy because its become decoupled from the "real" economy, ie: the things I listed above.
Maybe "All Economics are Local" too.
Obviously neither of those are true in a general sense - but the local situation is what feels most important.
With regards to grocery prices, what does corporate greed have to do with the president?
As for the car, the FED has a big hand in interest rates, and yeah, Biden did choose to re-nominate Powell, but Powell was originally appointed by Trump, so I don't know how voters can really say the republican would have done better.
The American economy is bad for people under a certain line, yes. The question is why does the media always overplay the economy when Republicans are in power and downplay it when Democrats are?
As one example the meat packing industry has become highly consolidated, squeezing both farmers and consumers while extracting massive profits. But across the entire economy many industries have become highly consolidated and subsequently raised their profit margins to the detriment of everyone but shareholders.
The media obviously wasn't talking about this when they were talking about how good the stock market was under Trump...
Most people aren't extracting the root causes to high prices. They watch the news, hear there is inflation and go to the store and see prices are high. Even if they had an inclination to, that kind of economic education is not standard. The population at large is very ignorant to how the economy works. They blame the prices on inflation and companies looking to gouge prices know this and take advantage of it.
But, corporate greed and monopolies have a lot to do with the president. At least Teddy Roosevelt thought it did. And he did something about it. It's not unreasonable to ask why Biden doesn't. There was a point, brief as it may have been where it at least seemed like our institutions cared more about how the economy effected the common man.
>The American economy is bad for people under a certain line, yes. The question is why does the media always overplay the economy when Republicans are in power and downplay it when Democrats are?
I should have made this more clear in my first post. But my core point is, public sentiment doesn't care about economic reports. It cares about tangible every day things like prices of goods and interest rates. It doesn't care nor understand the root causes. It blames the guy in charge. For better or worse POTUS is always to blame for the current state of the economy. It comes with the job. Instead of saying the public is stupid, I think its more productive to accept it and work out how best to deal with it.
And I don't think they downplay for republicans and exaggerate for democrats. The large media corps are selling a product and outrage helps. The kind of outrage the sells best depends on a lot of things. When trump was president, it was effective to just sell him as the outrage product. Biden is a much more dour and boring person. You have to focus on other things than the personality at the top. Before 9/11, Bush was getting attacked for the economy. He presided over the dot com bust. But with GWOT most criticism for him switched to that. The 2008 recession happened while Obama was in office and had long since left the news cycle by the time he left so duh.
The large majority of people are doing well. When people say the economy sucks they are largely not talking about their own economic situation. Most people believe that they, personally, are doing well, but that some nebulous "the economy" is doing badly. We have a nation of thriving people who believe everything is falling apart.
https://www.nytimes.com/2023/09/07/opinion/economy-inflation...
People don't think of inflation quarter to quarter or even FY to FY. They think of it in terms of what they are calibrated to think "normal" prices are. For most people that's going to be pre-pandemic. Since prices have not returned to pre-pandemic levels the economy is bad. Especially so since their wages haven't gone up comparably to match. This is why the numbers are largely useless at gauging public sentiment. Nobody cares that this quarter the rate of inflation has slowed. They care that chicken breasts cost double what it should. They care that a Ford Mustang GT can cost $50k when they were pretty sure they were $30k. They care that fast food costs as much as a sit down restaraunt should and the sit down costs as much as a nice one should.
Now you can all explain that with numbers and reports but sentiment doesn't care about that. Public opinion is an inherently irrational thing. But it is still incredibly important because elections are decided by it. It doesn't matter if GDP is positive and inflation is good right now if everyone thinks we are in a recession and the prices of everything are too damn high. You will get voted out. I'm not sure why this is a hard concept to grasp.
The economic data indicates that average income has gone up more than prices have since the start of the pandemic. If you look at Real Personal Income (https://fred.stlouisfed.org/series/RPI) it's up 5% relative to the end of 2019.
And if you think inflation is way higher than is being adjusted for, you're simply wrong. The MSRP for a 2023 Mustang GT is $38,345 (https://www.kbb.com/ford/mustang/2023/). The 2020 was $38,320 (https://www.kbb.com/ford/mustang/2020/). The price of Chicken Breast is up 38%, not 100% (https://fred.stlouisfed.org/series/APU0000FF1101).
Yes, public opinion is irrational, but the more obvious political question is why public opinion is so wrong now, when often it is not so pessimistic about the economy.
In 2020 I could get Mustang GT for $8k off MSRP. In 2023 Mustang GT MSRP is $42,495 and there is only $500 off.
To that I would say there is likely a problem with average. I didn't see a break down of the data in your link, but admittedly its my lunch break and I didn't have the time to really dig for it either. But its entirely possible that some groups saw an outsized growth in wages while others didn't.
>The MSRP for a 2023 Mustang GT is $38,345
The MSRP of a Mustang GT is $42k before options https://shop.ford.com/configure/mustang/model/customize/ecob... The GT Premium is $47k
You think the average income is being computed incorrectly? Or that there is just a lot of variance so many people are worse off? It is true that wage increases have been uneven, but they are actually much larger at the low end -- this is why you see the most inflation in low-wage service-heavy categories like restaurants.
Is it public opinion being irrational or governments around the world playing games with "basket of goods", "core" inflation and other bullshit designed to convince their citizens to trust magic math formulas instead of their own eyes?
It is a poor measure. The top seven or ten stonks levitating the SP500 should be a concern. I went to cash in early September and will re-evaluate at SP500 4000 or maybe 3500.
Good luck gaslighting the working class into believing their day to day situation is something it's not. "Don't believe your lying eyes. Your grocery bills and rent and gas and car and healthcare didn't go up, and you're closer to owning a house than before! It's the bad people telling you otherwise. Trust Us. Four Legs Good, Two Legs Bad."
I'm obviously only looking at a small part of the overall US, but if we're going to go by what we as individuals see the numbers I'm personally seeing largely match the trends I see from the BLS.
Feelings are more present and real. It's a mistake to expect that anyone will ignore their feelings. The question is how to get upstream of those feelings.
I had a big anger problem when I was a kid - my dad told me that if someone can make you angry, they control you. It's hard to tell someone they are being controlled while they are angry though.
Sometimes people are happy to be angry because it makes the world simpler. All I have to do is be angry, and this guy will fix things for me. And maybe that guy fixes things, or fixes one thing, but later things get worse again, because just being angry and trusting someone to fix things doesn't work.
Humans are very smart animals, but the world is very complicated.
A common and easily mocked media meme. On the New York Times Pitchbot humor account, an hour ago: "We're not in a recession. So why does it feel like we are?"
Debtors really don't care about the deficit. There's not a lot of places to park large quantities of cash. Even if the US Treasury was offering a measly 1% most bond buyers would still take that over any higher yielding riskier debt. It still confounds the typical US taxpayer that other countries buy our sovereign debt because that is how they insure their currency.
The numbers are meaningless, even if they are accurate, which I sincerely doubt. GDP is up 5%? My salary hasn't gone up 5%, but my grocery bill has gone up way more than 5%. Health insurance costs went up more than 5%. Maybe all those increases in prices are boosting GDP, but wages aren't keeping up. Maybe the numbers are hand-waving nonsense.
People know whether they are doing okay or not. GDP is a blunt instrument metric of little value except as a broad comparison. But noting that it "happens during a Democrat presidency" is quite telling.
If you're in the top 1-2% of income earners you feel things differently, this is understood.
So while your math is good, it's not meaningful. I find it very weird the lengths people will go to in trying to make one-off metrics reflect a different reality than what is very clear from people's experiences.
But job switchers (rightly) give themselves the credit for their salary boost. OTOH the government gets the blame for inflation and job loss. It's a crap job, you get blamed for the bad stuff, but don't get credit for the good stuff.
Suggesting that people job-hop is insane. Most workers cannot do this for a multitude of reasons, and most jobs are fungible. It's a very keyboard-warrior way to look at the economy, which is like getting advice on which car to buy from hedge fund managers.
Have you talked to low-wage workers? They switch jobs a lot. Long-term job stability is actually more of a corporate white-collar phenomenon.
In any event, others disagree with your chart: https://www.pewresearch.org/short-reads/2018/08/07/for-most-...
That's literally the point of adjusting for inflation. You can of course pick the fastest growing components of the CPI (housing is already a huge component) and complain that we're not outpacing the fastest growing component, but that's arbitrary.
> In any event, others disagree with your chart: https://www.pewresearch.org/short-reads/2018/08/07/for-most-...
That chart looks at wages rather than income, e.g. excluding healthcare contributions. You can argue that we shouldn't count healthcare because it's gotten way more expensive for no real increase in quality (which is true!). But healthcare is a huge and rapidly growing component of CPI which we are using to deflate wages -- you can't have your cake and eat it too by excluding healthcare payments from compensation but including it in your deflator.
Also that chart just seems to be wrong (they don't actually show the source or data). You can do the comparison yourself easily enough -- take the average hourly wages (https://fred.stlouisfed.org/series/CES0500000003) and use FRED's graph editor to compare to a deflator (e.g. CPI -- https://fred.stlouisfed.org/series/CPIAUCSL). This is up ~10% since 2008. It's not massive but it's not nothing -- and remember the caveat above that this is an underestimate.
And re: switching jobs for low-wage workers -- either they are getting big raises or getting big pay increases from switching jobs, or the BLS is massively wrong. Which is it?
The fact of the matter is the feelings of public are the feelings of the rich propagandists who, on principle, don’t want a leftist in power, regardless of whether he’s good for the economy or not.