4 ms·

This is more about economic news specifically (well, it is an NBER paper being reported in the FT after all) but is quite interesting. Things are getting bette

by gumby 3y ago

This is more about economic news specifically (well, it is an NBER paper being reported in the FT after all) but is quite interesting. Things are getting better yet sentiment is falling. Does that mean things aren’t getting better or does it mean expectations are rising? Only the second of those two is brought up in this brief article.

iammjm 3y ago
I think it's in our nature that we are never satisfied with what we have and once we have fulfilled our latest desire we just directly move onto the next one. Being constantly bombarded with other people's carefully crafted illusions of perfect lives on social media probably makes this tendency even worse - we are even more acutely aware of what life could be (at least in theory) & what we are potentially missing. Plus, the negative & outrageous is what generates the clicks, so these kinds of signals get amplified and create a yet another illusion dressed as reality
- jononomo 3y ago
  If it is in human nature to never be satisfied, then why were Americans more satisfied a few decades ago?
  - antisthenes 3y ago
    The GP post already explained it - rising expectations are one of the causes of falling satisfactions. If I expect $500 and get $600, I am satisfied, but if I am expecting $1000 and get $900, I am not, despite objectively being better off.
  - kube-system 3y ago
    Maybe the tone used by journalists in newspapers isn’t equally representative of the satisfaction of all Americans.
mikeravkine 3y ago
In terms of economics specifically, in what way have things "gotten better"? Purchasing power has collapsed, the poor sentiment here seems the correct sentiment to me.
- galimaufry 3y ago
  > Purchasing power has collapsed But is this actually true, or just something that declining economic sentiment in the newspapers has led us to believe? People are consuming more food, more education, more square feet of house, more travel. My sense is that is surprisingly hard to find a quantitative signal that purchasing power has collapsed. Maybe it is just that positional goods (access to the best neighborhood in the best city) get harder to obtain as the population grows?
  - giantg2 3y ago
    I mean, real wages have stagnated or declined over the past 50 years. Sure, we're eating more food, but it's increasingly garbage. Yes, we have more education, but the quality has gone down and is really only a response to the barriers to entry that have increased for most professions. It does seem travel has increased and new houses are bigger, but these seemed to be aligned to a particular class of person. I doubt the middle class is doing much of that. Perhaps the increase in income in equality is reflected by a larger upper class skewing those metrics. https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/
    - eru 3y ago
      The labour share of GDP has held more or less constant over the last 70 years. It bounced between 60 - 65%. See eg https://fred.stlouisfed.org/series/LABSHPUSA156NRUG https://fred.stlouisfed.org/series/LABSHPUSA156NRUG If you want to argue that real wages have stagnated, you need to argue that real GDP has stagnated. > Yes, we have more education, but the quality has gone down and is really only a response to the barriers to entry that have increased for most professions. Yes, that is a problem. See 'The Case against Education' by Bryan Caplan. > I doubt the middle class is doing much of that. What's your definition of the middle class in this context? Have you checked any statistics? > Perhaps the increase in income in equality is reflected by a larger upper class skewing those metrics. The first few decades after the second world war were really rough. But fortunately, global equality has massively improved in the last few decades. Numerically, that's mostly due to China (but also India and recently Africa) first falling behind and then starting to catch up. There was probably never a time since at least the Industrial Revolution when global consumption was as equal as today, and the situation is set to keep improving.
tqi 3y ago
Their chart actually seems to show both economic and non-economic sentiment trending down at the same time.
concordDance 3y ago
> Things are getting better Doesn't that depend on what you look at? E.g. if you look at gdp then things are getting better but if you look at growth rate then things are getting worse?
- eru 3y ago
  Absolute growth isn't too bad, ie how many more inflation adjusted dollars do you get to spend your after year. (If you look at growth as the ratio between years, instead of as a difference, then yes, growth has slowed down.)
thunderbird120 3y ago
News organizations are businesses and bad news sells. People are evolutionarily wired to pay more attention to bad news because bad news is theoretically useful for trying to avoid or mitigate threats. Problems is, once you have a limitless firehose of news from all over the world 24/7 what you end up with is essentially a limitless supply of bad news which inundates people constantly. This causes issues, since any mild gradual improvements to the world get drowned out. The amount of actual yearly improvement needed to give the impression that things are improving ends up being dramatically more than the small incremental improvements which are normally seen.
- gumby 3y ago
  > News organizations are businesses and bad news sells. The paper discusses this and the ft article quotes it: > particularly if one adheres to the view that traditional media fulfills a watchdog/surveillance function. Although this argument could explain the average level of negativity in news reporting, it does not address its increasingly downward trend. … Fighting the media negativity bias, the local Russian newspaper City Reporter decided in 2014 to report only positive news for a day and lost two-thirds of its readers.
giantg2 3y ago
"Things are getting better yet sentiment is falling." Have they? By what measures? Real wages have stagnated or fallen. Workforce participation is at a low. We can't compete on costs with much of the world. Population is mostly stagnate. It's hard to see how a system built on consumerism is not in trouble when our products must be subsidized to compete on exports (ag), the population is mostly stagnate, and a large portion of the population is either not working or is making just enough to survive. Looks pretty bleak to me. I suppose it looks better if you wrap assets in multiple layers of derivatives.
- yorwba 3y ago
  Since you don't specify which country you're talking about, I assume you're in the US. In which case labor force participation is at a high https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060
  - galleywest200 3y ago
    Labor force participation being high does not mean people are making enough money to be comfortable.
    - eru 3y ago
      The parent comment talked specifically about workforce participation being low.
  - MisterBastahrd 3y ago
    The average person is working. The average person has always been working. The cost of living has risen faster than wages, which have have stagnated except for those who are either in the C-suite or making their money primarily through capital. My father made half of what I make at the same age. But his mortgage was 1/8th of the size of mine for the same basic home.
  - giantg2 3y ago
    That's interesting. I wonder what the difference is, because the BLS shoes something very different. https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm https://www.bls.gov/charts/employment-situation/civilian-lab...
boplicity 3y ago
It's not for sure, but there seems to be significant evidence that partisan bias is affecting economic sentiment more than the reality of jobs/prices/etc. > https://www.nytimes.com/2024/01/09/opinion/economy-survey-republicans.html?unlocked_article_code=1.Mk0.R8Iu.UySU3SzcdsNY&smid=url-share https://www.nytimes.com/2024/01/09/opinion/economy-survey-re...
colinsane 3y ago
> Things are getting better yet sentiment is falling. Does that mean things aren’t getting better or does it mean expectations are rising? i'm not sure the two can actually be decoupled. why do people work? as a means to fulfill their needs and desires. how do you measure if a person's needs and desires are being fulfilled? you can try to ground economic measurements in something like Maslow's hierarchy, but you can't escape that a person's sentiment is real. give a person shelter, but in such a way that they feel it could be taken away from them at any moment (e.g. "living paycheck-to-paycheck"), and you've only sort of fulfilled their base needs. give a person the exact same shelter but in such a way that they feel secure in it, and it's hard to argue that's not meaningfully better. so whatever macro measurements you're using, if your goal is for them to reflect anything real to the individual, they ought to have some correlation to sentiment. "household savings" and "job openings" often do proxy the difference between being secure v.s. insecure in your housing. but, speaking to the article, worries you'll see captured and reinforced by the news such as "the other half of the country wants to take away my healthcare" or "the other half of the country wants to obsolete my coal/oil/manufacturing job" proxy these same feelings of in/security, but are likely not captured by any formal measurement... except "sentiment". so if these sentiments aren't proxied by your "things are getting better" measurement, then yes, it would mean that things aren't getting as better as your measurement claims.

by gumby 3y ago

iammjm 3y ago

I think it's in our nature that we are never satisfied with what we have and once we have fulfilled our latest desire we just directly move onto the next one. Being constantly bombarded with other people's carefully crafted illusions of perfect lives on social media probably makes this tendency even worse - we are even more acutely aware of what life could be (at least in theory) & what we are potentially missing. Plus, the negative & outrageous is what generates the clicks, so these kinds of signals get amplified and create a yet another illusion dressed as reality

jononomo 3y ago
If it is in human nature to never be satisfied, then why were Americans more satisfied a few decades ago?
- antisthenes 3y ago
  The GP post already explained it - rising expectations are one of the causes of falling satisfactions. If I expect $500 and get $600, I am satisfied, but if I am expecting $1000 and get $900, I am not, despite objectively being better off.
- kube-system 3y ago
  Maybe the tone used by journalists in newspapers isn’t equally representative of the satisfaction of all Americans.

mikeravkine 3y ago

In terms of economics specifically, in what way have things "gotten better"? Purchasing power has collapsed, the poor sentiment here seems the correct sentiment to me.

galimaufry 3y ago
> Purchasing power has collapsed But is this actually true, or just something that declining economic sentiment in the newspapers has led us to believe? People are consuming more food, more education, more square feet of house, more travel. My sense is that is surprisingly hard to find a quantitative signal that purchasing power has collapsed. Maybe it is just that positional goods (access to the best neighborhood in the best city) get harder to obtain as the population grows?
- giantg2 3y ago
  I mean, real wages have stagnated or declined over the past 50 years. Sure, we're eating more food, but it's increasingly garbage. Yes, we have more education, but the quality has gone down and is really only a response to the barriers to entry that have increased for most professions. It does seem travel has increased and new houses are bigger, but these seemed to be aligned to a particular class of person. I doubt the middle class is doing much of that. Perhaps the increase in income in equality is reflected by a larger upper class skewing those metrics. https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/
  - eru 3y ago
    The labour share of GDP has held more or less constant over the last 70 years. It bounced between 60 - 65%. See eg https://fred.stlouisfed.org/series/LABSHPUSA156NRUG https://fred.stlouisfed.org/series/LABSHPUSA156NRUG If you want to argue that real wages have stagnated, you need to argue that real GDP has stagnated. > Yes, we have more education, but the quality has gone down and is really only a response to the barriers to entry that have increased for most professions. Yes, that is a problem. See 'The Case against Education' by Bryan Caplan. > I doubt the middle class is doing much of that. What's your definition of the middle class in this context? Have you checked any statistics? > Perhaps the increase in income in equality is reflected by a larger upper class skewing those metrics. The first few decades after the second world war were really rough. But fortunately, global equality has massively improved in the last few decades. Numerically, that's mostly due to China (but also India and recently Africa) first falling behind and then starting to catch up. There was probably never a time since at least the Industrial Revolution when global consumption was as equal as today, and the situation is set to keep improving.

tqi 3y ago

Their chart actually seems to show both economic and non-economic sentiment trending down at the same time.

concordDance 3y ago

> Things are getting better Doesn't that depend on what you look at? E.g. if you look at gdp then things are getting better but if you look at growth rate then things are getting worse?

eru 3y ago
Absolute growth isn't too bad, ie how many more inflation adjusted dollars do you get to spend your after year. (If you look at growth as the ratio between years, instead of as a difference, then yes, growth has slowed down.)

thunderbird120 3y ago

News organizations are businesses and bad news sells. People are evolutionarily wired to pay more attention to bad news because bad news is theoretically useful for trying to avoid or mitigate threats. Problems is, once you have a limitless firehose of news from all over the world 24/7 what you end up with is essentially a limitless supply of bad news which inundates people constantly. This causes issues, since any mild gradual improvements to the world get drowned out. The amount of actual yearly improvement needed to give the impression that things are improving ends up being dramatically more than the small incremental improvements which are normally seen.

gumby 3y ago
> News organizations are businesses and bad news sells. The paper discusses this and the ft article quotes it: > particularly if one adheres to the view that traditional media fulfills a watchdog/surveillance function. Although this argument could explain the average level of negativity in news reporting, it does not address its increasingly downward trend. … Fighting the media negativity bias, the local Russian newspaper City Reporter decided in 2014 to report only positive news for a day and lost two-thirds of its readers.

giantg2 3y ago

"Things are getting better yet sentiment is falling." Have they? By what measures? Real wages have stagnated or fallen. Workforce participation is at a low. We can't compete on costs with much of the world. Population is mostly stagnate. It's hard to see how a system built on consumerism is not in trouble when our products must be subsidized to compete on exports (ag), the population is mostly stagnate, and a large portion of the population is either not working or is making just enough to survive. Looks pretty bleak to me. I suppose it looks better if you wrap assets in multiple layers of derivatives.

yorwba 3y ago
Since you don't specify which country you're talking about, I assume you're in the US. In which case labor force participation is at a high https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060
- galleywest200 3y ago
  Labor force participation being high does not mean people are making enough money to be comfortable.
  - eru 3y ago
    The parent comment talked specifically about workforce participation being low.
- MisterBastahrd 3y ago
  The average person is working. The average person has always been working. The cost of living has risen faster than wages, which have have stagnated except for those who are either in the C-suite or making their money primarily through capital. My father made half of what I make at the same age. But his mortgage was 1/8th of the size of mine for the same basic home.
- giantg2 3y ago
  That's interesting. I wonder what the difference is, because the BLS shoes something very different. https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm https://www.bls.gov/charts/employment-situation/civilian-lab...

boplicity 3y ago

It's not for sure, but there seems to be significant evidence that partisan bias is affecting economic sentiment more than the reality of jobs/prices/etc. > https://www.nytimes.com/2024/01/09/opinion/economy-survey-republicans.html?unlocked_article_code=1.Mk0.R8Iu.UySU3SzcdsNY&smid=url-share https://www.nytimes.com/2024/01/09/opinion/economy-survey-re...

colinsane 3y ago

> Things are getting better yet sentiment is falling. Does that mean things aren’t getting better or does it mean expectations are rising? i'm not sure the two can actually be decoupled. why do people work? as a means to fulfill their needs and desires. how do you measure if a person's needs and desires are being fulfilled? you can try to ground economic measurements in something like Maslow's hierarchy, but you can't escape that a person's sentiment is real. give a person shelter, but in such a way that they feel it could be taken away from them at any moment (e.g. "living paycheck-to-paycheck"), and you've only sort of fulfilled their base needs. give a person the exact same shelter but in such a way that they feel secure in it, and it's hard to argue that's not meaningfully better. so whatever macro measurements you're using, if your goal is for them to reflect anything real to the individual, they ought to have some correlation to sentiment. "household savings" and "job openings" often do proxy the difference between being secure v.s. insecure in your housing. but, speaking to the article, worries you'll see captured and reinforced by the news such as "the other half of the country wants to take away my healthcare" or "the other half of the country wants to obsolete my coal/oil/manufacturing job" proxy these same feelings of in/security, but are likely not captured by any formal measurement... except "sentiment". so if these sentiments aren't proxied by your "things are getting better" measurement, then yes, it would mean that things aren't getting as better as your measurement claims.