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Why Are People So Down About the Economy? Theories Abound

26 points by washedup 2y ago

PaulHoule 2y ago
Free link for free people: https://archive.ph/tASmV 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/ 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.
JohnFen 2y ago
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.
tracker1 2y ago
Because groceries, gas, rent, insurance are way up in terms of costs. Even with some seeing higher pay, the increased prices more than offset that so people feel worse. For 8-10% of the population may be doing the same or better, the rest are worse. That doesn't count for nearly 20% of adults being maxed out on credit. Most of these changes are in the past 4-5 years or so.
- Saris 2y ago
  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.
- EricE 2y ago
  No kidding. The amount of gaslighting in this piece is excessive, even for the NYT.
- PaulHoule 2y ago
  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.
  - credit_guy 2y ago
    > 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.
    - PaulHoule 2y ago
      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.
throwaway22032 2y ago
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.
- jncfhnb 2y ago
  Things are, in fact, not 50-100% more expensive though.
  - TheCoelacanth 2y ago
    You can cherry-pick individual items that are, though, and the ones that have changed a lot get more attention.
  - EEMac 2y ago
    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
bequanna 2y ago
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.
- lotsofpulp 2y ago
  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.
  - bequanna 2y ago
    And that would be what, 20% of the population? Less? If you’re still dependent on a W2 income, you’re worse off.
    - lotsofpulp 2y ago
      https://www.census.gov/newsroom/press-releases/2021/homeownership.html 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?stream=top 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.
lurking15 2y ago
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.
- techdragon 2y ago
  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.

26 points by washedup 2y ago

Free link for free people: https://archive.ph/tASmV 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/ 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.

JohnFen 2y ago

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.

tracker1 2y ago

Because groceries, gas, rent, insurance are way up in terms of costs. Even with some seeing higher pay, the increased prices more than offset that so people feel worse. For 8-10% of the population may be doing the same or better, the rest are worse. That doesn't count for nearly 20% of adults being maxed out on credit. Most of these changes are in the past 4-5 years or so.

Saris 2y ago
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.
EricE 2y ago
No kidding. The amount of gaslighting in this piece is excessive, even for the NYT.
PaulHoule 2y ago
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.
- credit_guy 2y ago
  > 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.
  - PaulHoule 2y ago
    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.

throwaway22032 2y ago

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.

jncfhnb 2y ago
Things are, in fact, not 50-100% more expensive though.
- TheCoelacanth 2y ago
  You can cherry-pick individual items that are, though, and the ones that have changed a lot get more attention.
- EEMac 2y ago
  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

bequanna 2y ago

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.

lotsofpulp 2y ago
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.
- bequanna 2y ago
  And that would be what, 20% of the population? Less? If you’re still dependent on a W2 income, you’re worse off.
  - lotsofpulp 2y ago
    https://www.census.gov/newsroom/press-releases/2021/homeownership.html 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?stream=top 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.

lurking15 2y ago

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.

techdragon 2y ago
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.