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I very much agree with the premise that economists unduly focus on a few metrics of dubious quality - labor force participation, personal consumption expenditur

I very much agree with the premise that economists unduly focus on a few metrics of dubious quality - labor force participation, personal consumption expenditures, market capitalization, wage growth, etc - and overfit them to construct a coherent narrative about the "strength" of the economy and what the experience of living in that economy must be like. There's a story right now being peddled by all the talking heads that the economy is "great", but consumers keep reporting feeling terrible, so consumers must not understand something. I think this goes the other way around. Our method for understanding the economy is flawed and is not properly capturing what all consumers know intuitively, things kind of suck, even when you have a job and even when you're still buying things. We need to start thinking about what information needs to be captured and how it needs to be reported to start making better sense of what's broken and how to fix it.

jprete 2y ago
They're addicted to metrics instead of observation. Anything that isn't easily measured is considered to not exist, including how people feel about it. Now that I think about it, that's literal selection pressure for psychopathy.
silverquiet 2y ago
I agree with much of this and I'll add one of my biggest stressors - opaque pricing. One of the biggest "innovations" in the US in the last decade or so seems to be to add as many hidden fees as possible to every service imaginable. Obviously it's hardly a new idea; I'm sure that human nature being what it is, they had to deal with it in Mesopotamia. But it makes budgeting very difficult; I suppose it's like living in a corrupt country; you just have to add an overhead for bribes as part of day-to-day living. Perhaps it isn't "like" living in a corrupt country; perhaps it just is living in a corrupt country.
- phkahler 2y ago
  >> I'll add one of my biggest stressors - opaque pricing. Economic "models" make assumptions like markets being efficient. Meanwhile in the business classes next door they teach how to avoid competition because it's a race to the bottom. They all learn the prisoners dilemma as an example because it's how you need to think to avoid overt collusion. I'd like an economic model as powerful as the laws of thermodynamics, where everything is included if not explicitly. But I haven't seen one.
  - JumpCrisscross 2y ago
    > Economic "models" make assumptions like markets being efficient No? You’re thinking of a specific class of models. Generally speaking, prescriptive economics is about characterising what an efficient market would look like and then identifying why reality is not that. (And whether that deviance is good or bad.) This article could be seen doing that. It seems like domains should be closed to $2, given an efficient market. But they’re nine going on twelve.
    - pydry 2y ago
      Most of the assumptions made in economic models conceal sources of profit. They dont appear to be there to simplify complexity because they simulate situations that have never and will never be approximated (never been perfect competition or information, never will be). It's unlike, say, physics in this respect.
      - JumpCrisscross 2y ago
        > Most of the assumptions made in economic models conceal sources of profit This is wildly inaccurate. A huge amount of economics is focussed on profit. For obvious reasons. > never been perfect competition or information, never will be Frictionless surfaces are mostly a fiction, too. That doesn’t mean calculating the expected outcome in a frictionless condition is useless. If the deviance is more than you’d expect from friction, that’s informative. Unlike physics, a lot of people think their undergrad 101 course plus skimming the Economist an economist themselves makes. It’s a common hubris, albeit one unusually common in tech. (Disclaimer: I’m not an economist. But I know the boundaries of my circle of competence in this.)
        pydry 2y ago
        >This is wildly inaccurate. A huge amount of economics is focussed on profit. For obvious reasons. As an example there are countless studies looking at the relationship between the minimum wage and employment and off the top of my head I can think of maybe 2 off the top of my head that measure the relationship between the minimum wage and profit. For obvious reasons. The same reasons. It's not a great way to get ahead in your scientific profession to point out things which make the people with the money and the power uncomfortable - Galileo discovered that one.
- ChainOfFools 2y ago
  This seems to be rooted in a generalized problem which I'll hastily call the conscious abuse of polite understanding, or abuse of economic consensus. Another possible rubric for this, a bit more sensationalized, would be "destructive precision". A simple example would be the hollowing-out of conventional terms everyone believes they hold the same settled definition of, such as "a flight." Instead of transacting according to what consensus suggests "a flight" meant a decade or two ago, when most would have expected this term to have thoroughly matured to the point of semantic stability, instead delivering against the most contextually minimized, stripped down interpretation of the term possible that still qualifies as valid, and attaching fees to all of the other attendant associations of value that used to be included in the scope of general consensus of the term.
  - SI_Rob 2y ago
    So, a pricing exploit based on arbitrage between the rigorous description (and enforcement) of payment for a service in one direction, and the comparatively un-policed description of the service delivered, in the other? Perhaps the lawyering class wants everyone to either suffer under their miserable penchant for overweening semantic nitpicking, or suffer it along with them.
    - ChainOfFools 2y ago
      A description versus price equation, where there's a lot of variables on one side and only one on the other, does seem to be the model. I guess I would add that it may only be a Salient as it is with respect to certain things like flights, because there are a couple of outstanding counter examples like cell phones and and automobiles which seem to exhibit the exact opposite trend. A deeper analysis might reveal that there is a cycle at at work here, wherein the initial novelty of a prodict or service which is destined to become a commodity, means there is not yet a strong set of expectations about what the service or product is "supposed" to provide. distinction in the market has to come from adding context to that essentially commodity utility. But later on some consumers begin to recognize that some of the additional context may not be strictly necessary or offer a value to them and would prefer compartmentalization of the core product as distinct from its value-added variants. When flights were a comparative novelty, or at least a novelty in different market segments at different times, distinction between products was through different levels and configurations of service or features rather than price. This may still be the phase of the product cycle that cell phones (setting aside the fairly stable tiers of product within that category) are in. It's harder to make as direct across the comparison with cars as they are older than both air travel and mobile phones, and because of all the regulation that enforces standardization of non-optional features related to safety.
- euroderf 2y ago
  The EU fixed it for airline tickets. It's not rocket surgery.
- chasebank 2y ago
  Recently, I've seen this bleed into our local housing rental market. They'll advertise some amount for the house, then will say the attached garage is extra per month, and moving most if not all utilities to tenant responsibility.
raizer88 2y ago
"The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it," - Jeff Bezos
- Forgeties79 2y ago
  That’s a pretty weird take to me. Crime stats and polling of people’s perception of crime show this as clearly the wrong approach for instance. Most studies show that no matter what direction crime is going in, a substantial majority of people think their neighborhoods are safer and that everywhere else is basically a war zone that is getting worse. There’s a total disconnect locally/nationally in perception that is also detached from crime stats. All of this is to say that the anecdotes are basically all but worthless in the case of understanding how bad crime is on any appreciable scale beyond a few blocks of one’s neighborhood. * https://www.pewresearch.org/short-reads/2016/11/16/voters-perceptions-of-crime-continue-to-conflict-with-reality/ https://www.pewresearch.org/short-reads/2016/11/16/voters-pe... * https://fivethirtyeight.com/features/many-americans-are-convinced-crime-is-rising-in-the-u-s-theyre-wrong/ https://fivethirtyeight.com/features/many-americans-are-conv... * https://www.vox.com/future-perfect/23663437/crime-violence-murder-homicide-cities-downtown https://www.vox.com/future-perfect/23663437/crime-violence-m... * https://www.pbs.org/newshour/amp/show/as-concerns-grow-around-surging-violent-crime-the-numbers-tell-a-different-story https://www.pbs.org/newshour/amp/show/as-concerns-grow-aroun...
  - fjdidianabak 2y ago
    I dunno, it seems in line with most stereotypes being more true than false [1]. “Common sense” is often derided in online spaces like this, but when there hasn’t been a massive media / social effort to convince the population otherwise [2], it’s pretty reliable. Taking a quick glance at the articles you linked shows the same behavior as those reporting on the economy - defining disingenuous targets so they can claim their headline is true. To tie this back to anecdotes, I think it comes down to trust. When my neighbor says they’re afraid to lose their job due to housing, food, childcare being a lot more expensive I dont see any motivated reasoning behind that statement. On the other end, economists (and all the articles you linked) have many incentives to distort the truth. On average anecdotes are going to come from a more truthful place - both because you trust the source and know their biases. [1] https://www.psychologytoday.com/us/blog/insight-therapy/201809/stereotype-accuracy-displeasing-truth https://www.psychologytoday.com/us/blog/insight-therapy/2018... [2] https://today.yougov.com/politics/articles/41556-americans-misestimate-small-subgroups-population https://today.yougov.com/politics/articles/41556-americans-m...
Fauntleroy 2y ago
Those at the top of the chain, who benefit from the "strong" economy, have an intrinsic motivation to suggest that things are going just great. Many in Washington are either suckling the teats of the wealthy through campaign finance / lobbying, or hyper-rich from investments (and other forms of economic parasitism)—providing a great deal of motivation for decision makers in US government to not give a shit.
ponector 2y ago
The answer is simple. Some consumers are feeling terrible and they are vocal about it. People mostly are ok and not talking about it.
- citizen_friend 2y ago
  Alternative theory: the metrics don’t describe our full economic experience.
  - uoaei 2y ago
    That's literally the point of the article.
    - citizen_friend 2y ago
      Yes.
- harimau777 2y ago
  Even if that's the case, that's a problem. First, it's bad for society to write people off. Are people going to be willing to contribute if they aren't sure whether they might be the next write off? Second, a small number of disenfranchised people can still cause a lot of problems if they get despirate.
  - pixl97 2y ago
    I mean, this is true. And these days these people don't even need to be real. Kick off a few hundred thousand bots along with a visible ad campaign corresponding with how bad things are and you can get the people in the "not great, not terrible" camp thinking the end of the world is here.
- nothercastle 2y ago
  The metrics are likely comparing 2020 item and 2024 item and assuming it’s the same thing but the manufacturer cleverly gutted the 2024 item of all quality parts and just kept the name
owlstuffing 2y ago
Not that economics is a credible science, but you’re conflating talking heads with economists. Talking heads exist to peddle the agenda of the elites who own them.
- 1oooqooq 2y ago
  who do you think economists also listen to?
  - braiamp 2y ago
    I hope they listen to data. Either that they gather themselves or gathered by reputable organizations. Consumer confidence index for example tries to gather the sentiment of the consumers.
    - 1oooqooq 2y ago
      data says whatever you want it to. nobody will ever make a model that is devoid of personal interest. even your example just measure how bad a product can be for maximum profit. i.e. buying ten disposables is better than one good product. where t f people got that holy image of economists?
cyanydeez 2y ago
Welath inequality means many companies just dont need the majority of consumers. Big pharma typifies his by increasing prices till they can just get a few whales to buy. The rental market and the.dojs anti trust is the same: landlorsa making money by limiting units to just the more wealth renters and leaving units empty. This is just qhat.happens wgen regulatots simply stop enforcing a minimum level of social goods.
sodality2 2y ago
This is related to a phenomenon that writer Kyla Scanlon has called the “vibecession” - a disconnect between the economy’s metrics deemed to indicate its health, and the general populace’s perception of it https://en.wikipedia.org/wiki/Vibecession https://en.wikipedia.org/wiki/Vibecession
- 1oooqooq 2y ago
  that is not a thing and that page will probably be gone soon. that is at most an attempt to control the narrative, and throw the growing inequality under the rug as some sort of mass hysteria. lame.
  - sodality2 2y ago
    It is literally explicitly addressing the situation where these indicators claim everything's okay even though no one feels like it is - the idea that just because economic health metrics are up, doesn't mean anything for the average American.
    - 1oooqooq 2y ago
      it's actually saying the opposite. it's claims is that everything really is better, but the "vibe" is to complain. it's a counter to the "silent majority" suffering in red states. it's a inane political spin that did not take on.
      - sodality2 2y ago
        I just don’t even know where you’re getting this from. I have to wonder if you’ve read the original article. If that’s what you got from the wikipedia page, it’s wrong - I have Scanlon’s book in my hand and here’s a quote straight from the vibecession chapter > “Of course, as I have talked about throughout the book, there are many real problems with the economy. We have a structural affordability crisis. A housing crisis. A healthcare crisis. A childcare crisis. The list is endless and nothing can hide anymore. The things to be anxious about are numerous. The geopolitical warfare. The walls of any sense of economic safety caving in. The endless political theatrics.” And here’s a quote from the source document that coined the term vibecession, from her Substack: > Markets are a profit-maximizing system. That is the point of All of This - the reason that people feel bad, the reason that the vibes are off, part of the reason that people get fired, companies go under, that McKinsey incentivized the opioid crisis - they knew it would kill people, but it would make money. Money is not a moral compass. How is this claiming that everything’s actually okay and that it’s just that we’re sad about stuff? If the claim was “the vibe is to complain” why did she give at least ten real problems that influence consumer sentiment there.
kjellsbells 2y ago
Two fine examples of this myopia are the basket of items that economists and government statisticians use to calculate inflation rates, and the nature of the jobs that are considered to measure labor force participation. Or perhaps more strictly, the metrics that those groups put out that the media choose to report on. CPI isnt always the best metric and something like healthcare costs are better tracked in the PCE metric. So you get this situation where CPI says "not bad, boys" and the consumers have a wildly different point of view. For labor participation, full employment is not great if everyone is working crappy jobs. I dont know if there are better metrics buried in the government's output, but it perhaps would be more in keeping with lived experience to track participation with dependence on supplemental sources of income. if you need a second job, or charity/government help, just to survive, then you dont have a "living job". That sort of thing isnt captured by LFP stats. To be clear, I do trust the govt stats in places like the UK and US. I just think they are measuring the wrong things.
- CoastalCoder 2y ago
  Could someone explain why the parent comment is down voted? I don't notice anything off about it.
AbstractH24 2y ago
Why do you exclude the possibility that talking heads in news and politics are pedaling the idea that consumers feel it’s terrible? Most everyone I know seems to be living it pretty good with much less concern for the future. Certainly compared to 2023 and even compared to 2019.
- izacus 2y ago
  What's the statistical relevancy of your "everyone I know" sample for US population in general? Are people you know of different ages, social classes, races, upbringings and living locations to capture the sentiment of population? Or are they all well off people in a few rich areas?
  - AbstractH24 2y ago
    They are concentrated in a major metro area that was among the worst affected by the pandemic in America. They span many ages, social classes, races, upbringings, and jobs, from tech to blue-collar union work. Be that as it may, my point is that the possibility exists and is almost equally as likely. Not that it is correct.
- wholinator2 2y ago
  That's very good for you, you should count yourself lucky. But i think we should trust people when they tell us how they feel. Do you live paycheck to paycheck? Are you aware that a majority oh Americans (55-69%) do, defined as struggling to save or invest anything past the monthly expenses? I'm a late 20s man who made it into tech, I'm doing great! My friend who got into tech might kind of hate their corporate job lives but they're monetarily at least able to pay their student loans after 5 years of working. A few kids were able to start construction/lawn businesses, i don't know the details but they appear to be doing well. Every single other person that i know, who's finances I'm aware of directly, or indirectly (social media posts, etc. ) is having a hard time right now. I can count on one hand the number of people who feel good about the current US economy that i know, i speak and have spoken to dozens of people about this. Literally only the comp sci graduates are having a good time right now, and even that's starting to tighten. Jobs are getting more scarce, people have to take pay cuts to be able to actually have a life again, etc. You could say I'm doing well right now and then i could say that must mean everyone is doing well and the whole thing is propaganda. But there's a lot more than just successful people out here, we're on HN anyways, that says a lot about our socioeconomic status and friend groups.
CoastalCoder 2y ago
Some factors on my list of sentiment drags: * Manufacturers reducing product quality without buyers' knowledge. E.g., Pyrex or some SSD makers. * Shrinkflation: grocery stores selling slightly smaller-sized packages without buyers' knowledge. E.g., containers that used to be square, staying equally wide (for shelf space facing) but less deep. * Widespread Terms and Conditions / EULAs that undermine previously reliable consumer protections. * The sense that privacy-preserving products are now out of my financial reach, due to surveillance capitalism. I guess the main pattern in these things is a sense of failed consumer protections. EDIT: I'm ranting about consumer sentiment, which is probably different from economic sentiment. Apologies for going off topic.
- nothercastle 2y ago
  I see a lot of stuff decrease in quality and increase in price. Just this year 2024 bikes in the 2k range now are shipping with garage tier SRAM groups instead of last year where they had Shimannos. If you want to good stuff it’s 2700 now. Paying more for less is a real drag
- pbhjpbhj 2y ago
  Yes, product changes should be logged IMO so that customers can access that information. Companies essentially pass off a new product as the old product now, lying to consumers. Capitalism relies on informed customers to target purchases towards the 'best' products; this breaks that ability. VC firms seem to buy well-established companies, reduce the quality and ride them into the ground, destroying a lot of value that has built up over a long time. Rinse-and-repeat and the overall value of products goes down. This is a point for government to require a detailed account of products. It shouldn't be a mystery whether shrinkflation has occurred it should say it right on the product, and be confirmed in a government verified database. In the UK it feels more like corrupted consumer protections. I suppose that's a type of failed, but it's not because the consumer protections were bad, it's because they were removed by a government who work for (or just are) the capitalists rather than the demos.
qp11 2y ago
The issues have been well understood for decades but the fixes involves dismantling existing power structures so nothing simple about it. Short summary of the issues - https://michael-hudson.com/2023/07/global-economic-history-in-2-5-hours/ https://michael-hudson.com/2023/07/global-economic-history-i...
JumpCrisscross 2y ago
> method for understanding the economy is flawed and is not properly capturing what all consumers know intuitively It’s not flawed, economic literacy in the general population just sucks and thus so does the popular discourse. The closer you are to the minimum wage or tech sector, the worse you’re doing; the more you make and more assets you have the better you’re doing [1]. The measures are there. They show a bifurcating economy, and in particular, one fracturing along social lines, thereby inhibiting information permeation. They’re just buried in e.g. the Fed’s Beige Books, which aren’t consumed as vociferously as TV news. [1] https://www.wsj.com/economy/consumers/economic-data-paint-a-picture-of-two-americas-fb10e908 https://www.wsj.com/economy/consumers/economic-data-paint-a-...
robotcapital 2y ago
Part of the problem is that that “intuition” changes based on how you the ask the question and who you ask it to. A good example of this is polling that shows Americans as a whole believe the country’s finances will be worse off a year from now at twice the rate as their own personal finances[0]. So I’d argue that even anecdotes and intuition need to be taken with grain of salt, particularly given that it’s an election year with a polarized electorate. [0] https://www.pewresearch.org/politics/2024/05/23/views-of-the-nations-economy-may-2024/ https://www.pewresearch.org/politics/2024/05/23/views-of-the...
- pixl97 2y ago
  >polarized electorate And I would add with a polarized media whos parent companies fortunes depend on which people get elected. The amount of corporate financed propaganda out there is out of control.
  - robotcapital 2y ago
    We’re getting off on a tangent here about here about the mechanism behind that polarization, but it reflects the broader point I was trying to make with my comment. That is to be skeptical of simplistic answer, like “economic termites” or “corporate propaganda”, to complex topics like the economy or polarization. It might imply an agenda other than seeking the truth.
carlosjobim 2y ago
> Our method for understanding the economy is flawed There is no misunderstanding. In the Soviet Union, the rulers and their media would every day report on how fantastical the economy was doing and how production was beating records etc. Get used, because this will continue for the rest of your life.
- chii 2y ago
  But there was shortages of everything in the USSR. What shortages are there in the US?
  - mperham 2y ago
    Try to get an appointment to see a doctor. Food deserts.
    - lotsoweiners 2y ago
      > Try to get an appointment to see a doctor Done this literally dozens of times over the past couple of years for myself, kids, and wife and have never had an issue. Even been offered appointments same or next day. Am I missing something?
      - Izkata 2y ago
        Are you urban, suburban, or rural? Something I've been suspicious of for a while now, the farther from the cities the worse it is. Grocery prices, for example, didn't start rising in the city I'm in until a year or more after I started seeing people complaining about it, and a good chunk of them were suburban or rural.
        lotsoweiners 2y ago
        Suburban
      - GOD_Over_Djinn 2y ago
Spooky23 2y ago
There are two Americas, the one that HN folks inhabit and the underclass. The former is doing great. The latter has grown and shifted. I grew up in a rural community that was in the process of unraveling from a prosperous farming and light industrial area to a rural slum. There are zero operational farms in that area today. The one I worked for as a teen was in continuous operation since the Dutch colonial period. That’s an example of why the nihilism of MAGA is so appealing. The world is collapsing around many people. These issues are caused by demographics and macro trends. The laws have changed to facilitate generational wealth transfer, and that process will change the way the economy works and further fuel unrest. This stuff is unlikely to get fixed in my lifetime.
- apsec112 2y ago
  Since 2016, real (inflation-adjusted) wages have risen quickly for people in the bottom quartile, while for upper-income workers they've been stagnant. Obviously, most people on HN are still better off than manual laborers, but the gap has narrowed substantially (a big reversal from 1995-2015) and that's a good thing. https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F377bd17a-7b46-498f-9aac-827f2b7c8c2f_2886x1843.png https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_pr...
  - lupire 2y ago
    That graph shows beginning of a recovery from large wage decreased of the last few years. Equality is nice, but the main story is that everyone is doing worse.
  - Der_Einzige 2y ago
    I keep telling everyone I know about this and literally zero people believe me! So done with Americans finally getting into boom times and still feeling like it’s 2008. No one here ever wants to admit that they have it good.
    - uoaei 2y ago
CuriouslyC 2y ago
The vibecession isn't totally wrong, there are a lot of paradoxes you hear when you ask people about how they're doing vs how other people are doing, Paul Krugman has covered this a bit. The middle class and up is doing well, basically anyone who has mortgage debt and a white collar job. Lower classes were doing well due to pandemic wage gains, but inflation and housing prices have now outpaced those.
hanniabu 2y ago
> is not properly capturing what all consumers know Yeah because every time a metric looks bad it gets adjusted to look better either by changing the weights or removing items from the calculation which dilutes it's effectiveness
greesil 2y ago
Ezra Klein just had a very relevant podcast on this. https://www.nytimes.com/2024/06/07/opinion/ezra-klein-podcast-annie-lowrey.html https://www.nytimes.com/2024/06/07/opinion/ezra-klein-podcas...
gruez 2y ago
>I think this goes the other way around. Our method for understanding the economy is flawed and is not properly capturing what all consumers know intuitively, things kind of suck, even when you have a job and even when you're still buying things. It seems kind of lazy to observe that anecdotes contradict statistics, and then conclude that it's the statistics are wrong without providing any empirical evidence to the contrary. This style of argumentation basically allows you to make whatever "intuitive" claim you want and handwave any empirical evidence to the contrary because the empirical evidence isn't "capturing what [we] all know intuitively".
- AnimalMuppet 2y ago
  Anecdote would be saying that some individual over on 4th Street feels that things aren't that great. "Consumer sentiment" (or whatever name) is actually a statistic. So now you're at two statistics, one that measures economic activity in jobs and output, and the other that measures peoples' intuitive feel of the economy. I think the gap between them might be that peoples' confidence was shaken by inflation reigniting after 15 years.
  - gruez 2y ago
    But polls show that around of population are flat out wrong on certain objective measures, like GDP, the S&P 500 index, and the unemployment rate[1]. If they can't get basic factual questions right, why should we put much stock in their "intuitive feel of the economy"? [1] https://www.theguardian.com/us-news/article/2024/may/22/poll-economy-recession-biden https://www.theguardian.com/us-news/article/2024/may/22/poll...
    - Izkata 2y ago
      That's exactly the point - there's some sort of disconnect and people just want to say "they're wrong" instead of trying to figure out why people feel that way.
      - deleted 2y ago
        [deleted]
braiamp 2y ago
> economists unduly focus on a few metrics of dubious quality Which is funny, because as economist, half of the material is "these metric don't matter, if there's no benefit for the population, but you can't ignore them either". It can be summarized as something like "economic indicators are not perfect measures of general well-being, but you need the indicators to look good to be able to distribute well-being". The thing is, that the public doesn't get that _nuance_. Good economist know that a growing GPD doesn't mean that everyone is feeling good, but also knows that a shrinking one means that most will fell bad.
- creer 2y ago
  So perhaps economists need to work on this "comm" issue. At least the ones involved in government stats. "It's not their job" only if they actively make it not their job. I ran into this with NASA. A NASA "scientist" insisted it was proper for them and their colleagues to ignore both valid and crackpot suggestions or questions on the rationale that "crackpots are gonna crackpot and they have limited time so the proper response was to just ignore everyone and everything except their (collectively) narrow research projects." - Which are each extremely specific and grounded in massive piles of internal assumptions as to what matters. There was zero interest in the idea that they were paid by the public and might want to improve their image now and then.
hehdhdjehehegwv 2y ago
My theory is the pandemic exposed the bear minimum people will accept and society won’t collapse. Companies learned the true baseline of what they can get away with and we’re in a new permanent reality of everything sucking right up to the exact line where it would collapse of it sucked more.
tuatoru 2y ago
Just listened to a podcast that pointed out that housing is expensive, education is expensive, childcare is expensive, cars are expensive, and money is expensive (interest rates are high). And out of pocket expenses for healthcare are going up and up. Economists don't have a handle on the compromises and adaptations that people have been making over the last decade or more, e.g. moving to the cheaper place further out of town rather than where they want to live, or house-sharing rather than living as a couple. It seems people are at the limit of the adaptations they can make and are pretty pissed off about it.
bwanab 2y ago
The personal experience of the economy isn't quite as you make it. In polls, people do complain about the national economy being in terrible shape, but by a fairly good margin report that their own finances are in good shape. It's hard to weave a coherent narrative from those contradictory data.
- enraged_camel 2y ago
  This discrepancy is easy to explain. My personal finances are quite fine but I have a LOT of friends who have to make a living doing several gig jobs. Said friends are, on paper, employed, and are getting by. But they are quite miserable: stressed, overworked, no leisure time and no benefits. That’s why the article author is correct that macro stats aren’t good at capturing the quality of the lived experiences of people - just the quantities.
rapjr9 2y ago
So I was just buying some electronic components on eBay and noticed that once again Chinese product sellers (and their US resellers) lie, cheat and poison US customers. This 100W solar panel for $12.99 is actually 5W: https://www.ebay.com/itm/165973941939 https://www.ebay.com/itm/165973941939 The pictures all prominently say "100W". The specs says output of 5V 2A (10W). The specs also say max output of 5V 1A (5W). It is nowhere near 100W. Customer rating of the seller is 99.1%. People expect to be lied to? I've been buying lots of stuff, both professionally and personally for many years and this has been a concerning trend. China is selling us childrens toys that contain lead paint and lead based solder in electronics. Laser pointers that can easily blind you labeled as safe at 5mW but really have no IR filter (to cut costs) so they output 50 to 150mW which people can't see and which can invisibly blind them. Electrical products that are not UL certified and are not safely designed (there are teardown channels on Youtube where they take apart products and they'll find AC powered stuff where the ground line is left hanging loose inside, not connected to anything). And our government lets this happen, has been letting this happen for decades. Ebay profits from it. No one is held accountable. What happened to law? Like Truth In Advertising? What happened to UL listing? What happened to fraud prevention? Our government is not fulfilling it's function. Crime is rampant and obvious. This is an obvious and serious failure of government. China is cheating US customers (and Chinese customers also apparently), and is poisoning and harming us. Seems like an absolutely real Chinese plot to attack democracy and it is working and our government is letting it happen. Why? Because "cheap stuff"? eBay profits? I think people see this kind of thing and think that there is no rule of law any more, which influences them and corrupts their behavior as well. Everybody is doing it, so they think they should also. Any thoughts about this? It seems to have been a gradual loosening of standards. It's happened across the business world, in government and in policing. The police won't investigate a crime unless it involves more than $10,000 or harms a person. Business advice for startups is to "fake it until you make it". Hospitals will charge people without insurance 20 times the normal price. Corporations considered fines for breaking the law the cost of doing business. Private equity "extracts value" by destroying companies. It seems like everyone has given up and corruption rules the day and everyone has to watch out for themselves. Are there just too many people now making the world too complex to oversee? Maybe these systems have never worked because they rely on most people complying and a lot of people now cheat? Maybe the internet/web makes it too easy to start a new company identity if reputation is lost? Have corporations captured government and hollowed out law? The level of lawlessness seems to have grown a lot; corporations, government departments, and police agencies all often just disregard demands from higher up for accountability and say they refuse to provide requested data. Go ahead and sue them and they'll pay the fine (years from now), continue doing it, and pass the costs on.

jprete 2y ago

They're addicted to metrics instead of observation. Anything that isn't easily measured is considered to not exist, including how people feel about it. Now that I think about it, that's literal selection pressure for psychopathy.

silverquiet 2y ago

I agree with much of this and I'll add one of my biggest stressors - opaque pricing. One of the biggest "innovations" in the US in the last decade or so seems to be to add as many hidden fees as possible to every service imaginable. Obviously it's hardly a new idea; I'm sure that human nature being what it is, they had to deal with it in Mesopotamia. But it makes budgeting very difficult; I suppose it's like living in a corrupt country; you just have to add an overhead for bribes as part of day-to-day living. Perhaps it isn't "like" living in a corrupt country; perhaps it just is living in a corrupt country.

phkahler 2y ago
>> I'll add one of my biggest stressors - opaque pricing. Economic "models" make assumptions like markets being efficient. Meanwhile in the business classes next door they teach how to avoid competition because it's a race to the bottom. They all learn the prisoners dilemma as an example because it's how you need to think to avoid overt collusion. I'd like an economic model as powerful as the laws of thermodynamics, where everything is included if not explicitly. But I haven't seen one.
- JumpCrisscross 2y ago
  > Economic "models" make assumptions like markets being efficient No? You’re thinking of a specific class of models. Generally speaking, prescriptive economics is about characterising what an efficient market would look like and then identifying why reality is not that. (And whether that deviance is good or bad.) This article could be seen doing that. It seems like domains should be closed to $2, given an efficient market. But they’re nine going on twelve.
  - pydry 2y ago
    Most of the assumptions made in economic models conceal sources of profit. They dont appear to be there to simplify complexity because they simulate situations that have never and will never be approximated (never been perfect competition or information, never will be). It's unlike, say, physics in this respect.
    - JumpCrisscross 2y ago
      > Most of the assumptions made in economic models conceal sources of profit This is wildly inaccurate. A huge amount of economics is focussed on profit. For obvious reasons. > never been perfect competition or information, never will be Frictionless surfaces are mostly a fiction, too. That doesn’t mean calculating the expected outcome in a frictionless condition is useless. If the deviance is more than you’d expect from friction, that’s informative. Unlike physics, a lot of people think their undergrad 101 course plus skimming the Economist an economist themselves makes. It’s a common hubris, albeit one unusually common in tech. (Disclaimer: I’m not an economist. But I know the boundaries of my circle of competence in this.)
      - pydry 2y ago
        >This is wildly inaccurate. A huge amount of economics is focussed on profit. For obvious reasons. As an example there are countless studies looking at the relationship between the minimum wage and employment and off the top of my head I can think of maybe 2 off the top of my head that measure the relationship between the minimum wage and profit. For obvious reasons. The same reasons. It's not a great way to get ahead in your scientific profession to point out things which make the people with the money and the power uncomfortable - Galileo discovered that one.
ChainOfFools 2y ago
This seems to be rooted in a generalized problem which I'll hastily call the conscious abuse of polite understanding, or abuse of economic consensus. Another possible rubric for this, a bit more sensationalized, would be "destructive precision". A simple example would be the hollowing-out of conventional terms everyone believes they hold the same settled definition of, such as "a flight." Instead of transacting according to what consensus suggests "a flight" meant a decade or two ago, when most would have expected this term to have thoroughly matured to the point of semantic stability, instead delivering against the most contextually minimized, stripped down interpretation of the term possible that still qualifies as valid, and attaching fees to all of the other attendant associations of value that used to be included in the scope of general consensus of the term.
- SI_Rob 2y ago
  So, a pricing exploit based on arbitrage between the rigorous description (and enforcement) of payment for a service in one direction, and the comparatively un-policed description of the service delivered, in the other? Perhaps the lawyering class wants everyone to either suffer under their miserable penchant for overweening semantic nitpicking, or suffer it along with them.
  - ChainOfFools 2y ago
    A description versus price equation, where there's a lot of variables on one side and only one on the other, does seem to be the model. I guess I would add that it may only be a Salient as it is with respect to certain things like flights, because there are a couple of outstanding counter examples like cell phones and and automobiles which seem to exhibit the exact opposite trend. A deeper analysis might reveal that there is a cycle at at work here, wherein the initial novelty of a prodict or service which is destined to become a commodity, means there is not yet a strong set of expectations about what the service or product is "supposed" to provide. distinction in the market has to come from adding context to that essentially commodity utility. But later on some consumers begin to recognize that some of the additional context may not be strictly necessary or offer a value to them and would prefer compartmentalization of the core product as distinct from its value-added variants. When flights were a comparative novelty, or at least a novelty in different market segments at different times, distinction between products was through different levels and configurations of service or features rather than price. This may still be the phase of the product cycle that cell phones (setting aside the fairly stable tiers of product within that category) are in. It's harder to make as direct across the comparison with cars as they are older than both air travel and mobile phones, and because of all the regulation that enforces standardization of non-optional features related to safety.
euroderf 2y ago
The EU fixed it for airline tickets. It's not rocket surgery.
chasebank 2y ago
Recently, I've seen this bleed into our local housing rental market. They'll advertise some amount for the house, then will say the attached garage is extra per month, and moving most if not all utilities to tenant responsibility.

raizer88 2y ago

"The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it," - Jeff Bezos

Forgeties79 2y ago
That’s a pretty weird take to me. Crime stats and polling of people’s perception of crime show this as clearly the wrong approach for instance. Most studies show that no matter what direction crime is going in, a substantial majority of people think their neighborhoods are safer and that everywhere else is basically a war zone that is getting worse. There’s a total disconnect locally/nationally in perception that is also detached from crime stats. All of this is to say that the anecdotes are basically all but worthless in the case of understanding how bad crime is on any appreciable scale beyond a few blocks of one’s neighborhood. * https://www.pewresearch.org/short-reads/2016/11/16/voters-perceptions-of-crime-continue-to-conflict-with-reality/ https://www.pewresearch.org/short-reads/2016/11/16/voters-pe... * https://fivethirtyeight.com/features/many-americans-are-convinced-crime-is-rising-in-the-u-s-theyre-wrong/ https://fivethirtyeight.com/features/many-americans-are-conv... * https://www.vox.com/future-perfect/23663437/crime-violence-murder-homicide-cities-downtown https://www.vox.com/future-perfect/23663437/crime-violence-m... * https://www.pbs.org/newshour/amp/show/as-concerns-grow-around-surging-violent-crime-the-numbers-tell-a-different-story https://www.pbs.org/newshour/amp/show/as-concerns-grow-aroun...
- fjdidianabak 2y ago
  I dunno, it seems in line with most stereotypes being more true than false [1]. “Common sense” is often derided in online spaces like this, but when there hasn’t been a massive media / social effort to convince the population otherwise [2], it’s pretty reliable. Taking a quick glance at the articles you linked shows the same behavior as those reporting on the economy - defining disingenuous targets so they can claim their headline is true. To tie this back to anecdotes, I think it comes down to trust. When my neighbor says they’re afraid to lose their job due to housing, food, childcare being a lot more expensive I dont see any motivated reasoning behind that statement. On the other end, economists (and all the articles you linked) have many incentives to distort the truth. On average anecdotes are going to come from a more truthful place - both because you trust the source and know their biases. [1] https://www.psychologytoday.com/us/blog/insight-therapy/201809/stereotype-accuracy-displeasing-truth https://www.psychologytoday.com/us/blog/insight-therapy/2018... [2] https://today.yougov.com/politics/articles/41556-americans-misestimate-small-subgroups-population https://today.yougov.com/politics/articles/41556-americans-m...

Fauntleroy 2y ago

Those at the top of the chain, who benefit from the "strong" economy, have an intrinsic motivation to suggest that things are going just great. Many in Washington are either suckling the teats of the wealthy through campaign finance / lobbying, or hyper-rich from investments (and other forms of economic parasitism)—providing a great deal of motivation for decision makers in US government to not give a shit.

ponector 2y ago

The answer is simple. Some consumers are feeling terrible and they are vocal about it. People mostly are ok and not talking about it.

citizen_friend 2y ago
Alternative theory: the metrics don’t describe our full economic experience.
- uoaei 2y ago
  That's literally the point of the article.
  - citizen_friend 2y ago
    Yes.
harimau777 2y ago
Even if that's the case, that's a problem. First, it's bad for society to write people off. Are people going to be willing to contribute if they aren't sure whether they might be the next write off? Second, a small number of disenfranchised people can still cause a lot of problems if they get despirate.
- pixl97 2y ago
  I mean, this is true. And these days these people don't even need to be real. Kick off a few hundred thousand bots along with a visible ad campaign corresponding with how bad things are and you can get the people in the "not great, not terrible" camp thinking the end of the world is here.
nothercastle 2y ago
The metrics are likely comparing 2020 item and 2024 item and assuming it’s the same thing but the manufacturer cleverly gutted the 2024 item of all quality parts and just kept the name

owlstuffing 2y ago

Not that economics is a credible science, but you’re conflating talking heads with economists. Talking heads exist to peddle the agenda of the elites who own them.

1oooqooq 2y ago
who do you think economists also listen to?
- braiamp 2y ago
  I hope they listen to data. Either that they gather themselves or gathered by reputable organizations. Consumer confidence index for example tries to gather the sentiment of the consumers.
  - 1oooqooq 2y ago
    data says whatever you want it to. nobody will ever make a model that is devoid of personal interest. even your example just measure how bad a product can be for maximum profit. i.e. buying ten disposables is better than one good product. where t f people got that holy image of economists?

cyanydeez 2y ago

Welath inequality means many companies just dont need the majority of consumers. Big pharma typifies his by increasing prices till they can just get a few whales to buy. The rental market and the.dojs anti trust is the same: landlorsa making money by limiting units to just the more wealth renters and leaving units empty. This is just qhat.happens wgen regulatots simply stop enforcing a minimum level of social goods.

sodality2 2y ago

This is related to a phenomenon that writer Kyla Scanlon has called the “vibecession” - a disconnect between the economy’s metrics deemed to indicate its health, and the general populace’s perception of it https://en.wikipedia.org/wiki/Vibecession https://en.wikipedia.org/wiki/Vibecession

1oooqooq 2y ago
that is not a thing and that page will probably be gone soon. that is at most an attempt to control the narrative, and throw the growing inequality under the rug as some sort of mass hysteria. lame.
- sodality2 2y ago
  It is literally explicitly addressing the situation where these indicators claim everything's okay even though no one feels like it is - the idea that just because economic health metrics are up, doesn't mean anything for the average American.
  - 1oooqooq 2y ago
    it's actually saying the opposite. it's claims is that everything really is better, but the "vibe" is to complain. it's a counter to the "silent majority" suffering in red states. it's a inane political spin that did not take on.
    - sodality2 2y ago
      I just don’t even know where you’re getting this from. I have to wonder if you’ve read the original article. If that’s what you got from the wikipedia page, it’s wrong - I have Scanlon’s book in my hand and here’s a quote straight from the vibecession chapter > “Of course, as I have talked about throughout the book, there are many real problems with the economy. We have a structural affordability crisis. A housing crisis. A healthcare crisis. A childcare crisis. The list is endless and nothing can hide anymore. The things to be anxious about are numerous. The geopolitical warfare. The walls of any sense of economic safety caving in. The endless political theatrics.” And here’s a quote from the source document that coined the term vibecession, from her Substack: > Markets are a profit-maximizing system. That is the point of All of This - the reason that people feel bad, the reason that the vibes are off, part of the reason that people get fired, companies go under, that McKinsey incentivized the opioid crisis - they knew it would kill people, but it would make money. Money is not a moral compass. How is this claiming that everything’s actually okay and that it’s just that we’re sad about stuff? If the claim was “the vibe is to complain” why did she give at least ten real problems that influence consumer sentiment there.

kjellsbells 2y ago

Two fine examples of this myopia are the basket of items that economists and government statisticians use to calculate inflation rates, and the nature of the jobs that are considered to measure labor force participation. Or perhaps more strictly, the metrics that those groups put out that the media choose to report on. CPI isnt always the best metric and something like healthcare costs are better tracked in the PCE metric. So you get this situation where CPI says "not bad, boys" and the consumers have a wildly different point of view. For labor participation, full employment is not great if everyone is working crappy jobs. I dont know if there are better metrics buried in the government's output, but it perhaps would be more in keeping with lived experience to track participation with dependence on supplemental sources of income. if you need a second job, or charity/government help, just to survive, then you dont have a "living job". That sort of thing isnt captured by LFP stats. To be clear, I do trust the govt stats in places like the UK and US. I just think they are measuring the wrong things.

CoastalCoder 2y ago
Could someone explain why the parent comment is down voted? I don't notice anything off about it.

AbstractH24 2y ago

Why do you exclude the possibility that talking heads in news and politics are pedaling the idea that consumers feel it’s terrible? Most everyone I know seems to be living it pretty good with much less concern for the future. Certainly compared to 2023 and even compared to 2019.

izacus 2y ago
What's the statistical relevancy of your "everyone I know" sample for US population in general? Are people you know of different ages, social classes, races, upbringings and living locations to capture the sentiment of population? Or are they all well off people in a few rich areas?
- AbstractH24 2y ago
  They are concentrated in a major metro area that was among the worst affected by the pandemic in America. They span many ages, social classes, races, upbringings, and jobs, from tech to blue-collar union work. Be that as it may, my point is that the possibility exists and is almost equally as likely. Not that it is correct.
wholinator2 2y ago
That's very good for you, you should count yourself lucky. But i think we should trust people when they tell us how they feel. Do you live paycheck to paycheck? Are you aware that a majority oh Americans (55-69%) do, defined as struggling to save or invest anything past the monthly expenses? I'm a late 20s man who made it into tech, I'm doing great! My friend who got into tech might kind of hate their corporate job lives but they're monetarily at least able to pay their student loans after 5 years of working. A few kids were able to start construction/lawn businesses, i don't know the details but they appear to be doing well. Every single other person that i know, who's finances I'm aware of directly, or indirectly (social media posts, etc. ) is having a hard time right now. I can count on one hand the number of people who feel good about the current US economy that i know, i speak and have spoken to dozens of people about this. Literally only the comp sci graduates are having a good time right now, and even that's starting to tighten. Jobs are getting more scarce, people have to take pay cuts to be able to actually have a life again, etc. You could say I'm doing well right now and then i could say that must mean everyone is doing well and the whole thing is propaganda. But there's a lot more than just successful people out here, we're on HN anyways, that says a lot about our socioeconomic status and friend groups.

CoastalCoder 2y ago

Some factors on my list of sentiment drags: * Manufacturers reducing product quality without buyers' knowledge. E.g., Pyrex or some SSD makers. * Shrinkflation: grocery stores selling slightly smaller-sized packages without buyers' knowledge. E.g., containers that used to be square, staying equally wide (for shelf space facing) but less deep. * Widespread Terms and Conditions / EULAs that undermine previously reliable consumer protections. * The sense that privacy-preserving products are now out of my financial reach, due to surveillance capitalism. I guess the main pattern in these things is a sense of failed consumer protections. EDIT: I'm ranting about consumer sentiment, which is probably different from economic sentiment. Apologies for going off topic.

nothercastle 2y ago
I see a lot of stuff decrease in quality and increase in price. Just this year 2024 bikes in the 2k range now are shipping with garage tier SRAM groups instead of last year where they had Shimannos. If you want to good stuff it’s 2700 now. Paying more for less is a real drag
pbhjpbhj 2y ago
Yes, product changes should be logged IMO so that customers can access that information. Companies essentially pass off a new product as the old product now, lying to consumers. Capitalism relies on informed customers to target purchases towards the 'best' products; this breaks that ability. VC firms seem to buy well-established companies, reduce the quality and ride them into the ground, destroying a lot of value that has built up over a long time. Rinse-and-repeat and the overall value of products goes down. This is a point for government to require a detailed account of products. It shouldn't be a mystery whether shrinkflation has occurred it should say it right on the product, and be confirmed in a government verified database. In the UK it feels more like corrupted consumer protections. I suppose that's a type of failed, but it's not because the consumer protections were bad, it's because they were removed by a government who work for (or just are) the capitalists rather than the demos.

qp11 2y ago

The issues have been well understood for decades but the fixes involves dismantling existing power structures so nothing simple about it. Short summary of the issues - https://michael-hudson.com/2023/07/global-economic-history-in-2-5-hours/ https://michael-hudson.com/2023/07/global-economic-history-i...

JumpCrisscross 2y ago

> method for understanding the economy is flawed and is not properly capturing what all consumers know intuitively It’s not flawed, economic literacy in the general population just sucks and thus so does the popular discourse. The closer you are to the minimum wage or tech sector, the worse you’re doing; the more you make and more assets you have the better you’re doing [1]. The measures are there. They show a bifurcating economy, and in particular, one fracturing along social lines, thereby inhibiting information permeation. They’re just buried in e.g. the Fed’s Beige Books, which aren’t consumed as vociferously as TV news. [1] https://www.wsj.com/economy/consumers/economic-data-paint-a-picture-of-two-americas-fb10e908 https://www.wsj.com/economy/consumers/economic-data-paint-a-...

robotcapital 2y ago

Part of the problem is that that “intuition” changes based on how you the ask the question and who you ask it to. A good example of this is polling that shows Americans as a whole believe the country’s finances will be worse off a year from now at twice the rate as their own personal finances[0]. So I’d argue that even anecdotes and intuition need to be taken with grain of salt, particularly given that it’s an election year with a polarized electorate. [0] https://www.pewresearch.org/politics/2024/05/23/views-of-the-nations-economy-may-2024/ https://www.pewresearch.org/politics/2024/05/23/views-of-the...

pixl97 2y ago
>polarized electorate And I would add with a polarized media whos parent companies fortunes depend on which people get elected. The amount of corporate financed propaganda out there is out of control.
- robotcapital 2y ago
  We’re getting off on a tangent here about here about the mechanism behind that polarization, but it reflects the broader point I was trying to make with my comment. That is to be skeptical of simplistic answer, like “economic termites” or “corporate propaganda”, to complex topics like the economy or polarization. It might imply an agenda other than seeking the truth.

carlosjobim 2y ago

> Our method for understanding the economy is flawed There is no misunderstanding. In the Soviet Union, the rulers and their media would every day report on how fantastical the economy was doing and how production was beating records etc. Get used, because this will continue for the rest of your life.

chii 2y ago
But there was shortages of everything in the USSR. What shortages are there in the US?
- mperham 2y ago
  Try to get an appointment to see a doctor. Food deserts.
  - lotsoweiners 2y ago
    > Try to get an appointment to see a doctor Done this literally dozens of times over the past couple of years for myself, kids, and wife and have never had an issue. Even been offered appointments same or next day. Am I missing something?
    - Izkata 2y ago
      Are you urban, suburban, or rural? Something I've been suspicious of for a while now, the farther from the cities the worse it is. Grocery prices, for example, didn't start rising in the city I'm in until a year or more after I started seeing people complaining about it, and a good chunk of them were suburban or rural.
      - lotsoweiners 2y ago
        Suburban
    - GOD_Over_Djinn 2y ago

Spooky23 2y ago

There are two Americas, the one that HN folks inhabit and the underclass. The former is doing great. The latter has grown and shifted. I grew up in a rural community that was in the process of unraveling from a prosperous farming and light industrial area to a rural slum. There are zero operational farms in that area today. The one I worked for as a teen was in continuous operation since the Dutch colonial period. That’s an example of why the nihilism of MAGA is so appealing. The world is collapsing around many people. These issues are caused by demographics and macro trends. The laws have changed to facilitate generational wealth transfer, and that process will change the way the economy works and further fuel unrest. This stuff is unlikely to get fixed in my lifetime.

apsec112 2y ago
Since 2016, real (inflation-adjusted) wages have risen quickly for people in the bottom quartile, while for upper-income workers they've been stagnant. Obviously, most people on HN are still better off than manual laborers, but the gap has narrowed substantially (a big reversal from 1995-2015) and that's a good thing. https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F377bd17a-7b46-498f-9aac-827f2b7c8c2f_2886x1843.png https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_pr...
- lupire 2y ago
  That graph shows beginning of a recovery from large wage decreased of the last few years. Equality is nice, but the main story is that everyone is doing worse.
- Der_Einzige 2y ago
  I keep telling everyone I know about this and literally zero people believe me! So done with Americans finally getting into boom times and still feeling like it’s 2008. No one here ever wants to admit that they have it good.
  - uoaei 2y ago

CuriouslyC 2y ago

The vibecession isn't totally wrong, there are a lot of paradoxes you hear when you ask people about how they're doing vs how other people are doing, Paul Krugman has covered this a bit. The middle class and up is doing well, basically anyone who has mortgage debt and a white collar job. Lower classes were doing well due to pandemic wage gains, but inflation and housing prices have now outpaced those.

hanniabu 2y ago

> is not properly capturing what all consumers know Yeah because every time a metric looks bad it gets adjusted to look better either by changing the weights or removing items from the calculation which dilutes it's effectiveness

greesil 2y ago

Ezra Klein just had a very relevant podcast on this. https://www.nytimes.com/2024/06/07/opinion/ezra-klein-podcast-annie-lowrey.html https://www.nytimes.com/2024/06/07/opinion/ezra-klein-podcas...

gruez 2y ago

>I think this goes the other way around. Our method for understanding the economy is flawed and is not properly capturing what all consumers know intuitively, things kind of suck, even when you have a job and even when you're still buying things. It seems kind of lazy to observe that anecdotes contradict statistics, and then conclude that it's the statistics are wrong without providing any empirical evidence to the contrary. This style of argumentation basically allows you to make whatever "intuitive" claim you want and handwave any empirical evidence to the contrary because the empirical evidence isn't "capturing what [we] all know intuitively".

AnimalMuppet 2y ago
Anecdote would be saying that some individual over on 4th Street feels that things aren't that great. "Consumer sentiment" (or whatever name) is actually a statistic. So now you're at two statistics, one that measures economic activity in jobs and output, and the other that measures peoples' intuitive feel of the economy. I think the gap between them might be that peoples' confidence was shaken by inflation reigniting after 15 years.
- gruez 2y ago
  But polls show that around of population are flat out wrong on certain objective measures, like GDP, the S&P 500 index, and the unemployment rate[1]. If they can't get basic factual questions right, why should we put much stock in their "intuitive feel of the economy"? [1] https://www.theguardian.com/us-news/article/2024/may/22/poll-economy-recession-biden https://www.theguardian.com/us-news/article/2024/may/22/poll...
  - Izkata 2y ago
    That's exactly the point - there's some sort of disconnect and people just want to say "they're wrong" instead of trying to figure out why people feel that way.
    - deleted 2y ago
      [deleted]

braiamp 2y ago

> economists unduly focus on a few metrics of dubious quality Which is funny, because as economist, half of the material is "these metric don't matter, if there's no benefit for the population, but you can't ignore them either". It can be summarized as something like "economic indicators are not perfect measures of general well-being, but you need the indicators to look good to be able to distribute well-being". The thing is, that the public doesn't get that _nuance_. Good economist know that a growing GPD doesn't mean that everyone is feeling good, but also knows that a shrinking one means that most will fell bad.

creer 2y ago
So perhaps economists need to work on this "comm" issue. At least the ones involved in government stats. "It's not their job" only if they actively make it not their job. I ran into this with NASA. A NASA "scientist" insisted it was proper for them and their colleagues to ignore both valid and crackpot suggestions or questions on the rationale that "crackpots are gonna crackpot and they have limited time so the proper response was to just ignore everyone and everything except their (collectively) narrow research projects." - Which are each extremely specific and grounded in massive piles of internal assumptions as to what matters. There was zero interest in the idea that they were paid by the public and might want to improve their image now and then.

hehdhdjehehegwv 2y ago

My theory is the pandemic exposed the bear minimum people will accept and society won’t collapse. Companies learned the true baseline of what they can get away with and we’re in a new permanent reality of everything sucking right up to the exact line where it would collapse of it sucked more.

tuatoru 2y ago

Just listened to a podcast that pointed out that housing is expensive, education is expensive, childcare is expensive, cars are expensive, and money is expensive (interest rates are high). And out of pocket expenses for healthcare are going up and up. Economists don't have a handle on the compromises and adaptations that people have been making over the last decade or more, e.g. moving to the cheaper place further out of town rather than where they want to live, or house-sharing rather than living as a couple. It seems people are at the limit of the adaptations they can make and are pretty pissed off about it.

bwanab 2y ago

The personal experience of the economy isn't quite as you make it. In polls, people do complain about the national economy being in terrible shape, but by a fairly good margin report that their own finances are in good shape. It's hard to weave a coherent narrative from those contradictory data.

enraged_camel 2y ago
This discrepancy is easy to explain. My personal finances are quite fine but I have a LOT of friends who have to make a living doing several gig jobs. Said friends are, on paper, employed, and are getting by. But they are quite miserable: stressed, overworked, no leisure time and no benefits. That’s why the article author is correct that macro stats aren’t good at capturing the quality of the lived experiences of people - just the quantities.

rapjr9 2y ago

So I was just buying some electronic components on eBay and noticed that once again Chinese product sellers (and their US resellers) lie, cheat and poison US customers. This 100W solar panel for $12.99 is actually 5W: https://www.ebay.com/itm/165973941939 https://www.ebay.com/itm/165973941939 The pictures all prominently say "100W". The specs says output of 5V 2A (10W). The specs also say max output of 5V 1A (5W). It is nowhere near 100W. Customer rating of the seller is 99.1%. People expect to be lied to? I've been buying lots of stuff, both professionally and personally for many years and this has been a concerning trend. China is selling us childrens toys that contain lead paint and lead based solder in electronics. Laser pointers that can easily blind you labeled as safe at 5mW but really have no IR filter (to cut costs) so they output 50 to 150mW which people can't see and which can invisibly blind them. Electrical products that are not UL certified and are not safely designed (there are teardown channels on Youtube where they take apart products and they'll find AC powered stuff where the ground line is left hanging loose inside, not connected to anything). And our government lets this happen, has been letting this happen for decades. Ebay profits from it. No one is held accountable. What happened to law? Like Truth In Advertising? What happened to UL listing? What happened to fraud prevention? Our government is not fulfilling it's function. Crime is rampant and obvious. This is an obvious and serious failure of government. China is cheating US customers (and Chinese customers also apparently), and is poisoning and harming us. Seems like an absolutely real Chinese plot to attack democracy and it is working and our government is letting it happen. Why? Because "cheap stuff"? eBay profits? I think people see this kind of thing and think that there is no rule of law any more, which influences them and corrupts their behavior as well. Everybody is doing it, so they think they should also. Any thoughts about this? It seems to have been a gradual loosening of standards. It's happened across the business world, in government and in policing. The police won't investigate a crime unless it involves more than $10,000 or harms a person. Business advice for startups is to "fake it until you make it". Hospitals will charge people without insurance 20 times the normal price. Corporations considered fines for breaking the law the cost of doing business. Private equity "extracts value" by destroying companies. It seems like everyone has given up and corruption rules the day and everyone has to watch out for themselves. Are there just too many people now making the world too complex to oversee? Maybe these systems have never worked because they rely on most people complying and a lot of people now cheat? Maybe the internet/web makes it too easy to start a new company identity if reputation is lost? Have corporations captured government and hollowed out law? The level of lawlessness seems to have grown a lot; corporations, government departments, and police agencies all often just disregard demands from higher up for accountability and say they refuse to provide requested data. Go ahead and sue them and they'll pay the fine (years from now), continue doing it, and pass the costs on.