You know this meme about how everybody’s so pissed off about how bad the economy is? Is that right?

February 5th, 2016 at 3:06 pm

I heard the POTUS’s econo-press conference today where he went off on how the economy was like an aging dude working out after eating a double-bacon-cheese burger, or something like that. Anyway, he got a question about if the job market is really improving, including wage gains like those I featured today, why aren’t people feeling it?

I hear that a lot–it’s a fair question, and especially given the extent of inequality and its negative impact on long-term wage and income stagnation for many in the workforce, I’m not surprised by this sentiment. There’s a whole lot of reasonable economic expectations that haven’t been met for far too long.

But all that said, I’d expect the improvements that I and others have been documenting to make some difference in people’s and businesses’ sentiments about the economy, especially given cheap gas, low inflation, and the increasing buying power of at least some people’s paychecks.

Given the pervasiveness of this meme of dissatisfaction, you’d expect consumer and business confidence surveys to be in the tank, right?

Not so much, actually. I don’t have time for a deep dive and I just pulled these off of this very helpful website. It’s true that the trend in recent months has been pretty flat. And I’m sure you can find some version of this sort of thing that shows a more negative trend. But these figures of consumer sentiment do not look to me like they’re wholly disconnected from the improving job market. Most trends appear to have recovered from the Great Recession.

I don’t conclude for a moment that every one is feeling great, nor should they. There’s too much poverty, too much inequality, too much racism, too much violence, too many guns, too little mobility, and way, way too much political power concentrated in the hands of the few.

Speaking of politics–and President Obama made this point well–one wonders how much of this negative meme is a function of candidates for presidents whining about how horrible everything is, and how that’s the fault of [group you don’t like goes here].

Anyway, I’m not nearly so quick to believe the meme that nobody’s feelin’ the improving economy. I’d like to see more facts of the case.

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3 comments in reply to "You know this meme about how everybody’s so pissed off about how bad the economy is? Is that right?"

  1. Smith says:

    Confidence charts don’t inspire a lot of confidence, mostly reflecting current economic conditions. It would be valuable to have a chart showing an indicator that predicts trouble. Confidence falls leading to a recession? Doesn’t seem to be the case. Mostly they march together, just as one would expect. Average time between recessions? Not enough data points, but last four are 6 years (or ten if you mark from 1st of Reagan double dip), 10, 6, and where are we now? 6 years in and counting.

    Why are people not rejoicing over improved conditions? Well the banks got bailed out, people didn’t. Wall Street has record profits, main street, not so much. Credit debt is lower, but climbing again. Student debt remains. Millions who lost their homes are not suddenly once again home owners because the market bottomed out. Most of last year’s real wage growth relied on one time drop of inflation due to oil prices. Are the threats of globalization, downsizing, outsourcing, jobs going south to lower wage states or Mexico, or China, diminished? If your health care plan has a $6,000 deductible, do you feel that much more secure? Is the gig economy a rigged economy?

    What all the graphs show is that confidence stays high nearly up until the moment a recession hits and we’re due. Let’s hope the recovery lasts longer this time.


  2. Chris G says:

    > one wonders how much of this negative meme is a function of candidates for presidents whining about how horrible everything is…

    Probably a fair amount. Still, I look at the big picture and it’s a hard sell that things are peachy or headed forcefully in that direction.

    1) http://www.robustanalysis.net/todays-charts/
    2) http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealth-gaps-great-recession/
    3) http://www.bloombergview.com/articles/2016-01-26/free-trade-with-china-wasn-t-such-a-great-idea
    4) https://www.techdirt.com/articles/20160119/09463933377/more-realistic-modelling-tpps-effects-predicts-450000-us-jobs-lost-gdp-contraction.shtml


  3. Carl Weetabix says:

    My answer is because no matter how much we are paid, unlike prior, we all assume we are one paycheck away from being laid off and out on the street. There are a ton of us (white privileged males?) out there that remember a country that education, medicine, retirement, and a steady job were all pretty much guaranteed. You might not be driven around in a caddy, but a roof over the head and food on the table was a safe bet.

    Instead we are all just one market downturn, one medical condition, one outsource to China, from living on the street. We have no confidence, because there is nothing to have confidence over.


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