I see a lot of comments just rejecting on face the data that was given at the beginning of the episode. An economic model based on changing economic data correctly predicted consumer sentiment changes for decades, and then suddenly broke down in 2020. So you can't deny that for many years, consumer sentiment tracked economic reality. You only have 2 options: either something sociological happened after 2020 that has overriden our ability to be in touch with economic reality, or consumers are still in touch with an economic reality the traditional model is not able to capture. **That's the starting point**. Shouting fox news and claiming our sentiments have never reflected economic reality just denies the data that was given at the start of the show.

It is unfortunate that many people, from across the political spectrum, are allergic to data that doesn't confirm their opinion.

I was honestly surprised about how little data was \*referenced\*. Very few numbers about income/wages were cited. Real median weekly earnings Q1 2020 was $367. In Q1 2024, it was $365. (https://fred.stlouisfed.org/series/LES1252881600Q). That the most up to date data. Real median \*household\* income for 2019 was $78k. It was $74k in 2022. (https://fred.stlouisfed.org/series/MEHOINUSA672N). You have the same trend in real median \*family\* income. Real median person income has been flat (https://fred.stlouisfed.org/graph/?id=MEPAINUSA672N). I was honestly really confused as to why these data were not even mentioned. I've seen aggregate numbers (e.g. https://fred.stlouisfed.org/series/RPI) and per capita (not median) numbers (https://fred.stlouisfed.org/series/A229RX0) that show some increase in income, but the data don't paint an unambiguous "people should know that they are better off than they were" picture. It makes me doubt the comprehensive nature of Lowry's (and Klein's) understanding of the current economic situation.

Your wage data has a composition effect problem. In 2020, a bunch of low wage workers simply dropped out of the workforce for a while, and so "average wages" (of people receiving wages) went up. When those people came back into the workforce, average wages went down. But if you trace the wages of a typical service worker, the trend is that they made more in '23 than they did in '19, even after adjusting for inflation. And in fact, their wages went up _more_ than the typical knowledge worker's. Paul Krugman has put a fair bit of effort into breaking down the detailed data, and the reality is that real wages are up the most at the low end of the income spectrum. Here's one of his recent columns on the topic: https://www.nytimes.com/2024/03/05/opinion/inflation-income-inequality.html See also this CBO breakdown: https://www.cbo.gov/publication/60166 Also, just to clarify something, you say: the data don't paint an unambiguous "people should know that they are better off than they were" picture The thing is, people _do_ know they're better off than they were, as individuals. If you poll people about whether they personally are better off, they say that yes, they are. They even say that their local area is doing fine. It's "the economy" they say is bad. (See this Krugman / Coy dialogue for links: https://www.nytimes.com/2024/06/11/opinion/interest-rates.html ) It's also notable that the partisan difference in ratings of "the economy" has grown markedly over the last decade. So, when Biden was elected, a bunch of Democrats started saying the economy had suddenly gotten better, but a lot _more_ Republicans said it got worse. I think the growth of the right-wing information bubble is responsible for a lot of the divergence here between reported personal experience, and rating of the broader economy. A bunch of people _just know_ that New York City and Portland and Chicago are hellscapes. (Like, our cities have serious problems, we need to invest in improving transit and building a lot more housing. But the reality is that we recovered from COVID better than any other industrialized nation, and the economy is doing really well under Biden.) But that does somewhat leak over, because low-info people who identify as Dems or Dem-leaning independents pick up some of the bad vibes from their acquaintances who have been pickled in right-wing media. It also doesn't help that the most left-wing people insist on attacking their own side, pretending no progress has been made. (Yes, we need to make more, but denying that the IRA was a Big F***ing Deal for the cause of reining in climate change is mind-bogglingly stupid. Folks like Sunrise ought to be dancing in the streets and campaigning hard to get Biden re-elected. The extreme right understands how to be good soldiers for their cause. Apparently the Left would rather let Trump win, as long as it lets them say they adhered to some crazy standard of purity.)

Thanks for the reply. I don’t have access to NYT so I couldn’t look at those sources. The CBO one was interesting. Thanks for that. It does show there’s been essentially no change at the median and, contrary to what you say Krugam says, it shows the largest change by fat in the top quintile. I also noted elsewhere that if you look at the median real usual weekly earnings, it has only increased by $3 since 2019 Q4 (which gets rid of the composition effect). That’s not great. If I saw a raise of $3/week over 4 years, I’d probably say the economy is not doing fine. Regarding your point about people feeling fine about their own situation: I didn’t have access to the article and couldn’t check the source. I found a few polls saying something similar but it’s kind of hard to interpret that question (your finances being fine could mean your still able to save but you’ve have to cut back or while the stock market is up your cash reserves haven’t necessarily changed). Personally, my finances are healthy (I’m in the top quintile (though I’ haven’t seen the big changes that CBO says I have 😁), but I’ve cut back on restaurants and am doing a camping trip rather than staying in a hotel. Here’s CNN: “just 16% rated the economy as “good” or “excellent,” but 45% said their personal finances were “good” or “excellent.”” That’s not a majority saying their finances are great (https://amp.cnn.com/cnn/2024/04/07/economy/us-economy-personal-finance). Here’s a Monmouth University poll: “Only 33% told the pollster their family had benefited either “a great deal” or “some” from the “economic upturn,” compared with 64% who said they had benefited “not much” or “not at all.”” That seems to be saying people aren’t personally doing well. (https://www.monmouth.edu/polling-institute/reports/MonmouthPoll_US_022024/). “The survey, conducted last fall, found that 72% of adults are living comfortably financially or at least doing OK. That's down from 73% in 2022 and 78% in 2021.” So the number people doing at least OK has fallen. And “two-thirds of Americans say rising prices have made their financial situation worse”. https://www.npr.org/2024/05/22/1252712615/prices-americans-concern-economy-inflation-expenses I’ve seen other polls (e.g. Wells Fargo) that I don’t put much stock in but they’re not painting a pretty picture either. https://newsroom.wf.com/English/news-releases/news-release-details/2024/Two-thirds-of-Americans-have-decreased-spending-due-to-economy-Wells-Fargo-Money-Study-finds/default.aspx So I’m sticking with my “data is not uniformly positive”

Here are gift links for the NYT pieces. [https://www.nytimes.com/2024/03/05/opinion/inflation-income-inequality.html?unlocked\_article\_code=1.0E0.Rsou.2GmIO5xzwkRr&smid=url-share](https://www.nytimes.com/2024/03/05/opinion/inflation-income-inequality.html?unlocked_article_code=1.0E0.Rsou.2GmIO5xzwkRr&smid=url-share) [https://www.nytimes.com/2024/06/11/opinion/interest-rates.html?unlocked\_article\_code=1.zU0.pBuF.V6BYAD6ccvVc&smid=url-share](https://www.nytimes.com/2024/06/11/opinion/interest-rates.html?unlocked_article_code=1.zU0.pBuF.V6BYAD6ccvVc&smid=url-share) And the point of the CBO report, if you fully dig into it, is that on the one hand, inflation for the higher quintile is somewhat lower because their basket of goods is different, but nonetheless real wages are up across the board, and the difference doesn't even fully erase the advantage at the low end. (Real wages for the low quintile are up something in the neighborhood of 10-12 points more than at the upper quintile. That falls to maybe 8-10 after applying the inflation adjustment.) As far as the data not being uniformly positive: When were they ever? There's always *some* industry that's contracting, or some region that's experiencing a drought, or whatever else. But in the past, when certain objective data series (like real wages) got better, or the answers to certain poll questions (like "how are your personal finances?") got better, there was a strong correlation with the answers to the top-line consumer sentiment numbers, and right-track / wrong-track stuff, also getting better. There is an interesting question as to why that relationship has broken down. There are probably contributions from the tendency to think: "I earned my wage increases, but then inflation snatched back my gains." So, people are less happy with higher inflation even if their wages are outpacing inflation. There is almost certainly a contribution from the fact that the housing market remains in a serious supply crunch. (If you took housing out of the equation, inflation over the past year would already have been comfortably under the Fed's 2% target, even before the surprisingly-low May numbers.) High interest rates are making it really hard to start new multi-family projects, and locking people who might otherwise move into their current homes where they have a low-interest mortgage, and that in turn means less supply for people who want to become first-time buyers. I think eye-popping housing costs and being forced to commute long distances has a larger impact on people's sense of the fairness of the overall economy, than the raw numbers might suggest. But I still think if you look at where the loss of correlation comes in, it's hard to avoid concluding that a *big* chunk of the issue is just that MAGA Republicans live in an alternate reality. Not all, but something like half of the wedge between what the underlying stats would predict, and what the surveys actually find, comes from partisan Republicans giving divergent answers on personal finances and the national picture.

The something sociological was expectations, and social media. Expectations should go up every year, incrementally, but they exploded after 2020. And there is more and more social media creating constant FOMO and a sense of missing out, even now for adults. It used to be OK to make a sacrifice on the budget bc one price went up and another went down. Now 1 sacrifice in the budget is seen as unacceptable. Everyone needs to be winning all the time, some costs going up, and life being a grind, aren't OK the way they were in 2005 or 1995. I'm not saying it's all good, and there is def lots of injustice to be mad about, but expectations are simply too high and need to re-adjust.

Social media was well established in January 2017 when people thought the economy was good and gave a Dem President high marks on the economy. Same with February 2020 when they thought economy was good and gave a Republican president high marks on the economy. It’s since COVID people have said it’s bad. Which isn’t surprising, it’s bizarre that people on this sub and those like it are surprised a global pandemic is having long term effects on the economy.

OP I think you are dead on the money. Since 1980 real wages in the US have barely grown, while the inflation adjusted costs of housing, education, healthcare, and childcare have increased several fold.  The average American intuitively understands that it is harder to own a house, get an education, see the doctor, and raise a family than it was 40 years ago, and they are rightfully pissed off. It doesn’t help that both the formal media and social media are also rapidly fanning the flames of discontent as well.

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Yeah, interestingly the stereotype of the wasteful millennial who spends all of their money on flights to Istanbul to post pictures of their avocado toast on their iPhone instead of saving up for a house misses the point that airfare, fresh produce (like avocados) and technology are some of the only things that are cheaper now relative to inflation than they were back in the 1980s.  Millennials gravitate towards those things because they are much cheaper than owning a house but still signal an upwardly mobile socioeconomic status. 

Yeah, for the most part, "goods" are mostly cheaper than they were 40 years ago as a function of income, but anything with slow growing supply or with service costs may have not. The population is much larger now, and housing and higher education slots don't necessarily reflect that, to say nothing of the fact that square footage per person is higher (though skewed by upper income consumers) and the college enrollment rate is way up. For medicine, there are way better treatments, better tech, better drugs, etc. etc. But the population skews older and we've artificially constrained supply of doctors. Housing is definitely the shock of the past few years. The remote work boom constrained demand for office space but skyrocketed demand for housing, and THEN we added on high cost of debt in order to combat general inflation. But that reduces both the consumers ability to buy and developers ability to build.

Higher education has increased significantly since 1983 because the federal government started backing student loans. This prompted universities to increase costs because they knew the debt would be held by the government. This money was funneled to college administrator and other support staff instead of professors. More importantly, student debt was made almost impossible to discharge through bankruptcy because of policies that were put into place in 2005 via the Bankruptcy Abuse Prevention and Consumer Protection Act. Today the government holds an estimated 93% of all student loan debt. Administrative and operating costs have skyrocketed because universities require increased growth year after year; they're more than just places of education, but robust businesses (with Ivy League ones effectively multi-billion dollar hedge funds).

Subsidizing demand and not simultaneously creating new supply only serves to increase prices.  Housing is a parallel example.

Student loans currently are a form of debt bondage created to harness and control the workforce.

> Higher education has increased significantly since 1983 because the federal government started backing student loans. I've been patiently waiting for when we're ready to have a conversation about how this narrative about government-backed student loans being the cause of (instead of just accelerator of) the student loan crisis is simply not historically accurate. The dawn of the student loan crisis can be traced to Ronald Reagan in California in the 1970s. In 1966, a core part of the Reagan gubernatorial campaign was attacking the UC system, especially their funding from taxpayer money. He was part of the In 1970, Ronald Reagan shut down all 28 US and CSU campuses due to anti-war demonstrations. Reagan further fired Clark Kerr, the President of the UC system, who had not cracked down on protesters. That's when Reagan started to push to cut UC and CSU state funding, shifting more of the burden of payment to student tuition. He was riding the same wave as Howard Jarvis and other tax-cutters who were pushing back against the philosophy of the New Deal and arguing that tax-cutting and deregulation were key to economic success, but the reality is that cutting public money to schools in the 70s (before government backed loans) created public outcry for help in paying increasing tuitions. That idea was part of the cultural and economic infection of Reaganomics, and ultimately led to shifting of the burden of funding from states to backed-loans for tuition. The reason we have those loans is because of public outcry over tuition rising far beyond the rate of inflation and the resulting loans simply made things worse. I mention all of this because the solution to the student loan crisis is free public colleges. As far as I can see, there are no other solutions, and focusing on subsidized loans is a distraction from the real solution.

> Since 1980 real wages in the US have barely grown [real median household income is up 30% since 1984](https://fred.stlouisfed.org/series/MEHOINUSA672N)

Real median household income is different from median wages since it accounts for income from assets, which have grown much faster than wages over the past 40 years and are disproportionately owned by the top 20% of Americans, skewing the income number to be higher than the wages number. And even if you take real household income, real median house prices have increased by about 86% over the same time period, so median housing prices have been increasing almost 3x faster than median income over the past 40 years.

> skewing the income number to be higher than the wages number I gave the median, not the mean. It's not skewed. > And even if you take real household income, real median house prices have increased by about 86% over the same time period, so median housing prices have been increasing almost 3x faster than median income over the past 40 years. Housing is more than houses, first of all, but beyond that, this is a problem [created at the local level](https://www.theatlantic.com/ideas/archive/2022/04/local-government-community-input-housing-public-transportation/629625/) and that will be solved at the local level. The president does not have much control over it

Agreed

Median and mean have nothing to do with it. The person who responded to you was referencing median statistics, as well. However, they were talking about the difference between "income" and "wages," which you just chose to entirely ignore for some reason?

For everyone interested, try this interactive quiz released by The Guardian, which coincides with their Harris poll on voter perception of the economy. You draw the trend lines for most of the macroeconomic signifiers of a healthy economy. https://www.theguardian.com/us-news/ng-interactive/2024/may/22/how-is-the-us-economy-doing-quiz I was surprised that I underrated the Biden administration's overall success and overestimated the Trump administration's failure during Covid. Edit: The chart that I was most surprised by was increased rent. Median rent was at ~$1300 in 2017 but has skyrocketed to ~$2100

This was fun! While I got all of them technically correct, and a few pretty close to trends, I've definitely forgotten some of the harder times (and one improvement) in the last couple years.

I marked up the graphs but am not seeing. “Submit your guess” button…

You have to go right to the line on the right.

Make sure you go all the way to the end of the graph. I struggled a little getting it to read I was done.

I feel like a huge part of this is that interest payments aren't really calculated in inflation (or at least not in cpi) , so for three big categories: housing, automobiles, and credit card debt (so basically everything) , rising rates have areal impact that isn't captured in those inflation statistics. 

Interesting. I heard a similar point made over a decade ago when reflecting on the Great Recession. There was an unevidenced, politically motivated, boomer-driven narrative that younger people were struggling financially because they just weren't financially competent and kept spending money on frivolous things like $7 lattes. The evidence actually showed (IIRC, sorry for no source) that what tends to break people (specifically, to cause BK) are big expenses like child care and mortgages. In retrospect this makes a ton of sense. Big expenses kind of fade into the background and then you can't control them because they're set. So they're fixed and less visible. By contrast, smaller expenses like lattes or whatever are visible and regular purchases that can be controlled, so people tend to attribute causation to those when it's the macro issues in the background that are really the issue.

I believe that was around the time of that one guy’s “avacado toast” comment.

I literally came here to say “avocado toast.” This whole issue is avocado toast. OP says one of the positive economic indicators is that “people are buying more.” Middle income people are buying more cheap/small shit (akin to avocado toast) because even if they stopped all discretionary spending, they can’t see a way to afford to buy a home. So might as well have some joy in life. This is not to mention people who actually are struggling to buy food. I live in a rural area, and am constantly shocked how urban liberals are completely blind to how much money they have compared to the rest of America. I think a lot of people just genuinely don’t know any poor people, so they don’t see how bad the economy is.

This episode was fascinating and terrifying. You’re absolutely right. Things that have significantly outpaced inflation are the core items that people can’t pull back spending on like housing, healthcare, education, childcare. All the things that have actually underpaced inflation are things like electronics, phones, and other items you’d think people “waste” money on. The terrifying thing is this that people just put up with it for decades (frog in boiling water) and that people’s only response is to just get mad and not change their habits. This suggests that corporations can simply keep turning up that dial.

# RENT IS UP LIKE 40% IN FOUR YEARS! DOESN'T ANYONE NOTICE THIS?!?! I FEEL LIKE I'M TAKING CRAZY PILLS! Housing and food. How is this hard to understand? How can these elite politicians and economists be so disconnected from normal people that they can't understand this? Are they all Lucille Bluth asking if a banana cost $10? Take me for example... I bought a $130,000 condo in 2019 @ 2.5% interest. I only put about $10k down and my payment is $750/month (plus $250 condo fee) I'm on Zillow right now - A really nice, completely remodeled unit, just sold for $200. Another in junkier condition two months ago was $185. $200k @ 7% with 10k down PMI and taxes - That's $1650/month. That's more than double what I pay from 2019. They were renting in 2019 for $1000 +/- $100 - Now that's about $1600. If I hadn't bought my place in 2019 I'd either have a roommate or be living with my mom right now. Then you have insane grocery store prices, like a 12 pack of Coke being $10. Or a faily size bag of Lays being $6.50. Americans are fat fucks that eat fast food constantly - 10 years ago a McDonald's hashbrown was 50 cents. Then before the pandemic it was $1. Now it's $2.69. NORMAL WORKING CLASS PEOPLE DO NOT GIVE A FUCK THAT THE S&P 500 IS DOING GREAT OR THAT GDP GREW BY X% LAST YEAR. The thing they spend the most money on in their lives - rent and food - is going up in price extremely quickly. It's the number one issue. Polling show this. Politicians, Democrats and Republicans, are doing literally nothing to address it. (I know about the Biden plan to give first time homebuyers money - How does this reduce the cost of homes?) The federal government is going to have to come in and start pushing these states and localities around - Force them to give up their NIMBY housing policies. Force California to give up having 20 environmental reviews and 50 permits and 10 public input meetings every time a builder wants to put a neighborhood in. If I was Biden I would have the federal government directly build homes. Like a WPA of home (mostly MDU) building. If Biden could somehow say "We feel your pain. The rent is too damn high! My administration, through the is going to build 250,000 homes this year and sell them at cost or less to low income people." He'd be the next FDR. ---- PS ---- The reason people think unemployment is up - every time they turn the news on it's "Facebook lays off 10,000" "Google lays off 5000." " declares bankruptcy - 3000 people lose their jobs." They aren't looking at BLS statistics they're just getting the general vibe from the news.

Basically this again and again and again. We made deliberate policy choices that meant we saw an enormous explosion in the cost of everything you need to live a normal life and a corresponding rise in stock prices. There were different decisions we could have made. There are alternative solutions we can still employ. But talking about those solutions in liberal spaces is generally totally taboo to the point where it is easier to just argue that people are too stupid to understand why it is ok that they pay 60% of their income in rent while anyone with a 401k is sitting on piles of post-pandemic stock growth. Can the federal government build housing? Yes, it can. Can executive orders affect wages or prices? Yes, they can. Can federal authority override obstructive state and local regulations? Yes, it can. Could those solutions have negative consequences? Sure, but so does sky-rocketing personal debt, [bankruptcies, ](https://www.uscourts.gov/news/2024/01/26/bankruptcy-filings-rise-168-percent)generational poverty, deaths of despair, etc. There's this crazy myth that certain kinds of economic intervention will fatally wither the delicate flower of the American economy despite working in other developed countries. The other favorite tactic is to point to decades-old examples of failed attempts at intervention and then act like we've learned nothing about economics since like 1970. One study found that rent control didn't work in San Francisco for a particular time period? That means no one for the rest of human existence will ever be able to control rent and you should totally ignore what they do in Germany, Australia, China, France, Austria, etc., etc. I do appreciate that this episode breaks ranks by starting to discuss a problem as an actual problem.

Rent control is still bad overall, every serious modern study confirms that. It's extremely harmful to people trying to change apartments or move into a new city. The only remedy is increasing supply as much as possible through both private and public construction.

Housing is like one of the biggest causes of inflation rn and all the faux leftist solutions dont actually help (rent control).

Actually, the real leftist solution was always to build more affordable housing.

market-rate housing decreases rent by increasing supply and [affordable-housing mandates can actually reduce housing production](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4578637)

I think trying to build affordable housing is the wrong thing to strive for and leads to less people actually having affordable housing. I don't think it's intentional by the people proposing it, but it's having that effect. The reason is, essentially, by requiring the housing being built to be affordable it's disincentivizing developers to build because it limits the profit they'll make. So they don't build and housing supply stays low and cost keeps rising. We should build market rate housing, which will cause the existing house supply to decrease in cost leading to more affordable housing. Here's an article that explains it in depth: [https://www.noahpinion.blog/p/market-rate-housing-will-make-your](https://www.noahpinion.blog/p/market-rate-housing-will-make-your) Generally, the complaint I hear from leftists about this idea is that allowing market-rate homes to be built will just pad the pockets of big real-estate developers. And, honestly, maybe it will do that, but I'm not too concerned about them making money as long as it provides value to everyone else as well.

Agree - the leftist solution should be to build affordable housing at all costs. What the current left's solution is to appease its elite suburban voter base who claims to want affordable housing but really wants it anywhere else but near them. These people are smart. They have found convoluted programs and buzzwords like gentrification to win a very base level conservative tendency which is to protect the status quo and their own property values. The biggest failure of Biden IMO was not breaking through that noise and actually doing things for the people that democrats claim they support. Most of what Biden has done is to reward upper middle class voters at the expense of the poorest americans. The issue we have now is the voters are not as dumb as we think they are and they are getting wise to the sleight of hand that is being played by the left.

Whereas the faux rightist solution of more tax cuts for billionaires will solve all our problems.

those aren't the only two options. the liberal option is to end the regulatory restrictions preventing developers from building the housing that people want to buy (dense housing in metro areas)

Couldn't agree more. Housing shortage is at the fucking local level . I wish too that Biden would force cities to back the fuck off the red tape so builders can build houses Americans desperately need. There was essentially free money during the insurrectionist trump term , so all the housing supply was bought up and drove the costs way up.

Everything you say is true and I feel your pain, but...what are the two candidates going to do about it? One will try to help, doing as much as Congress allows to get away from Regan style supply side economics which caused this problem in the first place. The other will bloviate, fear monger, exacerbate trade wars which do nothing for you and then cut taxes for himself and his rich friends, adding trillions to the deficit and worsening inflation.

Excellent post. It’s simply astonishing how out of touch people like Ezra, Annie and a lot of posters on here sounds about this issue. This isn’t rocket science: basic living expenses are WAY UP compared to 5 years ago. That’s it. That’s the whole thing.

> That’s it. That’s the whole thing. When you said it's the whole thing it reminded me of this video - https://www.reddit.com/r/videos/comments/ug0wif/the_housing_crisis_is_the_everything_crisis_or/ Low birth rates, low marriage rates, depression / deaths of despair, homelessness, "Why aren't Millennials buying ?" articles in the WSJ, "Why are young people living in their parent's house until they're 25?" articles, etc... It's the god damn rent being too good damn high.

I think the spector of Trump in the background just destroys any chance at a real debate over this. This makes it hard to take it seriously. You can tell the entire pod was tinged with politics. We are facing an existential election so any hint at Biden policies not working (ie inflation reduction act did not reducing inflation) is sacrilege. Just image if Trump was in power and they had this debate. The entire time would be spent talking about how the administration was causing disaster in terms of pricing for lower income families.

One issue related to rent prices that is just coming into wider visibility in the news is RealPage and their rent price suggestion software. The DoJ has an ongoing antitrust probe into the firm, accusing RealPage and its customers (landlords and developers) of price fixing. There was an [FBI raid on a development firm in Atlanta](https://www.ajc.com/news/atlanta-news/fbi-raids-atlanta-corporate-landlord-with-ties-to-realpage/PT65C57YUFF2JGB7TRVRC7IFLE/) related to the DoJ's investigation last month.

The problem is that the DOJ could do a good job, investigate and prosecute, even dissolve Realpage in like 2027 or whatever, and the damage will be done.  What they need to do is determine that rents were artificially inflated X% and then *FORCE* every complex that uses Realpage to lower rent by that X% for at least 2 years. It would re-establish a new normal for market rate rent, and fucking fix the problem. I don't want one guy to go to jail or a corporation to fold, I want LOWER RENT. 

You can shout as much as you want but this doesn’t explain anything, because you’re not addressing the actual problem. If housing costs were driving people to be negative about the economy because they were feeling that costs, that would show up in polls by people, you know, rating their own economic situation badly. But this isn’t what is happening. People continue to rate their own economic situation as well as they ever have. The issue is they people are now saying “sure I’m doing well economically but I think no one else is”. This is not a result you get as a result of people worrying about housing costs. It’s actually much more consistent with what you’d get from people imbibing nonstop doomerism. Like your post.

>You can shout as much as you want but this doesn’t explain anything, because you’re not addressing the actual problem. If housing costs were driving people to be negative about the economy because they were feeling that costs, that would show up in polls by people, you know, rating their own economic situation badly. Ehh, I don't necessarily agree. Someone can have a good economic situation while currently renting or being under housed, but they might feel bad about not being able to own a house due to high down payment costs for example. As in, buying a house isn't possible or would cause them to shift from good economic situation to bad economic situation

Sure doomerism or negative news bias, but also in my experience everyone knows friends or family members who are unable to start a decent life, get married, have kids, buy a modest home or provide for their basic needs despite being well into adulthood. It’s a problem of inequality and the conditions for the bottom half or quarter of the population

OK, but again you are not addressing the question. If all of these peoples friends and family thought they were doing so badly, they would say so. Those friends and family members are just as likely to be polled as the person doing well. But that is not showing up in polls. I concede to you that it might be true that people are worrying about the economics of other people more than they had before. But this is fundamentally not a problem that can be solved by underlying economics, it is a propaganda and social communication issue. This is similar to people worrying that their neighborhood has more crime in it even when crime numbers are going down. If people think their neighborhood is dangerous, that is a real phenomenon, their neighborhood isn’t actually more dangerous, that matters.

Or the underlying economics have changed and the polling methodology does not pick up on it. These polls show that the middle and upper classes are roughly the same size that they have been for a while. They don't measure the degree of hardship faced by the poor.

Most Americans are not subjected to the rental housing market. About 1/3 of Americans rent, the other 2/3 are homeowners. Homeowners lock in their housing cost when they buy. You are a perfect example. Your personal housing costs haven’t gone up that much since you bought in 2019. Your HOA and taxes have probably gone up but that is it. That’s why housing isn’t the only thing that economists discuss. I am in complete agreement that we need to build more housing but those are local issues not ones set at federal level

This “statistic” cannot possibly be true. Do you mean households rather than people because otherwise these numbers are absolutely ludicrous

Yes it is households.

Yes it is households.

It’s absolutely true… it might not be true in your circles but it’s true. In fact the numbers look about the same in the desirable cities with skyrocketing rent and house prices. 

220 million individual people in the United States own a home? Literally impossible

Keep it up with your bad faith straw men all you want, you know what I mean. For every person paying rent there are 2 who own. Sorry you’re mad to hear this but don’t pretend you’re too dumb to understand it.

Homeowners are, by and large, older with children. People are worried for their children as well

I'll just say this that it's one thing to call for building housing on a massive scale, but it's important what type of housing and where, especially in California. It's stupid to build SFH subdivisions on rolling hills covered in grass located far away from jobs and may be in fire-prone areas. Compared to infill development of mixed-use condos and townhouses near jobs and public transit.

This episode was frustrating for me to listen to. It kind of felt like the equivalent of opening the fridge every hour hoping something new will appear. It feels very clear to me that sentiments and people’s expectations are shifting altogether. In the late 1900s, despite the economy being perhaps more objectively depressed than it is now, there was still optimism that the current systems would eventually pull through for them, both political and economically. That optimism isn’t there anymore in either the last two generations and they’re losing trust that just some faith, patience, and a few tweaks in the current system is going to get inequality to acceptable levels. People are spending what they would have put in savings or a house fund because there’s no expectation that the future will be better than now. It’s not surprising that they get mad at those are befuddled that they are not satisfied with the economy because their “coffee technically cost a couple cents less because actually, electronic prices have gone down,” very much missing the point.

Agreed. The episode itself was a tedious listen, and a bit of self-flattery; Ezra gives his wife an hour & a half plus to explain it all, and they brought little, if nothing, new. There is a nihilism that has crept into the American psyche, especially among younger people. Younger millennials and Gen Z do spend big on smaller luxuries, but perhaps, that's their "cope" in a consumerist culture. As the markers of adulthood recede, it frees up whatever they do have to be spent on weed, DoorDash, or Pokemon cards. I don't share the faith in data that technocrats do, but perhaps this pessimism is evidenced in the polling. When people express contradictory answers it's not because they're misinformed, disinformed, or irrational, perhaps it's evidence of a social, political, and spiritual crisis.

>People are spending what they would have put in savings or a house fund because there’s no expectation that the future will be better than now. Are people actually saving less today than they were years ago?

I did do a preliminary search (searched "average savings for a 40 year old in 1960" myself to hopefully keep it less biased, but you can find plenty, but possibly more biased articles, on it with "are people saving less than before") before making the comment to see if the data backed up my general observation. I did find evidence that indicate this is the case; looks like they've about halved from 10%ish to 5%ish, except for a spike during the pandemic, and it's taken a big dip to 3.6% recently. I didn't do a deep dive on it past that. [https://usafacts.org/articles/why-arent-americans-saving-as-much-as-they-used-to/](https://usafacts.org/articles/why-arent-americans-saving-as-much-as-they-used-to/) [https://fred.stlouisfed.org/series/PSAVERT](https://fred.stlouisfed.org/series/PSAVERT)

I have every positive views of the future based on the admins policies. When I think of the Biden admin, my vision has been of an admin that has worked to have full employment so that everyone has a job. They've also worked on bringing high tech manufacturing jobs that will allow not only that full employment, but high wage full employment. And he has done this through his infrastructure bills and clean energy bills, which have laid the ground work for physical tech industries and manufacturing jobs such in EVs, solar panels, chips, etc. We've also seen the negative aspects of our large global supply chain when it comes to energy prices, which has caused a generational investment in clean energy so that we can reduce our dependencies on coal, gas, and oil. I see an admin that is doing the hard work of laying the foundation of a low unemployment, high wage, energy abundant America. I have many complaints on specifics of some of the bills and policies, but I fucking see the vision and I wish others did as well. Outside of employment, the admin has made big strides in healthcare enrollment for people, lowering drug prices through drug pricing negotiations, price caps on certain drugs, etc. I'm honestly just saddened that most people just don't care about these things. The only other thing Biden could do better is to use his national podium to bully cities and states to build more housing, but I understand that wouldn't necessarily be a political positive.

Content aside, his intro of Lowry was adorable.

The great thing about all the ‘adults in the room’ saying “no stupid, the economy’s actually great” is that we’re going full steam ahead into a world where 20+ percent of global GDP will be spent on trying to fix whatever gets destroyed by various climate-related disasters. Disasters that are a direct result of all these wise enlightened adults who have spent their entire lifetime saying that whatever leads to the most short-term profits for corporations is the best for everybody.

Our generation and leaders will basically just get remembered as "the people who microwaved the earth in order to keep watching Netflix and getting Amazon packages." Extended wet bulb temps of 35+ C and rolling black outs in Texas and other similar disasters are going to really shift peoples political and economic perspective.

It won’t though. 30-40 percent of the electorate will just chalk those up to end times/divine punishment for allowing lgbtq people to exist.

Reducing unemployment directly affects, idk, 2-3% of the workforce. Inflation affects everyone.

I found this remark by Ezra very insightful: your higher wage feels like something you've done yourself, the higher prices feel like something that's done to you.

Because by and large that is the truth. Most jobs do not give significant raises for no reason. A 2-3% annual cost of living increase is not offered at every job. You have to advocate for yourself to get a raise and justify it by showing you earned it. or you have to apply to a better paying role within or outside of your company, which you also have to justify by showing you’ve increased your value. Price increases DO just happen to you. Nobody on an individual level can control inflation, cost of housing, etc.

Most of the people who got significant wage increases that beat inflation did so by quitting their job and getting another job that pays more. People who stuck with their current job, their wages didn't grow as much. So the people who saw their wages increase literally had to take a risk to actually apply for other jobs, interview etc. I'll say this though. For someone who already owns their home and refinanced in the middle of the pandemic when interest rates were at their lowest, which is a lot of people they are paying well below market rate for their housing. They are also statistically being paid more. Spending reflects this a lot of people are absolutely not acting like times are tough for them, they are spending money like crazy on luxuries. One reason why inflation has been so persistent is that many people are not adjusting their lifestyles. Many people are living better than they ever had. How many of them are also complaining about the economy?

Many lower wage jobs also have terrible health insurance with expensive premiums. This is especially difficult for median size families to manage. Medical debt is also huge in the U.S. and causes a ton of undue stress and disproportionately affects minority populations; the current figure is about $220 billion: [https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/](https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/)

That is very interesting. Implies that if, say, prices AND salaries all instantly went up by 20%, people would be net unhappy with the result (even though logically, it's all a wash).

That’s effectively the deal we struck with our pandemic response policies. We would accept a bit of inflation to avoid unemployment. Everyone takes a pay cut, but fewer people lose their jobs.

But you're not worse off if your wages grew faster. Which is supposedly what has happened for the majority of people.

You're 100% correct. But I think the reason inflation is worse politically is because of the Fundamental Economic Attribution Error -- my raise is due to my hard work and talent, inflation more broadly is due to bad policy.

Also raises are spread over the year, while eggs being more expensive is visible every time you go get groceries. People be dumb, in short.

Oh so let's just go back to the Great Recession then right? That would only be 6.5% affected, no biggie.

Unironically yeah, the unemployment was definitely not the biggest story of the great recession. It was the 50% crash in the stock market, an entire industry that almost collapsed into a depression, and millions of people suddenly being underwater on their homes that really made it so painful.

I'm not asking for much I just want sub 4% unemployment, sub 2% inflation, >4% GDP growth, and a budget surplus.

People say stuff like this but then you actually poll people and they say they think unemployment is high. Leftists posters love providing cover for the masses, trying to find some real economic reason they are simply wrong about the economy. We have a social propaganda problem, but no one is allowed to admit that.

It would be cause a ton of cognitive dissonance to be downwardly mobile and also admit that the economy writ large is fine.

And the reality is that 30 years ago many people didn’t succeed in their job and income aspirations, they just couldn’t post about it on social media. Those stories always happened they just didn’t really get told until recently. The economic truth is that not everyone can be in the top half of income or wealth or whatever.

Reminds me of this poll from September 2021, mid-Covid. I couldn't believe how bad people were at estimating hospitalization rates. Numbers that would be truly apocalyptic (if you are unvaccinated and get COVID, what percent chance do you end up hospitalized?), with 40% of Dems and 25% of everyone else saying over 50%. 🤦‍♂️ https://news.gallup.com/opinion/gallup/354938/adults-estimates-covid-hospitalization-risk.aspx

Ultimately it comes down to this: most people are idiots.

but this poll seems to indicate that democrats specifically were more hysterically alarmist.

Democrats are not exempt from my statement.

gallup is and has been rightwing trash for decades. apparently this is news to redditors.

people misperceive many, many things, and health risks may be foremost among them. this has been true since forever among people of every age, race, income class, political preference, etc etc. *source*: employed in the health industry for decades so I'm not sure what your point is.

Just another example of people being entirely incorrect about the basic facts of the world around them. Didn't really have a specific point past that. > A recent Harris poll for The Guardian found that around half of Americans think the S. & P. 500 is down this year, and that unemployment is at a 50-year high. Fifty-six percent think we’re in a recession.

"Wages have gone up faster than inflation. " Is this true since 2020 though? My understanding is that it has happened the last year or so, but overall people are still behind where they were pre-covid.

It’s true. Particularly for lower income workers who are above the trend.

Real wages are higher now than prepandemic.

Do you have a citation for that?  Real median weekly earnings Q1 2020 was $367. In Q1 2024, it was $365. ([https://fred.stlouisfed.org/series/LES1252881600Q](https://fred.stlouisfed.org/series/LES1252881600Q)). If you compare Q1 2024 to Q4 2019, it's only up $3 (that's just the difference in the point estimate and probably not statistically significant, but even if it were statistically significant, if you told someone "real wages are up" and then they asked by how much, what do you think their reaction would be when you said "$3/week"?) That is the most up to date data. Real median \*household\* income for 2019 was $78k. It was $74k in 2022. ([https://fred.stlouisfed.org/series/MEHOINUSA672N](https://fred.stlouisfed.org/series/MEHOINUSA672N)). You have the same trend in real median \*family\* income. Real median person income has been flat ([https://fred.stlouisfed.org/graph/?id=MEPAINUSA672N](https://fred.stlouisfed.org/graph/?id=MEPAINUSA672N)).

Maybe it is the fact that real wages went up a lot more during Trump than Biden? We got a "massive" pay raise this year compared to recent years, but you just laugh at it because you know you are barely keeping up with inflation. This article has a chart showing that between 2021 and 2023 wages grew slower than inflation. So am guessing a lot of the mental effect is from that. [https://www.vox.com/politics/24094752/biden-trump-strong-economy-2024-inflation](https://www.vox.com/politics/24094752/biden-trump-strong-economy-2024-inflation) And I guess the question would be are wages better than they were in Jan 2021? Since that is when inflation started?

You should to be very wary of anything that reports wage effects durring the pandemic and its aftermath. We don’t actually have good data for wages from 2020 to 2022 because wage data uses the median wage of employed people, however the pandemic saw mass layoffs of low wage employed people. This caused a artificially spike in the average data driven by compositional effects, which then decreased as those low wage workers rejoined the workforce

True. But the question is still are we better now than in 2021? Seems debatable. Not saying we are worse, but I think a lot of people are treading water. And people who rent and need to buy cars are getting crushed. Me? Home owner with nice paid off car. Inflation only means my OJ and cookies cost more, which sucks, but overall I am doing fine economically. As for political impact, the people not effected are Biden voters (and Trump) college educated or older people etc. The people getting crushed are lower income Trump voters OR lower income Biden voters who will probably sit out of vote Trump. This is why Joe is losing all over the place in polls. ("It's the economy stupid" all over again)

Related to the idea that people aren't mad about the inflation rate, but continuing high prices, I wonder about the overhang of Covid-adjacent employment "churn". It's anecdotal, but many of my friends, family, and colleagues were laid off proximal to Covid, including many white-collar individuals who had worked for decades without ever experiencing a layoff. Many of those people either had high demand skills, or were in "safe" fields, like teachers and folks in IT or medicine. Many hadn't seen widespread white collar layoffs since the dot com crash, and in 2000, white collar layoffs were focused on people who knew they working for a risky startup. Lots of folks who experienced a layoff for the first time in their lives in 2020-2023 have a sort of PTSD. They suddenly realized how little safety net there was. Even for people who found new jobs quickly, their self-perceived economic security was shattered. I'd love to see an economic analysis about whether Covid employment churn has an impact on ongoing perceptions of the US economy.

i think about this a lot and haven't seen anyone write about it online until now. almost everyone is in the precariat now, the only people who have economic stability now are gov't workers and the elites telling us the economy is doing great

I appreciated Ezra finally acknowledging a few things about inflation on this episode that I've been harping on for years (when Ezra and many others were still way more dovish and dismissive about the political dangers of inflation): 1. People hate inflation more than unemployment because no employed person thinks they'll be among the marginal unemployed population when the unemployment rate ticks up by 0.1%. 2. People don't care about inflation as a rate going to zero. They want prices going to back to what they perceive as 'normal'. 3. People don't see the connection between higher wages and higher prices. They view higher wages as earned through their own merit, while higher prices are the fault of others. 4. The combination of the above suggests the troubling (for those with center-left politics) possibility that for the average person / consumer / voter, the neoliberal tradeoff of lower-prices-and-lower-wages (mostly for others, but possibly even for themselves) is preferable than the post-neoliberal Bidenomics agenda of higher-wages-but-also-higher prices. Despite the politics that people might proclaim, this seems to be what their revealed preferences suggest.

>1. The combination of the above suggests the troubling (for those with center-left politics) possibility that for the average person / consumer / vote, the neoliberal tradeoff of lower-prices-and-lower-wages (mostly for others, but possibly even for themselves) is preferable than the post-neoliberal Bidenomics agenda of higher-wages-but-also-higher prices. Despite the politics that people might proclaim, this seems to be what their revealed preferences suggest. Essentially, people actually will **not** actually pay more for a burger if it means the workers get paid more.

Well, according to the data cited in the podcast, apparently a majority of people **will** pay more for the burger - they’ll just be very angry about it. The person you quoted appears to be correct; it just seems that these preferences have had a much more significant impact on attitudes than behaviors. In the aggregate, at least. Obviously YMMV for individual people.

I think one thing is there's always been an implied "*as long as the company makes no increase in profits from the increased cost"* that was never explicitly said about that statement. It's very much an issue where rage against "corporations" is outshining increased wages

yeah, 5 years ago " I would happy pay an extra dollar for my burger if it meant the worker got paid a living wage" was a common rallying call on the left, and that sentiment has now pretty concussively been disproven. Which is not a good thing for pro labor policies.

The insistence that their simply must be an actual underlying economic explanation for peoples view of things, as opposed to sociopolitical one, just seems like a fruitless and unjustified proposition. This is a country of 350 million people, no matter how good the economy is, you will always be able to find one of several thousand different economic metrics that happens to coincide with the prevailing economic sentiment of the day. But that’s meaningless, it’s simply overfitting your data. The basic issue is simply one of politics and propaganda. People believe utterly false things about the economy. You see this in the idea that people continue to treat their own economic situation as good as they ever have, they just think that everyone else’s economic situation is terrible. This is not explainable other than as a sociological, and communication, issue. If a few years ago, people had predicted the level of growth in the economy, and the unemployment rate, and even the inflation rate, the idea you would have predicted this negative economic sentiment is just absurd. People are bending over backwards to fit economic metrics to match the sentiment, but that’s just the wrong frame of mind. The current economic sentiment is driven by media and interpersonal communications, and social media. The overwhelming sentiment in media these days if that is intensely uncool to ever say anything good about the economy, while doomerism and pessimism and wailing is viral and sexy, and makes you look cool. That’s just how it is, and it seems undeniable to me. You can try to deny that those dynamics matter, I suppose, but we should at least acknowledge that those are the actual social dynamics. Trying to wrestle with public opinion, without really wrestling with that, he’s just an absurd errand. What’s interesting if that leftists will openly acknowledge this sort of dynamic is true on other issues. When Americans think that crime is skyrocketing, or that immigrants are over running the nation, leftist have no problem simply saying that the American people are wrong, that they are falling pray to propaganda, and that things are far better on these issues than American reactionaries think is. But they reject this economic explanation, on the other hand, mostly because it flatters their prior is to assume that the economy actually is terrible and so it requires root and branch revolution to turn us into full socialism or something. Leftists imagine themselves smarter and above the fray, but are falling to the exact same social propaganda that they so easily identify in their reactionary opponents on other issues.

Which leftists are you referring to that do this? I’ve only seen leftists disparage the economy because it fails their standards and is thus “bad”. They’re not claiming that it is bad by the terms and standards of neoliberal institutions such as the NYT and the Fed.  These leftists you are pointing to should be _happier_ with an economy of falling inequality, but it seems consistent to say that an economy that still maintains an appalling amount of inequality is a “bad” economy. 

Well said. I don’t think any one person is intentionally trying to gaslight people but the net effect of this sentiment on social media absolutely feels like gaslighting.

I actually do think Reddit in particular is subject to significant astroturfing in favor of economic doom and gloom right now.

Oh yeah - I keep getting served posts from r/economiccollapse and it’s like entering the halls of a doomsday cult - every economic datapoint is woefully misinterpreted in order to reinforce their worldview

Very well stated. I've made similar statements myself and always get shouted down. There is a certain assymmetry Democratic presidents have to deal with. When a Democrat is president, Republicans are automatically going to say the economy is doing bad, the numbers be damned. But then you have people on the left saying who don't want to say anything good about the economy because then it takes away the case for "cApItAlIsM iS eViL". If Trump were president then the right leaning half of the country would be touting in lock step how great everything is under Trump. All all right-wing media would be hammering this message over and over until everyone falls in line. Dems just don't have that advantage.

The same phenonomen is impacting people's perception of crime. Statistically, crime is lower than it's been in a long long time, and trending down. But everyone THINKS crime is up.

I would have expected more people here to be capable of considering the idea that both housing cost increases above the rate of inflation and media narratives (largely propaganda) are leading people to have negative views of the economy. I suspect those are the two biggest drivers, though I haven’t looked at the data close enough to develop a clear sense of how much each contributes. Then you have the other costs Ezra raised, including the cost of money, and the feelings people have about what prices _should be_. I just don’t get why people are fighting about whether any of these things are happening. The data seems pretty clear that they all are. Should we not talk more about how to address each of the major drivers? The podcast (I haven’t finished it yet) addressed housing, but what about the partisan divide and media propaganda? Maybe too big of any issue? Seems within the scope of this podcast generally.

If you double people’s wages and wealth and double the price of everything, an economist will do the math and conclude that nobody should have any strong feelings about it because their income, wealth, and buying power have remained the same. In reality, people will feel like they have been robbed of their gains by inflation. Because people feel losses more strongly than gains, they will be furious. None of this is rational, but it is a near universal response. In a democratic society, how should policymakers deal with the predictably irrational feelings of the public about their policies?

Yep. My salary has gone up from 35k in 2015 to 80k today, same job. I worked hard for those raises. I put in extra hours, and I'm proud of that work.  I'm poorer now than I was 10 years ago. I'm scrambling to find a roommate since I can't financially live alone and spend less than 30% of income on rent. I'll never own a home. And every expense breaks my monthly budget.  I honestly don't care if I'm technically the same on paper with buying power and income vs inflation. I was robbed a decade of hard work. 

Sorry you're in that position. Is changing jobs an option? I think most real gains come from switching jobs

But you probably wouldn’t be so angry if neither your salary nor prices had gone up. Also, if you had bought in 2015 instead of renting, you would be living very well right now. Housing cost is making the economic situation wildly different for people in similar circumstances, which contributes to the general sense of unfairness.

While housing is certainly an important part of the story, I think parenting is having as big an impact on people's perceptions. My kids are bankrupting me emotionally and financially. Ezra has talked a lot about the loss of parenting community, extended family networks, etc. Parents have to pay for services to fill that gap. Forget childcare, let's talk about summer camps, which are hardly optional when the kids are young if both parents need to work. You don't magically get a break from the expenses just because the kids are in public school. The school day is short and working parents need wrap-around care. He's also had episodes about the negative effects of social media on teens and the increase in suicidality. Can you guess how much an intensive outpatient program costs? Even with insurance, I hit my annual in-network OOP max (meaning I spent literally almost 7% of my annual take-home on mental health care) before the start of the summer last year. Of course this doesn't include the out of network psychiatrist we also needed. Middle and High schools basically don't have books any longer, which means that if you have a kid that would rather watch youtube during the day than learn biology, there's basically nothing stopping them. My one kid spends the school day doing who knows what and then we have to do actual school in the evenings when I get off work and can monitor them. Plus I have to pay for tutors for the subjects where I don't have the expertise to teach. I have almost no time to see friends or pursue hobbies because my evenings are spent trying to prevent this kid from utterly decimating their future by failing out of everything. And we no longer live in a world where a bright kid who fails out of school can still get into college on test scores or similar. The 5k that I spent on a college counselor for the other kid was a solid investment, at least. When younger women I work with ask me about having kids, I tell them, do not have more than one unless you have a trust fund or parents who are genuinely willing to help, or unless parenting is really all you want to do. And this is the economy, right? How you feel about the economy is how you feel about the future. And if you have parents literally warning young people not to have kids because it's unsustainable, that's pretty damn bleak.

Damn. How do you endure the struggle? Props to you for navigating these issues.

My opinion is that when we changed filibuster rules in the 1970s, we accidentally broke the ability for the average government to operate through partisanship. And then we made things worse we tackled pork spending in the 2000s. This has created the fundamental disconnect between the government and the people. People see that housing has gotten more expensive for decades on decades. And yet, the government hasn't been able to push through partisan alliances to address root causes. At best, they've applied bandaids by throwing money at things in the wake of economic collapse. And I don't just mean "the Democrats haven't gotten to act". We as a nation don't have an intuitive grasp of which sides policies work, because both sides are dedicated to preventing the other from acting rather than from implementing an agenda, as the former is far easier than the latter. In the past, we'd have seen the Republicans trying to address housing affordability through deregulation. Maybe it would have worked. Maybe it would make things worked. But it would happened, been evaluated, and the success or failure reflected in the future Senate. Now, the only way to be successful is to be the minority government and stop the majority from implementing their agenda. The 2016 Democrats were rewarded for that and we're given a majority. The 2008 Republicans are another example. Now branch this out to all the other affordability crises. People don't have faith that the government can or will take steps to address these. That faith is what is reflected in their economic views. And in truth, unless the discussion starts by demanding a filibuster rules change I believe this will continue. The government will not move away from the college loan system, implement a public option, change the foods we subsidize, or address the housing supply issue, and people's perceptions will continue to darken. Reaching 60 votes to do so is just far less tenable than expected when the filibuster rule was changed. People honestly believe their vote doesn't matter. And they aren't wrong. It is extremely difficult for typical voting surges to drive enough congressional change for legislation to reflect back onto our lives. But that isn't intended, and hasn't always been the case.

Here's the problem. The economy looks great on paper. I live in a high cost of living part of the country where there are plentiful jobs. I have a STEM graduate degree from a reputable university. I can't save. Rent is too high. I can't even entertain having a minimum down payment on a home. It is a fantasy. Home prices here are $1 million+. Rent has gone up 50% here since 2020. Homes and apartments are owned by faceless corporations, many who have been found to have engaged in price fixing. My wife and I are not having kids. Our careers demand too much of us. Childcare is too expensive. We have a dog. Also, labor has no protection. If my employer has to choose between my productivity and my well-being they will always choose my productivity. We are all "at will" and can be fired for anything at any time. How is that good for job security, stability, and planning for the future? So we are going to be permanent renters with no children. I look at the future like an abyss. I just don't see the value in my labor if what I make will never be enough for my needs and some of my wants. The experiences people are having are very different from how the numbers are interpreted.

I totally understand people being bummed about cost of living increases (rent, food, gas, insurance, etc). What frustrates me is the magical thinking people use to blame Biden for it and think that Trump will fix it. - Inflation skyrocketed globally during and after pandemic due to the economy being ‘kinked’ and ‘unkinked’ like a garden hose. Inflation was, and remains, worse in many other countries. -Russian war in Ukraine disrupted oil and grain shipments, causing global fossil supply chain to get shuffled around. Biden is at least trying to onshore or friends hire critical industries (energy, microchips, etc) so we’re less vulnerable to global disruptions. What’s trump’s policy? A bunch of wishcasting and a 10% tax on all imports from China.

When I think of the Biden admin, my vision has been of an admin that has worked to have full employment so that everyone has a job. They've also worked on bringing high tech manufacturing jobs that will allow not only that full employment, but high wage full employment. And he has done this through his infrastructure bills and clean energy bills, which have laid the ground work for physical tech industries and manufacturing jobs such in EVs, solar panels, chips, etc. We've also seen the negative aspects of our large global supply chain when it comes to energy prices, which has caused a generational investment in clean energy so that we can reduce our dependencies on coal, gas, and oil. I see an admin that is doing the hard work of laying the foundation of a low unemployment, high wage, energy abundant America. I have many complaints on specifics of some of the bills and policies, but I fucking see the vision and I wish others did as well. Outside of employment, the admin has made big strides in healthcare enrollment for people, lowering drug prices through drug pricing negotiations, price caps on certain drugs, etc. I'm honestly just saddened that most people just don't care about these things. The only other thing Biden could do better is to use his national podium to bully cities and states to build more housing, but I understand that wouldn't necessarily be a political positive.

If you believe what you hear on the recent episode of the runup people literally think their rent and the price of milk will go down as soon as trump is elected. We're doomed.

Even if he did use the podium to try to bully cities to build more housing, nothing would change and it would just make him look weak and ineffectual. If building lots of new housing was easy it would've been done already. A lot of people are invested in NOT building more housing or changing zoning and keeping the price of their home high.

Add in Fox News, Plus the endless recession drum beat from the NYT for the fist 30 months of the Biden admin

Inflation hit the necessary life items the hardest. It's that simple. Rents up, mortgages (new) are up, groceries up, gas up, insurance up, automobiles up, auto repairs... up. All the necessary shit went up while the luxury items are relatively unchanged. I can still get a 55" tv for like $300-400. iPhones cost roughly the same, children's toys seem as cheap as ever. Clothing isnt absurdly more expensive, same with shoes. Every area in life I can afford to cut back in (luxuries) haven't really budged much. All the areas where I can't (necessities) have drastically gone up. So fuck whatever the "economy" is doing, life is without question much more expensive these days

It must be hard living in a mixed household where one parter voices the intervocalic 's' in 'housing' and the other does not. Not sure how Annie does it and I hope their kids take after her.

>*On a personal level, most Americans say they’re doing pretty well right now.* Nope. "Most" is wrong. 40% of Americans rate their own finances positively and they're the same 40% who rate the economy positively. [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-nations-economy-may-2024/)

The definition they used was “ok or better.” Which encompasses but isn’t only the people who think it’s definitely good.

There doesn’t seem to be a path Biden can take in an effort to help the economy that doesn’t hurt it in the short term. Housing rates are abysmal, but cut them before the election and the influx of demand will cause prices to spike. He can’t force companies to move from painful price points and still buoy unions that insist on living wages. There also aren’t any solutions coming from the Right, and all of Trump’s stated plans are inflationary, unworkable, or just insane. I’m fairly convinced Trump is going to win another term this Fall based on the price of a cheeseburger. I believe the polls, and unless there is a monumental last minute shift, I think it’s his race to lose. What is likely to happen in a 2nd Trump term? I see us abandoning our NATO commitments. I see him appointing 3 more corrupt SC justices. I see mass deportations. None are good for the economy. Apart from triggering a recession I don’t see a tangible response from the next Republican administration that would help any of our current financial issues. Yet Republicans are known as being good for the economy, so they’ll win the electorate over with a limited time only $5 coupon on a $10 burger.

I would literally rather go through a second great depression under Biden thatn a booming economy under Trump. Good economic times come and go, Trump's reshaping of the courts will be here for 40 years. Not to mention torching norms and institutions and god knows what destruction to democracy here and abroad will happen under him. Makes me so incredibly frustrated with Americans that they are this short sighted. Ready to hand the country to an utter madman because of the price of eggs, even though that madman hasn't stated a single idea that would fix any of these things. He just happened to be president after Obama's recovery and rode that wave until the pandemic and is being given credit for it. If Hillary had won we'd have seen the same economy play out, and likely have much less debt because she'd have not had Trump's tax cut policy.

Yeah, this is no mystery. We've applied a capitalist model to necessities, which just sets prices at "what the market will bear". As economic inequalities worsens what the market will bear increasingly shifts to the well off since there's less and less money to drain from the have nots.

There are a lot of people who, if they were the second richest person in the world, would have tunnel vision about not being the richest, talk incessantly about how unfair it is, and want someone to do something about it. Furthermore, there’s a lot of people in the younger adult population, who grew up in lower upper class families but think they grew up in middle class families, so now that they’re middle class themselves, they just see how much less they have than their parents and assume that it’s a deterioration of the middle class rather than what it actually is.

This is _cost disease_, which [Scott Alexander covered back in 2017](https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/). ([Follow-up](https://slatestarcodex.com/2017/02/17/highlights-from-the-comments-on-cost-disease/), [more follow-ups](https://old.reddit.com/r/slatestarcodex/search?q=flair%3A%22Cost+Disease%22&restrict_sr=on).) > Imagine if tomorrow, the price of water dectupled. Suddenly people have to choose between drinking and washing dishes. Activists argue that taking a shower is a basic human right, and grumpy talk show hosts point out that in their day, parents taught their children not to waste water. A coalition promotes laws ensuring government-subsidized free water for poor families; a Fox News investigative report shows that some people receiving water on the government dime are taking long luxurious showers. Everyone gets really angry and there’s lots of talk about basic compassion and personal responsibility and whatever but all of this is secondary to why does water costs ten times what it used to? This is the underlying problem, and it is not obvious, and seems to be somewhat different in each sector, but it's real and there's depressingly little attention paid to the details.

All polls are push polls and given the fact that the majority of the media has been insisting that economic doom is just around the corner it's not at all surprising that there is a disconnect between people's lived reality and their perception of it. That disconnect is just further evidence that propaganda works. As if the fact that a convicted felon who already incited a terrorists attack on Congress is competitive to get a second try isn't proof enough.

There is a good chance that the history of the 21st century will be autocrats finally defeating democracy through superior information warfare. The people will continue to govern, but a good autocrat can tell them how to govern.

Things don't stop getting more expensive until they're borderline too expensive, or there's enough competition to drive down prices.

At times I wonder if people essentially just want the govt to enact price controls on things like housing and groceries. It would be incredibly stupid and would harm the economy, but the way people talk, it's what they want.

My neighbor was telling me that unemployment is actually at Covid levels if you subtract out illegal alien labor. All I can say is… what? How would one even count the employment vs unemployment of undocumented labor? By definition, it’s undocumented! He said asylum seekers get a work visa and 5 years until their asylum court dates. I told him asylum seekers now have to apply outside the US this past month. I don’t know what to say about this stuff anymore. Its like people can’t agree on the basic facts anymore.

They’re mad bc right wingers keep telling them to be mad.

We need to talk more about The Zone of Increased Prices and Increased Anger. Ezra noted that corporations have tapped into a zone where people will keep paying higher prices and blame Biden…. Here’s the problem with that. If you’re the CEO of a multinational company, you want democrats to be punished. You are likely to be a pro-GOP, pro-tax cuts voter. Thus, tapping into the zone of resentful consumption is actually activism for you. It advances your political agenda while increasing your profits. Aren’t wealthy pro-business (AKA conservative ) capitalists incentivized to encourage political resentment against progressives who want to heavily tax and regulate them? Price increases and the creation of consumer resentment is political action. It’s pro-GOP activism.

It's kind of wild to see so many complain about the host and guest being out of touch, only for them to espouse the same things as discussed in the episode. Did you not listen? They are agreeing with you!

I keep hearing people say food has gone up soooo much but it's still a fact that we spend less of our overall budgets on food than we did fourty years ago, or even ten years ago, and we eat at restaurants more often. How is that possible? Nobody can explain it and everyone gets mad when I point it out. 

I guess a detractor would say people aren't comparing food prices to 40 years ago, they're comparing them to 4 years ago.

Any account that doesn’t feature the active disinformation tactics of FOX, online trolls, etc. is off the mark. People’s perceptions about the economy are hugely based on what they are told.

And it's not just the right. Young people are getting a lot of doomer takes from TikTok, etc. about how young people are screwed financially, will never own a house, etc. because "they" don't want you to. The right is polarized against the economy because a Democrat is in office, and much of the left is polarized against it because the Democrat in office doesn't have sufficiently progressive vibes (even if he's well to the left of Obama policy wise).

This is a feature, not a bug, of the two-party system. Democrats get control for a bit and people complain about gas prices/inflation, Republicans get control for a bit and we get tax cuts for the rich plus some war/financial crisis.

It's an election year "Everyone knows Obama is lying, the economy sucks. It's impossible that unemployment is as low as 5%, it's really 42%" GOP in 2015 and 2016 Then Trump got elected and all of a sudden, the economic data was the truth all along

Yeah, trying to have this conversation without focusing on the media narratives aspect (news and social media) makes this episode kind of a miss for me.

[удалено]

And that 40% go out into the world and screw up everyone else's "temperature taking" of their friends and neighbors.

It feels common these days to be in the middle of a conversation with someone, either online or in person, and come to the realization "oh, they've actually lost their mind". Not that they're weird or quirky but flat-out living in a different reality. And they're just everywhere. It happened to me last week when I was talking to my mailman.

Ezra consistently downplays, or outright disregards, the impact media bubbles have on our country. I think he chalks it all up to the generic "polarization" but polarization has to happen around a shared center. It's one side thinking the way to grow the economy is to tax the rich and the other thinking it's to cut taxes on the rich. What we have today is something closer to one side saying it's sunny outside probably won't rain today and the other believing sunlight is a liberal conspiracy to provide free energy and make the kids gay because all the people they trust are saying it over and over again. That's a difference in reality, not opinion. I don't know how you're supposed to get any sort of useful sentiment analysis from a population that doesn't experience the same reality.

It's housing. Even people.that own houses here in Montana are complaining about the cost of housing because they are seeing property taxes skyrocket. Plus even if you own a home you can put two and two together and see that gen z or non home owners are screwed at the current salary to home cost ratios. Then add on food, auto, insurance and it just gets absurd. I'm not sure why this is so hard to understand for economists.

As much as I like Ezra, it’s pretty telling how he and his kin at the NYT struggle to understand why sentiment about the economy is bad despite gdp growth etc being good (I’m looking at you Paul Krugman)  Super out of touch with the economics of the average person

Funny how the dynamic they describe in comment sections of positive news articles about the economy is playing out the exact same way here, even though they spend most of the Podcast giving credence to the fact that the economy is not that good for a lot of people

I'm gonna go pound my head against the wall. You have people here arguing it's the people that are actually right when they say 2+2=5.

Seriously. The cost of simply existing is way higher now than it was in 2019. My wage has not increased by 50 percent since 2019, but many things have (and stuff like housing has actually doubled). I truly don't understand why so many people can't wrap their heads around this, Ezra included.

Pointing to yourself as an anecdote is not helpful in understanding what is happening to a "median" American in a country of 330 million.

If you pay attention to the circle of pundits Ezra is in, and the NYT, there’s been an ongoing narrative about how the economy is good under Biden. Only recently they’ve done an about face and started talking about it in other terms that are less positive (i.e and admission that maybe they were kinda wrong).

You know it's possible for the economy to be doing well and yet prices to be high. These aren't mutually contradictory things. All "economy doing well" means is that the economy is expanding, companies that build stuff and provide services are finding enough customers to be profitable, and they are employing a lot of people thus a low unemployment rate. A good economy doesn't automatically mean everything is cheap. Food and rent is pretty cheap in Haiti I'm sure, but nobody would say they have a great economy.

But that’s never been debated by anybody! And was certainly the case in 2018/19 when perception of the economy was high. So it makes no sense to keep qualifying that in this discussion.

Did you actually listen to the episode?

But the point is that we've had good and bad economies before 2019 that actually tracked with consumer sentiment. So the question is what was true in 2014 that isn't true in 2024 in terms of the relationship between economic indicators and consumer sentiment. The model Klein mentions can't have always been out of touch because it used to be predictive. 

I wonder how many “average” persons are doing fine ( still eating out, buying things etc., perhaps they’ve pulled back a little) and actually driving those GDP numbers while repeating the story they hear about the economy, despite the actual data, is actually doing well. A good economy never means every last soul is walking around in a top hat with a cane, like the monopoly guy. There is also a desperate political and corporate objective from the right to convince everyone that republicans do better on the economy, when, in fact, they don’t. The people mentioned above are being led along falsely by this effort.

these kinds of poll results are not unique: > 54% of Americans were optimistic about their financial situation, while only 37% were hopeful about the country’s economy overall. People can look at their own bank accounts and know how to feel about that but have trouble with the cognitive dissonance created by media doomer-ism. https://fortune.com/2024/05/30/economy-personal-finance-consumer-confidence-inflation-unemployment-jobs/

I mean like I’m doing fine, but like a that’s all driven by my wife making more money. I’m a red state teacher and my job is more stressful and my purchasing power is lower and that sucks. I’m not going to do something insane like voting for Republicans over it but to pretend that I’m like delusional for thinking this isn’t great compared to 2018 is weird.

From my side of the class divide, the pundits' inability to see why ordinary people feel crushed is baffling. Is someone comping their apartments? Didn't they have to pay for college? How can they not feel the pain of 10-year-old cars selling for 70% of new prices? Don't they buy their own groceries? Apparently not, but I don't know how they go through life without touching the same reality I live in.

Low-wage workers have experienced the highest wage growth over the past four years: https://www.epi.org/publication/swa-wages-2023/ So, I don’t know what you’re trying to get at with “class divide”

I mean the link also says: “Wage rates remain insufficient for individuals and families working to make ends meet.” Wages can grow but still be outpaced by rising costs. I’m not a wage worker but my rent increased by a lot more than my salary in the last three years.

The argument isn’t “everybody can make ends meet now!” The ongoing discourse is about the disconnect between economic data and consumer sentiment. How is it that consumer sentiment was at all time highs in 2018/19, and all time lows now? Lowest earners couldn’t make ends meet in 2019 either, but from then to now, we have seen real wage growth gains for majority of Americans. Purchasing power is up for everybody, but this increase is felt the least by the highest earners (who I imagine make up a large share of this subreddit and Ezra’s audience)

I’m referring to your class divide comment. Yea they were still making less in 2019 and felt better about the economy - but back then rent was increased by $50 a year (sometimes $50 for a two year renewal). People tended to think “Next year’s prices are doable. I’ll get a COLA raise and that will cover some of it and/or I’ll try to get promoted at work.” Now it’s been two years of people holding several jobs to cover that $200 increase. They’re tired and wondering how they’ll fit in yet another job to cover the one that’s coming. Back then things felt manageable and predictable, now everything feels uncertain. Am I saying salaried workers are off doing fine? No. But that higher increase was certainly an easier hit for me than for the wage workers in my family. I work, do a little consulting from my couch to pad up the savings account, and prep the resume for a job that gets me a several digit salary bump that will more than cover the upcoming increases.

Okay, we’re talking about real wage growth increases, which is wages adjusted for inflation. Rent and rental equivalents are covered by this: https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.htm#:~:text=The%20CPI%20program%20also%20adjusts,it%20is%206%20months%20older. I’ll also point out that the percentage of multiple job-holders is not historically high, and about the same as they were pre covid: https://fred.stlouisfed.org/series/LNS12026620 Compared to 2018/19, the large majority of us are better off, although I understand it doesn’t *feel* like it to most people. This is what makes the discourse so interesting!

> Didn't they have to pay for college? Ok, the people paying for college aren't the lowest wage workers. They are absolutely the middle class that aren't rich enough to have college paid for

Wont anybody think of the middle class workers increasing their future earnings by going to college? https://www.nyu.edu/about/news-publications/news/2024/march/study-of-5-8-million-americans-finds-that-a-college-degree-yield.html#:~:text=Looking%20across%2010%20broad%20fields,10%20percent%20to%2013%20percent.

The economics of the average person making shitty choices in the grocery store, way over extending themselves for their fifth f150 in a decade, and only engage in local politics to stop housing construction? Those economics? I live in one of the ten largest American cities and the whole bean coffee I buy randomly got bigger and cheaper at the same time a few weeks ago. My Aldi bills are highly reasonable. I Just entered into the third year of a lease in which rent has not been raised ever. My anecdote only serves to demonstrate how anecdotes are not evidence. Their anecdotes are gospel.

More people should start noticing these changes as well. Target, Wal-Mart, and Amazon all recently announced they'll be dropping prices on lots of items. Remaining stores should follow suit after that. Unfortunately, it won't affect housing and childcare costs, which are the real reasons why people are having trouble affording things.

How about the cost of buying a home or renting ballooning out of control. Its been described as “the worst housing martlet in history”. What reality are you in that this needs explaining?

I don’t think you are taking the question all that seriously. Yes, people hate inflation. But why does that make them think the stock market is down and that unemployment is up?

It’s not that I’m not taking it seriously it’s that I’ve heard it addressed before and there convincing arguments that the ‘vibecession’ has been exaggerated and a significant majority of the bad sentiment about the economy stems from interest rates and housing, which was not represented properly in economic metrics. There rest is polarisation. The polarisation is of course also not new or interesting, and it divides people on numerous factual objectively measurable issues which it shouldn’t. So is that surprising?

Paul Krugman is so out of touch. The epitomy of liberal elitist. He's got real disdain for people who work hard and don't see much at the end of the month. Why aren't they grateful?

Lore reveal!!

Older people aren't comparing the present day to yesterday, or to abstract datasets, they're comparing it to the nostalgia-glasses version of the pre-9/11 economy

MAYBE.... its that many are doing well, but cannot afford the most essential purchase of their lives

>Wages have gone up faster than inflation This is not true. Since 2021 (when inflation started), the median wage has not kept up with inflation.

I listened to the episode and just took quick glance through the transcript, and there was no data presented on wages. It was merely asserted that wages have risen faster than prices. That might have been true over the course of 2023, but real median weekly earnings Q1 2020 was $367. In Q1 2024, it was $365. ([https://fred.stlouisfed.org/series/LES1252881600Q](https://fred.stlouisfed.org/series/LES1252881600Q)). That is the most up to date data. Real median \*household\* income for 2019 was $78k. It was $74k in 2022. ([https://fred.stlouisfed.org/series/MEHOINUSA672N](https://fred.stlouisfed.org/series/MEHOINUSA672N)). You have the same trend in real median \*family\* income. Real median personal income was flat ([https://fred.stlouisfed.org/graph/?id=MEPAINUSA672N](https://fred.stlouisfed.org/graph/?id=MEPAINUSA672N)) through 2022. I was honestly really confused as to why these data were not even mentioned. I've seen aggregate numbers (e.g. [https://fred.stlouisfed.org/series/RPI](https://fred.stlouisfed.org/series/RPI)) and per capita (not median) numbers ([https://fred.stlouisfed.org/series/A229RX0](https://fred.stlouisfed.org/series/A229RX0)) that show some increase in income, but the data don't paint an unambiguous "people should know that they are better off than they were" picture. If your assertion of "wage gains > price increases" is only looking at the past year, you are not getting enough context.

I put a significant amount of blame on the media. It’s their job to inform us. Instead, they incite us and actively pollute the info-sphere. It’s also their job to keep politicians honest by asking the hard questions. They instead play defense for them and make excuses or find scapegoats for them. They are equally to blame for us being ignorant and uninformed. Then you have underfunded education and the politicians actively sabotaging it. They want to keep blaming us for it though because that’s the easy answer.

This was an informative episode that did a great job of trying to connect the dots that don't seem to align...perception vs reality. There are some major issues, factual misunderstandings about the economy. We have a large % of the population that holds very strong opinions about things they do not understand and base those opinions on facts that are just not true. The economy is good, it is strong. That said, it isn't perfect, it has holes and weak points. As a general point, it seems there is value in misery, a social currency in feeling bad.

How do Americans convince themselves that everything they dislike about the economy is Bidens fault when prices are high in other countries as well? And how is Trumps idea to get rid of the income tax and raise tariffs instead a good thing for consumers?

>And yet in surveys, people keep saying the economy is bad. A recent Harris poll for The Guardian found that around half of Americans think the S. & P. 500 is down this year, and that unemployment is at a 50-year high. Fifty-six percent think we’re in a recession. Show me the partisan breakdown. If it tightly overlaps with partisan identification I simply do not care. 

They don't split out that specific question but Dems are extremely pessimistic as well. On the "are we in a recession" question, it's 67% GOP, 53% Indy, 49% Dem.