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Culture War Roundup for the week of October 30, 2023

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A deep and enduring “vibecession” – Partisan differences are increasingly dominating perceptions of the economy.

By almost every metric, the US economy is doing quite well at the moment. There are many ways to evaluate economic vitality. The most obvious is the headline unemployment rate, which was used throughout the Great Recession to monitor the (slow) recovery. Today, though, unemployment is hovering near record lows at <4%.

Beyond this, there are somewhat nerdier, more technical measurements that still capture important aspects of the economy. Things like inflation, GDP growth, and the stock market. All of these indicators are somewhere between “good” and “great”. Inflation has come way down and is now around 3.7%. Core inflation, a better measurement of long-term inflation that excludes volatile commodities like gas prices, is even lower at around 2.5%, essentially hitting the Fed’s 2% target. GDP growth is surprisingly high for Q3 at 4.9%. The stock market is also doing fairly well, with the S&P500 being less than 10% off its all-time high at the end of 2021 and being well-above the pre-COVID high in Jan 2020.

Drilling even deeper, at this point you start to get the indicators people and the media can “fish” for in order to find bad news. Things like median wage growth, wealth inequality, and prime-age labor participation rate. The thinking with these metrics is that even if the more commonly cited stats are doing well, they might not paint a full picture. For instance, if the economy is growing but the rich are eating all the gains, then things like wage growth and inequality can show how most people aren’t benefitting. Likewise, if the unemployment rate has fallen because people have become discouraged and just don’t bother looking for work any more, then labor participation can show what’s really going on. The steelman of these metrics is that they can be helpful in painting a fuller picture, although in practice I’ve often only seen them used when people are willing to use motivated reasoning to paint the economy as underperforming (e.g. politicians, doomers, or the media just trying to create a story). That said, even by these metrics the US economy is doing well. Median wage growth is very high and is well-above inflation. Regular Americans are getting richer, and wealth inequality has fallen.. The prime age employment rate is also near record highs.

In spite of all of this though, many peoples’ opinions of the economy remain in the dumps. The consumer sentiment index has recovered only slightly from its record low a few months ago, but is still barely better than during the worst parts of the Great Recession. What gives? Well, there’s quite a bit of evidence that it’s just partisan emotional expression, i.e. “vibes”. There’s plenty of data showing that Americans tend to rate the national economy as being much worse than their own personal financial circumstances. Kevin Drum has some evidence that this national-personal split is mostly being driven by Republicans. 71% of Democrats and 57% of Republicans say the economy is doing well in terms of their personal situation. But in terms of the nation as whole, 58% of Democrats and just 5% (!!!) of Republicans say the economy is doing well on a national scale. So you have this goofy scenario where Republicans across the country say things are going well for them individually, but as a collective things must simply disastrous. Where is this “disaster” occurring? “Well, not here, but it’s surely happening somewhere”. The 5% mark is particularly interesting because it perfectly matches Republican’s approval rating of Biden. In other words, it seems like asking people how well the economy is doing is just a proxy for “what do you think of the current sitting president”. I’d doubt the numbers would correlate this perfectly all the time, but there’d still be a significant relationship. Whichever party doesn’t control the White House will see the economy in much more pessimistic terms.

Currently this is just applied to Republicans being pessimistic, but it’s almost certainly symmetrical. When Republicans eventually take back control of the presidency, it’s not hard to predict that Democrats will suddenly think the sky is falling in economic terms.

I smell statistical bullshit.

My normal standard of living has taken a noticeable if not disastrous turn. My pay is roughly the same, my costs are a third higher to double on most normal expenses (energy, groceries etc.). My rent is up 30%, the value of my savings is down 20%, and the cost of buying a house is up 50%.

Three years ago I had a lot more disposable income. Now, all that might fit fine within the "economy is doing fine" narrative, but it doesn't feel fine to me. What I hear from posts like this is "economic metrics are bullshit statistical lies". I am noticeably poorer today than I was in 2020. All the statistics in the world aren't going to change that.

If you are doing worse, then you seem to be in the minority. And see here

Perhaps your personal situation is not representative of the norm, and that the cited data, rather than being "statistical bullshit," more accurately describes the norm than does your anecdote.

  • -14

Your sources are a yougov poll which says that people are financially coping... slightly less well as they were at the the worst point of covid disruption, and a low effort piece of blogspam with no data.
The same writer also has a piece with the exact opposite sentiment, because in that one she was pushing "struggling women need another 16 billion in government funding" rather than "dumb republicans are blinded to how amazing the economy is doing"

It is ridiculously and deliberately obnoxious.

Your sources are a yougov poll which says that people are financially coping... slightly less well as they were at the the worst point of covid disruption,

OP was claiming that his personal finances are far worse than three years ago,. The poll indeed indicates that that is a minority view, as I said.

And, isn’t "slightly worse" exactly how you would expect people would feel if inflation were precisely what the govt says it is?

and a low effort piece of blogspam with no data.

There is a link to a press release by the pollster in the blog.

I take it you are earning more than you were three years ago?

I think perhaps you are missing the point.

  • -11

Why didn't you say "Yes, but I think perhaps you are missing the point."? Is it because you are not earning more than you were three years ago?

No, it is because the point is that one person's income is not valid evidence, be it him, me, you, or someone else. Like I said, you are missing the point. As it happens, I quit the full time job I had three years ago because it was boring, and I am now working freelance, with fewer hours but at a higher hourly rate. Do you see how it is difficult to draw inferences about the norm from my personal experience?

Perhaps I am not trying to draw inferences about the norm. Perhaps the only thing that interests me about this topic is how perception of the economy is affected by personal circumstances.

Great! But the comment I was referring to was specifically about the accuracy of the official statistics

More comments

Perhaps. That's one option.

Another is that economics is staffed by the same sort of experts who run our health care systems, legal systems and educational systems. They went to the same schools, drank the same koolaid, attend the same parties and conferences, belong to the same socioeconomic strata. Maybe Gell-Mann Amnesia is creeping up on you.

Anecdote is small data, but it's the only data I can be sure isn't horseshit.

it's the only data I can be sure isn't horseshit

But the problem is that no one else can know that.

Yeah, it sucks when your sense-making institutions don't have any more credibility than Reddit randos. An appeal to authority would go down really well about now.

except people in JTarrou situation, which I assume is a bigger crowd than the one composed of economic experts.

?? Surely you don’t believe that the government income data is based on an analysis of the income of economic experts.

considering how they calculate the cost of shelter, it wouldn't surprise me.

"Hey Gates! How much would you say would you increase the rent in your mansion if you were to rent it out"

"Dunno, a three fiddly?"

A lens I've found extremely useful for understanding this conflict is the one John Michael Greer proposes in this article from 2016 https://www.resilience.org/stories/2016-01-21/donald-trump-and-the-politics-of-resentment/

Here’s a relevant example. It so happens that you can determine a huge amount about the economic and social prospects of people in America today by asking one remarkably simple question: how do they get most of their income? Broadly speaking—there are exceptions, which I’ll get to in a moment—it’s from one of four sources: returns on investment, a monthly salary, an hourly wage, or a government welfare check. People who get most of their income from one of those four things have a great many interests in common, so much so that it’s meaningful to speak of the American people as divided into an investment class, a salary class, a wage class, and a welfare class.

...

The answer, of course, is that three of the four have remained roughly where they were. The investment class has actually had a bit of a rough time, as many of the investment vehicles that used to provide it with stable incomes—certificates of deposit, government bonds, and so on—have seen interest rates drop through the floor. Still, alternative investments and frantic government manipulations of stock market prices have allowed most people in the investment class to keep up their accustomed lifestyles.

The salary class, similarly, has maintained its familiar privileges and perks through a half century of convulsive change. Outside of a few coastal urban areas currently in the grip of speculative bubbles, people whose income comes mostly from salaries can generally afford to own their homes, buy new cars every few years, leave town for annual vacations, and so on. On the other end of the spectrum, the welfare class has continued to scrape by pretty much as before, dealing with the same bleak realities of grinding poverty, intrusive government bureacracy, and a galaxy of direct and indirect barriers to full participation in the national life, as their equivalents did back in 1966.

And the wage class? Over the last half century, the wage class has been destroyed.

In 1966 an American family with one breadwinner working full time at an hourly wage could count on having a home, a car, three square meals a day, and the other ordinary necessities of life, with some left over for the occasional luxury. In 2016, an American family with one breadwinner working full time at an hourly wage is as likely as not to end up living on the street, and a vast number of people who would happily work full time even under those conditions can find only part-time or temporary work when they can find any jobs at all. The catastrophic impoverishment and immiseration of the American wage class is one of the most massive political facts of our time—and it’s also one of the most unmentionable. Next to nobody is willing to talk about it, or even admit that it happened.

This isn't true though. In 1966, the average person earned less than what is today minimum wage. You could support a family on that income today too, but you'd have to accept a big hit to your quality of life.

They went to the same schools, drank the same koolaid, attend the same parties and conferences, belong to the same socioeconomic strata.

And as such, are overwhelmingly to blame for the current situation in the first place.
Why anyone would trust their numbers, especially those that say "actually, we didn't fuck up, and you're just imagining it", is a mystery.

Because even small deviations of the official inflation or growth rates would become obvious over the long run, considering they are exponential. They would also show up in things like the exchange rate and interest rates. People who doubt the official statistics never sanity check themselves and consider what the world would look like if their skepticism was correct.

Because even small deviations of the official inflation or growth rates would become obvious over the long run, considering they are exponential.

Yeah, that happened. It's incredibly obvious, many people say it's incredibly obvious, and the experts just insist that's wrong anyway. People that say that they have personally experienced much sharper increases in prices than the official figures capture in the Covid Helicopter Money era are told that they just have to check the official figures to see that they're wrong. If you say it should be obvious if they're cooking the books, other people say that it is obvious, and you reply that this isn't what the books say, we're at an impasse.

Over the long run. They can hide the ball until someone they don't like can take the blame for it.

This is not only a non-falsifiable claim to dispute claims of skepticism with no limiting factors (it applies to all disputes over government claims if you do/cann not calculate alternatives), but it rests on the foundation being actualized- that the deviations between the official inflation or growth rate and reality is what is being claimed to be increasingly obvious by appearance.

Functionally, you've just said 'if they were lying, people would be noticing and saying something' to people who are saying 'I've noticed things that make me think they're lying.'

Functionally, you've just said 'if they were lying, people would be noticing and saying something' to people who are saying 'I've noticed things that make me think they're lying.'

Seconded and endorsed.

Furthermore, this is happening in the context of multiple instances where in the expert class has been caught lying or otherwise trying to manipulate the information flow for "the public good" regarding a great many things. Off the top of my head; Hilary's Emails, "Russian Collusion", Jeoffrey Epstein, all the shit during the pandemic about the effectiveness vs non-effectiveness of masks, Fauci's blatantly partisan flip-flopping on public gatherings, the lab leak theory, the effectiveness/non-effectiveness of covid vaccines vs natural immunity, Hunter Biden's Laptop, Musk's revelation of Twitter's incestuous relationship with the CIA and DHS, Transwomen in sports... you get the picture.

As I argued in a response to Scott's essay on "bounded distrust", I believe he's got the issue exactly backwards. The moral onus is not on the plebs/normies class to trust the experts. The moral onus is on the experts to be trustworthy, and what we are looking at is mounting evidence that most of them aren't.