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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.

By almost every metric, the US economy is doing quite well at the moment.

The metrics are gamed and don't really exist.

Inflation is "good" because it's not increasing as fast as it was -- it's still increasing after all. And the previous increases didn't go away. Not to mention that "core inflation" excludes housing and gas and food, as if home prices reaching unaffordable highs is some sort of triviality when The Economy Is Doing Great.

Unemployment is good because the numbers are gamed in a million ways. A typical pattern these last few years has been for employment figures to be "better than expected" when first announced, then quietly revised to much lower numbers a few months later. But it's always been a gamed figure, when people who stop looking for work are no longer counted as employed.

The economy is growing? Remember when they changed the definition of a recession because they didn't want to admit we were in one?

This latest media narrative is one if the most shameless I think I've ever seen. The economy must be doing well, because we've proclaimed it. And since no one believes us, we have to understand what's causing all this irrationality. Is this the dark undercurrent of the post-truth society Freud exposed by tapping into our deep inner pathologies? Are Republicans just that impervious to the truth? Sure, whatever you say I guess, your twelve inches are amazing President Biden, I must not be feeling it because I've been such a naughty boy.

Not to mention that "core inflation" excludes housing and gas and food, as if home prices reaching unaffordable highs is some sort of triviality when The Economy Is Doing Great.

Yeah, it's literally impossible to square reported inflation numbers with the lived experience of watching housing costs explode 50-200% higher, rent explode 25-50% higher, or the prices of staple foods doubling. To whatever degree the CPI is or isn't a lie is besides the point. It's almost completely unrepresentative of how people are experiencing the cost of goods. I truthfully couldn't give a shit that flat screen TVs are cheaper. I'm not buying one every month.

lived experience

Well it's good that you said the term for me, because any 'lived experience' argument would get short shrift here if someone tried to use it on literally any other issue. But because this is an opportunity to shit on Democrats/the left nobody feels the need to have falsifiable beliefs anymore.

But because this is an opportunity to shit on Democrats/the left nobody feels the need to have falsifiable beliefs anymore.

I think the real reason is because this lived experience is shared by a lot more folk than previous usage of the term and it is easily verifiable by a large amount of people.

It isn't verifiable though. It's anecdotes focusing on a tiny non-representative sample of the data. Who has actually collected the data in a proper way and is reporting much higher numbers than the government?

focusing on a tiny non-representative sample of the data.

That is the issue in contention as I see it. And besides that I'm just explaining to you why the usage this time may be more valid than the claims of a few activists, if you think it isn't, well ok we agree to disagree.

Who has actually collected the data in a proper way and is reporting much higher numbers than the government?

Right from the bat I can tell you that's not the government, just the Rent/Shelter portion of the CPI is nonsense; so I don't really put much weight on the whole thing.