If the economy is doing well, why does it feel like a disaster?

Want a quick summary of the daily news? Inflationary. Labor shortage. Supply chain issues. Omicron. Party. Mesh lock. Biden stalled. Trump is angry.

Therefore, it is not surprising that many Americans feel not so good about the country in general and more specifically about what we call the economy. However, the actual data on our economy goes in an entirely different direction: bullish.

While the news is hardly to blame for any of the problems, its tone certainly enhances your mood. And with New surge in COVID-19 created even more anxiety and uncertainty combined with the dim prospect of a major social outlay after Senator Joe Manchin announced he would do not vote for Build Back Better, the coming months are unlikely to change the story or change the mood for the better.
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But if you step back, things will be different. The various metrics we use to measure the economy are mostly as good or better than previous years and overall better than in the early GDP growth, unemployment rate, average wages are all on track, with unemployment around 4%, the lowest level in years, even places like New York City are lagging behind; GDP growth is expected above 5.5% by 2021, the best since 1984; Wage growth at the bottom of the economic pyramid is noticeable for the first time in a generation. In fact, wage growth at the bottom of the economic pyramid is actually faster than something that detracts from the picture: inflation.

Inflation affects those who have the least. If you can’t afford it, paying $10 – $20 more for a full tank of gas and $5 – $10 more each time you buy groceries is a serious challenge. But even if inflation heats up 6.8% in November, low-wage workers Seeing Wages increased by an average of 8%, as employers struggled to meet rising demand for goods and services. That trajectory could be distorted if Omicron leads to a nationwide downturn but it is unlikely to be halted given the booming economy and pent-up demand unresolved after several months of booming activity. explode. Some discuss whether those increases are significant, and given the complexity of the calculations, we won’t really know for sure the wage picture until the end of next year. However, with so many big companies raising minimum wages and so many positions unfilled, there’s no doubt that entry-level workers are doing better even with higher inflation.

Also, unlike the stagnant inflation of the 1970s and subsequent double-digit inflation in the early 1980s, today’s inflation is directly the product of more people having more money, consuming more goods, and more. goods and services after a pandemic of selective consumption. That means inflation is now a byproduct of both government spending aimed at easing the economic pain of the pandemic and of everyone from the poor to the very rich earning higher incomes. Today’s inflation is a by-product of a strong system, not a signal of a difficult system. That is not to say that inflation cannot be harmful or will not destabilize the economy. In that sense, inflation is like obesity: it is a symptom of affluence, of too much, not a sign of impending contraction or scarcity.

But the mood of the public and the story doesn’t reflect those statistics. The gap between the public’s understanding of what’s going on economically and what our numbers say is not just a feature of the present. At some point in the past twenty years, Americans have felt content about the future for a long time. At no point since the bursting of the tech bubble of the 1990s and the recession that followed in 2000 has Americans feel good about the economy as they did throughout the 1990s, and the highest point after twenty years of ups and downs was in January 2020, when confidence about the economic future reached the same level as in the early 1990s. And then there’s COVID-19.

In fact, the past twenty years have been a series of challenges, each of which has eroded American confidence and overall has changed what was once a country of early optimism and optimism (although despite its bad divisions) into a perpetually pessimistic country. The stock market burst the internet bubble in 2000; the 2000 “hanging chad” election; the 9/11 attacks; another stock market crash and corporate scandals such as Enron in 2002; the invasion of Iraq in its aftermath in 2003-2004; disclosures of metadata espionage and torture in US military prisons 2005-2006; the bursting of the housing bubble in 2007-2008 followed by the Great Recession of 2008-2010; a few decent economic years from 2013 to 2016 but still didn’t stop Donald Trump’s rise in 2016; the rigors of the first Trump years and then the pandemic in 2020 and the racial riots and protests followed by the controversial election and January 6.

In that context, it makes more sense to digest the way we’re doing economics. It’s true, too, that over the past decades the rich have gotten a lot richer while the middle class has tended to dwindle and the bottom class has struggled as ever. And China’s rise as an economic challenge to America’s global hegemony has also placed a nation and a nation that has long defined itself — and proudly — at the top of the economic pyramid. Global.

It’s not all about how we feel: even when our numbers look good, they mask changes and changes that can be deeply disturbing and often disturbing. Uncontrollable increase in healthcare costs. Drip erosion in the northeast and Midwest make; the opioid crisis in those regions; a shift in the composition of the workforce towards more service and often less secure and sometimes lower paying jobs; the way in which technology is creating change at a faster rate that most of us can easily adapt, all of which show not in GDP and employment numbers but intimately shape the way they are we live and how we experience life.

If we want to make a general assessment of how confusingly differentiating sentiments and numbers are, we use, however, vaguely, to measure what we call the economy. economy is essential. Numbers don’t tell us everything, and really tell us very little about any individual or community. They chart trends over time and those trends are mostly positive these days.

As we head into 2022, we can appreciate that it’s rare that things are generally good economically, even as we admit that it’s rare for many of us to feel insecure and disconnected. regarding those numbers. We would all do well to take a deep breath and admit that we are in much better shape than most of us feared or assumed even a year ago. That’s not to say any of us should be complacent, but we all need to check the trend of only seeing clouds. If the economy is doing well, why does it feel like a disaster?

Aila Slisco

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