Some Americans live in a parallel economy where everything is terrible
finance.yahoo.com
finance.yahoo.com
The average American doesn’t care how the investor classes stocks are doing and rightly understands that the parasites in the investor class are growing their wealth by siphoning it from the labor of the masses.
Uncanny “let them eat cake” vibes from this article.
Before actually taking a look on Instagram, I didn’t even know it was possible to live the lavish lifestyles on there. Even more surprisingly, it was of people I knew in real life; vacationing on yachts and all across different luxurious parts of Europe while being students of the same University. A forbidden thought: “what do their parents do? If only I could live like that” but I just forget about it and resume boiling plain rice and lettuce with no sauce.
A significant number of people believe we're currently in a recession and that unemployment is at a 50 year high (in fact, it's a 50-year low). That's likely due to significant propagandizing on outlets like Fox News, Newsmax, OAN, etc.
But, to be fair, economic gains have been vastly disproportionately going to the wealthy, and despite recent (as in the last year) inflation being low, prices in the last 5-10 years have skyrocketed, so it's pretty easy to get the impression that inflation is still high. That's especially true when wage growth only recently started outpacing inflation.
https://www.statista.com/statistics/1351276/wage-growth-vs-i...
For many people, it doesn't feel like the economy is doing well, so it's pretty easy to confirm their biases by telling them it isn't.
No one cares, or no one should care, about "the economy", some abstract bogeyman that the MSM is always going on about.
They should be caring about the wellbeing of median and modal households.
GDP was only ever intended by Kaldor to be a measure of general wellbeing, highly imperfect but the best available at the time. Now, it's a target, and we all know how that goes.
It's also likely the best time in history to get a mediocre job. $18 per hour for working retail isn't fabulous but it's easier to get now than it has ever been.
Not to put too fine a point on it, you sound very young. Rest assured that your handful of decades doesn’t suffice for a negative proof and furthermore plenty of counter examples are in living memory.
I've been through several depressions and know that while it isn't the best time economically, it's far from the worst.
Prices for everything are up significantly, some wages are up marginally, but not nearly to the extent needed to overcome rising prices.
"Something seems off with the Guardian-Harris finding that half of Americans think the stock market is in decline. In a different survey, Gallup found that 62% of Americans own stocks, mostly through retirement and investing accounts. If that's true, wouldn't most or all of those people know their portfolios are gaining value?"
The article only suggests that stock market performance is related to typical portfolios.
It does suggest that when many indicators are positive, the economy is indeed developing positively. But not the stock market alone. You're beating a straw man.
I'm not suggesting the article presents stock performance as the sole economic indicator. Rather, I'm emphasizing that for the majority of Americans, the stock market doesn't accurately reflect their personal economic realities, even if other indicators are positive.
The idea that the stock market and the economy are not the same thing is not new or controversial. Equities index levels tell us about the changing expectations of future profits (and reflexively expectations on central bank rates), not about the condition of the overall economy. I.e. there is a fundamental disconnect between financial markets and the real economy. Simply put, the causal relationship between the stock market (forward looking) and the real economy is tenuous at best.
Let's look at the data. The Federal Reserve reports that the wealthiest 10% of American households own about 88% of all stocks, leaving just 12% for the rest of the population [1]. So while the S&P 500 may be up an impressive 13% year-to-date, the benefits are disproportionately concentrated among a small, affluent segment of society.
You make a big deal about the contradiction between stock ownership and market perception surveys. But that just proves what I'm saying! If ~62% of people supposedly own stocks, but half think the market is down, then obviously those stock gains aren't making a real difference in their lives.
This disconnect likely stems from the fact that for many households, their stock holdings are relatively modest. The median family might have around $40,000 invested in stocks. A 13% ytd increase in their portfolio value (assuming indexed to S&P500 for 2024) would equate to a $5,200 gain. While certainly welcome, this incremental growth can easily be overshadowed by broader economic pressures like inflation or slow wage growth.
The article does acknowledge positive indicators like GDP growth and job creation. However, it also recognizes the ongoing challenges many Americans face, such as high prices and the expiration of stimulus support. In the context of these everyday financial realities, stock market performance often feels disconnected from the typical household's economic health.
The fact remains, for the vast majority of Americans, stock market fluctuations have limited bearing on their economic well-being.
[1]: Federal Reserve - "Distributional Financial Accounts" https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
It’s kind of funny how this is baked into the economic orthodoxy. It’s definitely not that admitting a recession or high inflation makes the people in power look bad, no no, us not admitting it is actually good for you and you should thank us!
Wife and I used to spend around $350/mo in groceries pre-covid. Now we would have to spend a little over $500 for the same food.
BTW 50% increase over 5 years is only 8% annually
And at the same time, there is a huge number of job offers. If I wanted to quit my job, have 3 months of vacation, and look for another job again, I could get it quickly provided I accepted a 20% lower salary. This might sound bad, but frankly this is still an excellent salary for me. In contrast to people in non-tech sectors, I really have no reason to complain about.
Low "Unemployment rate" sounds nice until you realize how many of these jobs are low wage and part-time (no benefits) although the workers need full-time employment.
Exploitation is at an all-time high, and it's no surprise to anyond that the media isn't reporting on that.
Edit. When there's a 100 workers looking for jobs, the gov can limit the work week to 3 days and the work day to 6 hours, and call it full time employment. The rich, who want to exploit these workers, will have to bend and hire all the 100 to do the amount of work they need. Alternatively, the gov can step aside and let the rich hire just 50 workers, work them to the bone and keep the rest 50 unemployed, desperate for any work on any terms.
"Biden" (the Democrats I suppose) have certainly failed to reverse the advancement of the oligarchs over the last half century or so, and I suppose it's worth criticizing them for that, but to be fair, they have been opposed at every turn by a party that is single-mindedly obsessed with giving more to those who already have the most.
It looks pretty likely that Trump and the Republicans will do well in the coming election, and it will at least be interesting to watch to see if the sentiment re-aligns with the economic data in the next term, but I suspect long-term it will simply increase the loops that drive inequality ever higher; another high-income tax cut isn't going to help anything.
The ones that can’t code or didn’t learn modern skills like container orchestration are seeing the skill floor drop with companies migrating to SaaS everything and laying off teams, and the ones that learned are called infrastructure/devops engineers and easily make six figures. Sysadmin roles that used to pay 100k+ are now 20-25/hr at most businesses because they are just glorified office managers in 2024.
Companies are all trying to be like Amazon now, they want easily trained and replaceable people, so unless you work in a high skill ceiling job you are going to just be paid less. Even teachers are just glorified daycare workers these days. The good days are over for most people who thought the good times would never end.
As for tech, a lot of companies want everyone to be fungible for the cheapest price as you mentioned. It’s not a market where people feel safe to takes risks or innovate for someone else’s firm, considering there is no amount of loyalty that can keep you from getting laid off.
This is kind of interesting. It would be more interesting to know how that misperception has changed over time. I suspect that at any given time half of people wouldn't correctly guess whether the S&P was up or down.
“The S&P 500 is up 13% this year” 13% for the rich is millions. 13% for the poor is (metaphorical) pennies
“62% of Americans own stocks, mostly through retirement and investing accounts” I own stocks, $170 worth to be exact. Not a very helpful metric when the gap in ownership is so large.
“to think many people are just too dumb to know how good they have it.” Damn.
“even if the annual rate of change is now more benign” What was that saying? Once you start using a metric as a goal, it ceases to be a good metric?
“Now, do endless surveys asking people their opinions on the economy even matter? If Biden wins reelection in November, maybe not.” Surprised they made it this clear. Once you’re used to win the election, you don’t matter anymore (no matter which candidate wins)
Seriously, how out of touch can and tone deaf can you be?
Edit: at least tell me why I’m being downvoted…
* Wages are staying ahead of inflation
* Low Unemployment
* Wall street is doing good
But, for not 5% "top" people, the economy looks terrible because:
* They see food, gas, housing and interest rates raising a lot.
* Even though their wages are ahead of inflation, they do not know or understand this. Their bank accounts may be increasing, but they cannot and will not do 1+1. It is much easier to see raising costs than raising savings.
* Job security is non-existent. Even though you may have a decent job and if you get laid you can find a new job relatively quickly. People do not feel secure and are afraid of loosing work, so they may be putting in extra hours to avoid that, thus no free time.
* Billionaires, they are always hearing about these people and that makes them feel even worse.
The Democrats are ignoring that and have no response to it. The GOP is great at pushing the bad economy and hate towards immigrants. So, when people feel insecure, they are easily pushed into the MAGA state many people are in.