Ah, yes. I read a good book about stories like this:
The Ministry of Plenty's forecast had estimated the output of boots for the quarter at 145 million pairs. The actual output was given as sixty-two millions. Winston, however, in rewriting the forecast, marked the figure down to fifty-seven millions, so as to allow for the usual claim that the quota had been overfulfilled. In any case, sixty-two millions was no nearer the truth than fifty-seven millions, or than 145 millions. Very likely no boots had been produced at all. Likelier still, nobody knew how many had been produced, much less cared. All one knew was that every quarter astronomical numbers of boots were produced on paper, while perhaps half the population of Oceania went barefoot.
The United States has more material surplus than any country in the history of the world.
This is a really bad example because you could try to make the case that per-capita income doesn't accurately capture the difficulty obtaining education/healthcare/housing, but no serious person is contesting we have access to a vast quantity of high-quality consumer goods for peanuts.
I’ll contest that! By what metric do we have access to a vast quantity of high quality consumer goods? Medicine, housing, and food are some consumer goods that many Americans have trouble affording. Plus, the number of Americans with replicators is 0; we’re an extremely, extremely underdeveloped nation in that regard, and have lots of room to move up.
No, I wouldn’t rather live in China/russia/medieval Europe/on a desert island/whatever, to cut off any confusion there. I’m just saying “we’re rich comparatively” isn’t very useful in this case
This would be true if we hadn't been living in a sci-fi novel for the past few decades/centuries... I think looking forward is a critical step at this inflection point in our path.
Rich is always, by definition, a relative/comparative term. As evident by you making _comparative_ statements about what Americans have to.. fictional machines from star trek? Saying comparative statements about wealth aren't useful is... even less useful? What are we supposed to do, gauge things by an absolute scale? That becomes useless pretty quickly unless it's updated to be _relative_ to some new standard (aka being comparative).
So the metric by which Americans have an improved "access to vast quantity of high quality consumer goods" would be, from the article, the fact that Americans have had their purchasing power increase by 3% relative to other nations, which saw purchasing power of their citizens decrease.
Things like housing and medicine are generally going to be expensive at any point in time (due to supply/demand and cost of development, respectively) but the increase in purchasing power outlined in the article is a pretty good (not perfect) proxy for Americans ability to acquire consumer goods.
Are you accusing someone (who?) of falsifying data? Where/when/why/who/how?
It's not like the indicators are in some confusing disagreement. Everything points toward the economy being ridiculously hot.
Of course there's one glaring exception: the people's vibes. Of course, vibes are highly malleable by media, culture, and internet commentators ambiguously gesturing toward the a gargantuan fraud with tens of thousands of individuals quietly acting in concert.
Yea I really like the quote the OP references, but it's not clear to me who is playing the role of the "ministry of plenty"? The author? The fed? And what stats referenced in the article are they accusing of having been retroactively revised (aside from the common minor adjustments that trail headline news by ~1month, which would already be included in the stats this article references).
It's great that the US Economy is performing so much better than the rest of the world, but what good is that if people don't feel like it's going well?
> The most recent report found that, from 2019 to 2022, the net worth of the median household increased by 37 percent, from about $141,000 to $192,000, adjusted for inflation.
> An important caveat to the wealth statistics is that much of the recent increase came from the surge in home prices.
These are two sides to the same coin. Rising home values are a zero-sum game. It makes people look wealthier on paper, but there's nothing good that comes from gains in housing prices.
I think the standard approach is you sell your house after raising a family and retiring because you don't need the additional space but a young couple starting a family does. Then you and you partner buy/rent a small condo on the beach and enjoy retirement.
All the older people I know still have the same homes they had when their kids left home 20 years ago. Some of them have the retirement home near a beach, but it's in addition to the one they raised their kids in.
"Aging in place" is a big part of the current housing situation. Older people are occupying a lot more house than they used to. The market may solve this by having multi-generational households again.
The problem is that most US houses are quite poor for multi-generational living, as they generally revolve around a single common area with an open design. The traditional multi-family house has been gobbled up by the rental market, and now even the in-law apartment has been gobbled up by short term rentals. It's possible to build new in-law apartments with conditional approval from the city that it will only be used by related family, but that just dovetails into the problem of needing to build.
There's also the general problem that the costs of system-legible senior care have shot up to ridiculous levels. I'm currently casually caring for my aunt, who lives by herself in a bona-fide two family. She keeps ideating about "assisted living" but from what I've gathered it would be essentially selling her house to buy in with a large lump payment, and then still paying stiff monthly fees larger than her current expenses (which includes part-time in home help). Essentially the assisted livings have come under control of the same type of economic vampires that have set up shop everywhere else, making it prohibitive for her to move on and consume less housing.
US Home Ownership Rate: 65.6%. It may be a zero sum game (debatable) - but 65% are one side of the coin with a huge pile of cash and 35% are on the other with a lot less.
As a wise man once said - the good of the many outweigh the needs of the few
Probably worth noting that homes are owned by old people, and the old people are in control of the government, making policy that is self serving to the grest detriment of younger Americans. For example social security will end in about 10-15 years, after those old people like Mitch McConnel have gone to bed. Meanwhile the youngsters are paying huge sums into the ponzi scheme, and the cost to service US debt remains an unsolved problem. There was a good Ted talk recently by Scott Galloway highlighting just how badly the youth are getting screwed. I disagree with most all of his proferred solutions but he did a great job of describing the issue.
Here is the talk. Every multigenerational American family should be forced to watch this and discuss the ethical implications of each peesons vote in future elections.
Social security isn't ending in 10-15 years, it just won't be able to pay 100% of promised benefits, only about 80%. In reality, sometime in the next 10 years there will be new legislation to fix it, which will probably result in increasing the retirement age (resulting in a small cut in benefits), higher SS taxes particularly on high earners, and other formula tweaks.
So they'll just move the goalposts, not remove them entirely? Isn't it a bit difficult to make accurate projections when the current state of things is totally unprecedented? In any case, thanks for giving me hope. Hope helps me cope. I really shouldn't doubt our political class. They always do right in the end. God bless America.
Yes the goalposts will be moved. But even if they don't (almost 0% chance of this), the worst case scenario is an across-the-board 20% benefit cut. Nobody was ever predicting or seriously expecting Social Security to just go away.
McConnell is one of the few people in elected office who has been trying—with little success—to make Social Security fiscally sustainable. Weird that you’re calling him out.
The truth is that sub-replacement TFR in developed countries is going to lead to problems of varying degrees, and that the inevitable failure of old age entitlements are going to be the least of our problems.
> As a wise man once said - the good of the many outweigh the needs of the few
Ah utilitarianism - much like communism, it's a good idea in theory, but bad in practice.
Here in Canada, the young are about to vote conservative(1) over the alternatives for the first time in 40 years for one simple reason: because the entire housing market, either to own or rent, has become completely unaffordable (1 bedrooms in the greater Toronto area rarely go for less than $2500). My first apartment alone in the central part of the city 20 years ago was $700 for a decent one, and starving artists/students/etc could find lesser ones for a lot less.
The home ownership rate by age 30 has gone from well over 50% in 2000 to 36.5% today. The needs of the few are becoming the needs of the majority and they're not in a good mood electorally.
Also, Switzerland has a home ownership rate of barely 40% (in fact if you own a home, you can get taxed on the potential rental income it COULD provide whether you derive said income or not); the result is the Swiss are more mobile for jobs and have more of their wealth tied to other assets and is one of the per capita wealthiest larger economies in the world.
(1) This is not meant to be a pro/anti-conservative statement, merely a point on the sea-change of what can happen when you "protect" the wealth of one group to the detriment of others.
If Canadians really wanted to fix the housing market, they'd vote NDP. Vancouver went from twice Toronto prices to comparable-to-Toronto prices under NDP government. Meanwhile the Ontario Conservatives refuse to bring in sensible policies like allowing 4-plexes in single unit zones.
The local councillors in Toronto who are most opposed to 4-plexes tend to be ndp affiliated “champaign socialists” who want to stop “greedy developers” from destroying “family homes”.
There’s also a more suburban right leaning group who don’t want the “socialist downtowners” to densify their car oriented way of life (Doug Ford comes from this area).
It’s really quite sad and the end result is there are a handful of areas that get super dense development and there’s relatively little midrise.
People don't feel like it's going well because they've been getting sticker shock every time they go to the grocery store for the last 2 years. Regardless of GDP numbers, or Wall Street turning record profits, or medium income growing, people aren't used to and don't like seeing a carton of eggs selling for 8 or 9 dollars.
At the moment, yes. For a short while, it was very hard to find eggs for less than $5-6 a dozen due to a supply issue. Since then, some egg prices have fallen back to normal. Some egg producers, however, have decided that this new price is just fine for them, so you can still see that price on the shelf.
The cheapest eggs at the store in my California suburb are 2x the nominal average. Looked up the online prices and averaged all the available dozens to find the "price average". It's the square of the nominal average ($8.20)
While I agree with you to an extent, this is not a very good way to check actual in-store prices. Most grocery stores charge a different rate for products that are delivered or even curbsided than they do if you go to the store and buy it yourself. This is true even if you go directly vs. going through an intermediary like DoorDash.
I live in coastal CA and the cheapest eggs at my local market are $3.49/dozen. Trader Joes and Costco are closer to $2.20/dozen if you just want plain white eggs. The moment you go organic, the cheapest is Costco at about $4/dozen.
Edit: Just to be clear, at Costco you buy 2 dozen rather than 1 and I've divided the price to a single dozen.
For other stores the online price might be different from the in-store price. But I think for Safeway, the online price is the same as the in-store price (which is why the webpage says "Shopping at <address>").
I can't confirm if the price is the same or not, but their terms[1] specifically mention that the price can be different.
> Prices for Offerings you order for delivery or pickup through the Online Grocery Ordering Service may be higher than the prices for such Offerings in our physical stores.
Most outlets I've seen (eg. Target) are the same in that they just list a higher price on the website than it costs in-store and they're upfront about this. It takes me 20-25 minutes of in-store picking to shop including checkout for my weekly groceries. Even if that is done by a minimum wage worker (~$17/hr here) that's ~$6-8 of service on top of them bringing it out to the curb. In addition, eggs are usually specially packed in their own bag (frequently with a sticker on the bag labeled "eggs") when they're bought online and curbsided. It seems a bit naive to me to think that all this service would just be included/free.
People don't feel like it's going well because all the reporting on the high inflation of mid to late 2021 into early 2023 just kept on going with that same narrative after inflation stopped being high, and now people frequently read posts about how eggs cost like three times as much as they actually cost, and lots of people just blindly follow that narrative.
A huge part of this is weak understanding (and poor explanation by the media) of inflation vs. price level. Inflation has decreased to normal levels, but most prices (i.e. those not affected by supply-chain issues) aren't going to go back to 2019 levels.
Inflation was so low for so long that people didn't have to think about it. Only people who lived through the 70's probably have meaningful firsthand experience. Everyone experiencing it today will consider it for the rest of their lives.
But I didn't live through the 70s, and I still learned what inflation is and how it differs from "price level", because we covered basic economics in high school...
I really don't buy this thing about how things are confusing unless you have already experienced them!
To have the buying power that $200k/yr salary had in the 80s you’d need a $600k/yr salary now
Math tricks; mostly loans with long term repayment obligations to a rent seeker, media obfuscation, have been used to hide the deflation of purchase power
We know where it all went. Warren Buffet said the solution is simple, the people need to demand government raise his taxes.
But the public thinks making $200k in 2024 puts them beyond the $60k/yr their parents made in 1990 so it’s cool
Lots of factors to consider when comparing across those time periods. Hedonic adjustment is huge, and mortgage interest rates averaged over 13%. I'd much (much) rather live in 2024 and make $200k than live in 1985 and make $60k.
In most people's mind, they see that some product that was $9.99 pre-pandemic is now $13.49 and conclude that "inflation is 35%". Educated people understand that this is really four years of 7% average inflation.
I think a good degree of this problem is political as well. People who hold unfavorable views of their leadership are more likely to think of inflation in cumulative terms, as well as ignoring wage growth.
But this isn't higher education level material, is it? Is this not part of the curriculum in high school? I know it's possible to drop out of high school, but most people finish.
Is "what does the word inflation mean?" really not something that it can be assumed everyone has been taught?
If you did, think back on all the kids that were your classmates. Not just the ones in the honors and AP courses you probably took, but all of them. Do you really find it surprising that they didn't learn or retain various bits of seemingly simple information?
If you went to some kind of magnet school with only the smart kids, take my word for it - a huge percentage of 14-17 year olds have absolutely no interest in learning and remembering what inflation is and how it works. Some of them will find some internal curiosity later in life, but plenty will never change much.
This is a minor pet peeve of mine developed from too much time spent reading internet comments years ago where young people would complain "why wasn't XYZ taught in school??". Very often the answer is - It was, but you were a bad student.
I think we need a word for "price levels are high". I think some people are using "inflation" in this sense. And then there are others who are using a strict, narrow definition of "inflation" as propaganda (as-in, news articles where the implication that you should be happy if inflation is down for a quarter, regardless of whether prices are still high). Maybe there is an appropriate loan word from a different language? Certainly there have been other countries which have experienced much worse bouts of inflation (and hyper-inflation). I'd like to hear some suggestions for possible replacement words or phrases. This still won't cure the problem, because even if you say something specific, like "prices are high", there will always be someone who comes around and says, "but inflation is low". Yeah, but that's not what we are talking about.
The problem with this is that "the prices are high", on its own, is meaningless.
There is not some ideal price level that prices fluctuate around such that they are "low" when beneath that level, and "high" when above it. That's just not a thing, it's not how economies work.
So what do you mean when you say "price levels are high"? I think what you and I and most people mean when we say this sort of thing is something like, "I have an estimate anchored in my mind for what the prices of things are, and they are currently noticeably higher than that". But where do those price level "anchors" we all have in our minds come from? From recent experience, pretty much.
But by introducing "recent experience" into this, we now have a time component. And that's where inflation - the change in price levels over time - comes in. This is why people immediately start talking about inflation when you say "price levels are high". It just doesn't make sense to talk about price levels without a baseline to compare to, and that is inevitably a comparison between price levels at different times, so now we're talking about a change over time, which means we're talking about inflation, not just price level.
So what I think people really mean by a statement like "price levels are high" is something like "price levels have increased faster than I have mentally updated the price levels I'm anchored on". That is, there is some rate of inflation that gets lost in the noise of our mental estimates over time, but at some point, it becomes noticeable. (And of course this happens at a different point for different people and those people have difference "noise" tolerance across different things they buy.)
Using everyone's favorite bad example of egg prices, if they cost $3 one year, am I going to notice if they cost a nickel or a dime more the next year? That's about 2% to 3% inflation, and no, I'm probably not going to notice; they still cost about $3. But if inflation is closer to 20% for that year, now they cost $3.60, and that's starting to feel more like $4, which is way more!
Then the other thing is that I think maybe we actually should be reporting inflation in longer time horizons. Something I think I've learned from this period is that people don't update these mental "anchors" for price levels symmetrically; we notice more quickly when prices go up a lot, and take longer than that to "get used to" the new level. So maybe it's a 3 year comparison or even a 5 year comparison that would better reflect how people feel about price levels.
For instance, we could say "the 5-year inflation is at about 23%, which is about 4% annualized", or "3-year inflation is at about 16%, which is about 5% annualized". Importantly, you can't directly compare the 5-year number to the 3-year number, only the annualized rates are comparable, but you can see how the long-range numbers each evolve over time. For instance, the 5-year inflation in 2020 was just 9.2% (using this calculator[0] for all of these), which is only 1.74% annualized! This is a huge difference from the current numbers, and I think that has a lot to do with how people are feeling about price levels.
To complicate it even further, I think how people really anchor things - though this is useless for baseline comparisons over time - is not on a fixed time-range, but instead based on the most recent major event, like the pandemic, or the "great recession" before that, or 9/11 before that, etc. You can see that in most of the current discussions on this, where the word "pandemic" pretty much always comes up. We're coming up on 5 years since that, so I think the 5-year inflation comparison captures it well, but we may still be anchoring on price levels from before the pandemic another three or five years from now if that&...
Doesn't debt, both national and personal, come into this equation in a big way, though, as far as anchors?
Like, if I bought a house 10 years ago for $50k (which I actually did), paying off $50k with today's dollars seems like no big deal compared to yesterday's dollars. $50k today buys a new car, not a (admittedly on the inexpensive end even at the time) new house.
If the prices of other things are growing a lot faster than the interest rate I got on that house (which I'd think of as the expected time value of that money over the life of the mortgage), it makes sems that the prices are "high" relative to that expectation.
I think something similar happens on the scale of the national debt. Adding a trillion dollars now isn't nearly as big a deal as adding a trillion dollars the first time, because "prices are high" for both labor and goods (income and expenses, from the average citizen's perspective).
What time frame are you calling "during the pandemic" here? The period of high inflation started sometime in the second half of 2021, which is what I usually think of as the beginning of the post-pandemic period. That is, I think the inflation happened after the pandemic (though I believe because of the pandemic and the response to it).
I believe your grocery bill went up that much during the period of inflation, though it's a bit higher than the aggregate inflation data nationwide, it's not too far off.
But that doesn't tell us anything about how quickly prices are rising now, which is what "inflation" is.
Saying "prices are higher now than they were in the past" is not the same as saying "inflation is high right now". And both statements are entirely meaningless without defining the time period being discussed.
We could have massive deflation month to month, and it would still be the case that prices are many times higher than they were in the 50s. It's just an apples to oranges comparison that provides no insight.
Inflation is typically reported on either by looking at the previous 12 months, or by looking at the previous month and "annualizing" it (calculating what the result would be of 12 repetitions of that month's rate).
But clearly people's anchoring on price levels is not all that well aligned with that. I'm also still anchored on what I think things should cost based on what they cost "before the pandemic".
But eventually we'll all get used to the new price levels, and our kids will laugh about how there used to be a whole "dollar menu" at fast food restaurants, just like we laugh about the idea of "nickel and dime stores" and only paying "two bits" (which is a quarter, for some reason) for a shave and a haircut.
But the question of how long this period of getting used to new price levels requires, and why, is fascinating, and I'd like to read a good book about it :)
(Edit to add: I ignored the house and childcare price aspects of this, and I fundamentally agree that it's the "one of these things is not like the others" that explains a lot of the dissatisfaction that people - especially younger people and people with young kids - are feeling.)
Ok yeah fair enough! I went and looked at the hospitalizations and excess deaths data, and I was definitely thinking of late 2022 rather than late 2021, so still half a year or so earlier than the end of the WHO's "public health emergency", but over a year later than what I said in my comment!
What's really strange to me is that during COVID, the prices at our Safeway spiked and stayed high. The prices at our WinCo barely budged. And they're still low. These stores are 10 minutes apart.
Yeah agreed, I think looking at wealth is a very poor way to understand the economy. Income vs. expenses is what matters for the vast majority of people.
> Rising home values are a zero-sum game. It makes people look wealthier on paper
I had a thought the other day and HN seems like a good place to ask. And I understand this idea is just straight up out there but I am honestly asking.
What would/might happen if we put a freeze on home prices? Assuming a magic wand could be waved.
People would just continue the already established practice of paying part of the sum in cash to dodge taxes, or in this case to work around the imposed limit.
If housing prices were capped, as in this proposal, selling a house would immediately be a bad economic decision because you would, by design, be giving up something for less than it's worth. People would rationally respond to this by selling less often. The distribution of homeowners over time would then change very little - i.e., in 20 years time, mostly the same people who own homes would still have them, and people who didn't have a home would be economically locked out of homeownership.
You see this dynamic play out exactly with rent control. People are (rationally) very reluctant to leave rent controlled apartments, so rental housing basically sticks with the people who had it at the time rent control was introduced and newcomers are kind of screwed.
There are two economies. People who got on the housing ladder before the rate increases after the huge jump in home prices and everybody else. The first group is doing great, the other group is screwed. Once again we've pulled the ladder on young people.
As part of the first group, we're still not doing great. Home insurance rates and property taxes have gone through the roof. My mortgage costs 25% more now than it did two years ago.
I could have (should have) bought a house before the pandemic but I wasnt quite ready yet. Now housing affordability is so bad I have to save multiple hundreds of thousands more dollars to afford the same house in 2019. That's on top of all my other expenses like rent also skyrocketing. I make more money than ever and am probably close to my peak earnings yet I feel poorer than ever.
Homeowners are objectively doing great in the US. Yes prices are up, but real wages are up too, especially for the bottom quartile. Obviously there are exceptions, but most people are making more than they did pre pandemic adjusted for inflation.
It's important to note that this only means that households that own real estate are seeing their net worth increase. Renters are seeing their bills go up.
So landlords are doing great, homeowners get extra paper wealth, and most millennials see their cost of living increase.
And on top of that, we're getting price gouged by grocery cartels.
The real battle is convincing people that none of this has anything to do with inflation.
That goes too far. Housing can improve through new construction and remodeling, or deteriorate through neglect, so that doesn't seem zero-sum to me.
Some price increases are due to demand alone, but demand also results in at least some improvements to supply. House flippers can do real work on the house.
The housing market serves people with more money. This can be a problem for people who would rather have lower rent than a nicer place.
It's zero sum because increases in home value don't do anything for the home owner. They have to sell to liquidate that value, but then they need to buy another place to live. But since housing inflation is roughly even across regions, all of the proceeds from the sale of their current home have to be rolled back into their new one.
If a family moves into a $100k house, lives there for five years and sells it for $150k, they might have made $50k. But when they move into a $300k house that was worth $200k five years ago, their situation hasn't improved.
The only people who benefit are the odd ducks who buy in coastal California, then sell to move to Iowa.
I think this is assuming the conclusion. If you assume houses didn't change at all then sure, the "value" is the same as before even though the price went up, and home owners didn't see any benefit.
Sometimes that's true for a particular house, but why assume that overall, no houses changed? Contractors get paid to do things. People do work on their houses.
Also, the value of a thing is often due to context rather than the thing itself. The neighborhood could really have gotten better over time, even if the house itself didn't change. That counts as a benefit. Maybe not one you wanted, though.
What you're describing is inflation, not a zero-sum game. The price of something is not the same as its value. If you have a fixed amount of somethings but their price is increasing, that's inflation in a zero-sum game. But there isn't fundamentally a fixed amount of housing; it's just that in many markets, the amount of housing isn't growing fast enough to seem like it isn't a fixed amount. But changes to laws and policies could start to increase the amount of housing.
> Rising home values are a zero-sum game. It makes people look wealthier on paper, but there's nothing good that comes from gains in housing prices.
This is oversimplifying. A rise in housing prices should lead the more construction of more housing, if costs stay relatively the same, and indeed the inflation in housing prices has grown far faster than the cost of labor or building materials. We have a zero-sum game because supply is restricted instead of allowing the market to respond by producing more housing. Sometimes this is due to NIMBYism, sometimes just legacy zoning practices. China has the opposite problem right now because their central planning built too much housing. But there's nothing special about housing that makes it a zero-sum game. For sure, land is basically a zero-sum game (you could blast apart mountains or build artificial islands, but that's not usually financially feasible), but most countries have large apartment towers that expand the amount of housing available despite the zero-sum game for land.
And America has so much land compared to most countries. It's not even funny. It's just mostly wasted.
When things get bad enough, the market finds a way. People may decide that owning in a recently less desirable area (e.g. Detroit) outweighs renting in a more desirable one.
In a way, it already did, which is why remote work is so much more popular now. If you don't need to show up to an office, you can purchase cheaper housing in a place further away from an urban metro.
>Rising home values are a zero-sum game. It makes people look wealthier on paper, but there's nothing good that comes from gains in housing prices.
If I substitute the word "stock" for the word "housing", would you still agree with the statement? If not, what differentiates housing-as-an-asset from stocks-as-an-asset from a wealth perspective? It's not like we can't have more of either of them.
No. I own plenty of stock and a house. My house increasing in value has done nothing for me except raise my property taxes.
The increased value of my stock holdings has resulted in a very nice increase in my quarterly dividend distribution. Thus, I see an increase in stock value the same way I see any other increase in my income.
I could sell my house an pocket those gains, but I'd have to buy another house that has also experienced the same, or even greater price increases. Or rent smaller apartment at 2-3x my monthly mortgage.
In reality, calling housing inflation "zero sum" is being generous. It's pretty much an economic drag on society. Having the price of housing get cheaper over time would probably be better.
> housing-as-an-asset from stocks-as-an-asset
Of course these are both "assets." But stocks are an income producing investment while my house is more akin to my car: it costs me money but provides me with necessary functionality. If I owned rental properties, then I'd call those income producing investments, but I don't own rentals.
> It's great that the US Economy is performing so much better than the rest of the world, but what good is that if people don't feel like it's going well?
I can't wait to see how all of this will come crashing down. I am old enough to understand that it will be some unique way that no one will see coming. Then there will be a few knuckleheads claiming they saw it all along after the fact.
There's a fun quote about predicting recessions, something to the effect of: "he's so good at predicting market implosions, he's gotten it right 7 of the last 2 times."
The way most bubbles end is that a decent amount of people say "this trend can't go on forever" while everyone else screams "LALALALA heard that before but the trend is still going, hope you like being poor".
No one knows EXACTLY when the trend will end - which you generally need to get right to make a lot of money.
But most people with a brain know an unsustainable trend will not last forever.
Could one point explain the other? A basically frozen real estate market prevented a lot of people from buying real estate - as a result they spent more money on consumer goods, which boosted salaries of low-income groups? If that's the case then once the real estate market unfreezes and people spend more on their homes rather than consumption we'll see the economy tipping over? Both because house prices stagnate (or even sink), thus making existing home owners feel less rich and because new home owners have less money to spend (because their money is going to the new mortgage).
Perception is reality. It seems that changing the direction of a trillion dollar economy ended up being easier than peoples feelings about it. "Truthiness" is an appropriate word here. The rapid step-change in the price of goods (robbery!) is overpowering the less visible gains in wages (hard-earned by the sweat of my brow!).
> Maybe what people feel is more real / closer to practical reality than the numbers the elites point to argue otherwise?
Bingo.
People who argue the economy is doing well based on some coarse high-level numbers are missing a lot, because the numbers are coarse and high-level. The most charitable interpretation is they're confusing the map for the territory.
Definitely: "from the end of 2019 to the end of 2023, the lowest-paid decile of workers saw their wages rise four times faster than middle-class workers and more than 10 times faster than the richest decile."
That said, 1% of one million is ~double 10% of $45,000.
* Gov't spending is out of control and THE INTEREST on our National Debt just surpassed military spending. Which means the fed will have to print money or issue treasury bonds to cover the U.S. massive defecit every year, which will increase inflation continuously.
Lessons to be learned:
1. Inflation is never going down
2. House prices are never going down
3. There is not a healthy job market if you are a native born citizen as there's a war on wages
The cost of a lot of things, dining out in particular, were kept in check for decades because wages for labor were suppressed. The true costs of "everyday needs" were borne by labor to the benefit of the consumer (and arguably, the business owner).
Now that we can't cheaply exploit labor post pandemic, costs for the consumer are going up. The rising incomes at the bottom rungs of the economic ladder, alongside rapidly (and long-running) spiking costs of real estate, are squeezing consumers as they buy groceries, gas, and yes, fast food.
Putting the brakes on the costs of those is probably going to look like squeezing wages on low income workers once more.
The US is stumbling towards an election and everything will be held together with bubble gum and string until then. I can’t fathom why either party candidate wants to be in that position.
It’s going to be a fucking disaster of global proportions when the gum dries up.
> From the end of 2019 to the end of 2023, U.S. GDP grew by 8.2 percent...
This is a masterclass in deception. Here's the actual, plain English translation:
"U.S. GDP growth averaged 2.05% during the four year period beginning in 2020."
But 2% GDP growth per year is subpar, and we're trying to make it sound great! Well, folks are familiar with annual GDP stats, so giving them annualized stats makes comparison easy. To prevent this easy comparison, we won't annualize it! Instead we'll say:
"U.S. GDP grew by 8.2% during the four year period beginning in 2020."
But there's still a problem! 8/2 makes for easy mental math. The reader can still easily realize that we're talking about a paltry 2% growth. How do we handle this? Easy! More obfuscation!
"From the end of 2019 to the end of 2023, U.S. GDP grew by 8.2 percent."
Now the readers is two operations away from being able to compare the data!
The greatest trick of all, of course, is that this odd formulation invites misinterpretation. Since we almost always talk about GDP growth in annualized terms, this sentence can easily be misread as saying "U.S. GDP grew at a rate of 8.2 percent from 2019-2023". In my opinion, this misinterpretation is practically demanded by context, as the actual (2%) figure does not fit into the glowing narrative at all.
That's because this isn't really an article about the economy – it's a Biden campaign message. Trump's message will be "you may not like me personally but the economy was better when I was president." The shills in the corporate media are already trying to offer a rebuttal.
I don't disagree but I still cannot fathom why the Democratic party is so ham fisted with their arguments. So much of the price inflation we experienced over the past four years is due to monetary inflation that was created under Trump. The ongoing income tax increases were baked into law by the Trump administration in 2017. The Republican party's strategy has basically become to wreck things, fiscally and socially, and then blame the Democrats when the delayed results become apparent. Personally I'm a libertarian who doesn't buy into the dogma of either duopoly party, but I'm voting conservative (which means Democrat these days) until the Trumpism death spiral has finished running its course.
You're gonna be seeing articles like this more and more the closer we get to the election. The economy is the top issue this election because despite the image the current administration is trying to paint, people are hurting. I dont know how effective telling people GDP and average wealth is up is going to be when they see they have less money leftover after paying more and more for housing and groceries.
nit: 8.2% over 4 years is 1.99% per year (multiplicative, not additive).
I think the ultimate problem is that regardless of the system-legible numbers looking great, it's ultimately just a paperclip optimizer that doesn't reflect people's day to day experiences. There's another article on the front page about "economic termites" and I think that doesn't even capture the full extent of the problem because it's still narrowly focused on prices. Whereas what is happening is that every business with a captive market (which is basically every business these days, after decades of mergers running amok and regulatory capture red tape) is spreadsheet-optimizing into an ever-worse customer experience.
Don't motte-and-bailey me, dude. They're not saying "it's bad but everyone is doing bad", they're saying "we're killing it!"
It is intentionally deceptive.
> If the United States’ economy were an athlete, right now it would be peak LeBron James. If it were a pop star, it would be peak Taylor Swift. Four years ago, the pandemic temporarily brought much of the world economy to a halt. Since then, America’s economic performance has left other countries in the dust and even broken some of its own records.
This article is a great example of how macroeconomic indicators are a poor measure of overall economic health. The real question is who is actually served by an economy like this.
The basic bargain at the heart of the United States means that you put up with bad urban planning, public infrastructure and a criminal healthcare system in exchange for getting to drive a huge vehicle, cheap food and consumer goods and a detached home with a big yard.
Now you get all the bad stuff, plus expensive food, unaffordable transportation options and a bidding war with Blackrock for your starter home in the midwest.
When a metric becomes a target it ceases to be a good metric.
Someone on HN posited that the models we use for economic performance are overfitted, that they no longer actually gauge the performance of the economy. The economy, after all, is about finding optimal distribution of resources, and ultimately, all resources are produced for the benefit of human beings, so if people's experience on the ground, in reality, is that things are bad, maybe quit telling them they're wrong and go find out what's wrong with your models or measures? Just a wild idea, what do I know.
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[ 3.2 ms ] story [ 187 ms ] threadThe Ministry of Plenty's forecast had estimated the output of boots for the quarter at 145 million pairs. The actual output was given as sixty-two millions. Winston, however, in rewriting the forecast, marked the figure down to fifty-seven millions, so as to allow for the usual claim that the quota had been overfulfilled. In any case, sixty-two millions was no nearer the truth than fifty-seven millions, or than 145 millions. Very likely no boots had been produced at all. Likelier still, nobody knew how many had been produced, much less cared. All one knew was that every quarter astronomical numbers of boots were produced on paper, while perhaps half the population of Oceania went barefoot.
This is a really bad example because you could try to make the case that per-capita income doesn't accurately capture the difficulty obtaining education/healthcare/housing, but no serious person is contesting we have access to a vast quantity of high-quality consumer goods for peanuts.
No, I wouldn’t rather live in China/russia/medieval Europe/on a desert island/whatever, to cut off any confusion there. I’m just saying “we’re rich comparatively” isn’t very useful in this case
So the metric by which Americans have an improved "access to vast quantity of high quality consumer goods" would be, from the article, the fact that Americans have had their purchasing power increase by 3% relative to other nations, which saw purchasing power of their citizens decrease.
Things like housing and medicine are generally going to be expensive at any point in time (due to supply/demand and cost of development, respectively) but the increase in purchasing power outlined in the article is a pretty good (not perfect) proxy for Americans ability to acquire consumer goods.
It's not like the indicators are in some confusing disagreement. Everything points toward the economy being ridiculously hot.
Of course there's one glaring exception: the people's vibes. Of course, vibes are highly malleable by media, culture, and internet commentators ambiguously gesturing toward the a gargantuan fraud with tens of thousands of individuals quietly acting in concert.
> The most recent report found that, from 2019 to 2022, the net worth of the median household increased by 37 percent, from about $141,000 to $192,000, adjusted for inflation.
> An important caveat to the wealth statistics is that much of the recent increase came from the surge in home prices.
These are two sides to the same coin. Rising home values are a zero-sum game. It makes people look wealthier on paper, but there's nothing good that comes from gains in housing prices.
There's also the general problem that the costs of system-legible senior care have shot up to ridiculous levels. I'm currently casually caring for my aunt, who lives by herself in a bona-fide two family. She keeps ideating about "assisted living" but from what I've gathered it would be essentially selling her house to buy in with a large lump payment, and then still paying stiff monthly fees larger than her current expenses (which includes part-time in home help). Essentially the assisted livings have come under control of the same type of economic vampires that have set up shop everywhere else, making it prohibitive for her to move on and consume less housing.
US Home Ownership Rate: 65.6%. It may be a zero sum game (debatable) - but 65% are one side of the coin with a huge pile of cash and 35% are on the other with a lot less.
As a wise man once said - the good of the many outweigh the needs of the few
https://m.youtube.com/watch?v=qEJ4hkpQW8E
The truth is that sub-replacement TFR in developed countries is going to lead to problems of varying degrees, and that the inevitable failure of old age entitlements are going to be the least of our problems.
AKA, the tyranny of the majority.
Politicians: Comrades, our living conditions and pay constantly increase.
Citizens: Oh, that's very good for you.
Ah utilitarianism - much like communism, it's a good idea in theory, but bad in practice.
Here in Canada, the young are about to vote conservative(1) over the alternatives for the first time in 40 years for one simple reason: because the entire housing market, either to own or rent, has become completely unaffordable (1 bedrooms in the greater Toronto area rarely go for less than $2500). My first apartment alone in the central part of the city 20 years ago was $700 for a decent one, and starving artists/students/etc could find lesser ones for a lot less.
The home ownership rate by age 30 has gone from well over 50% in 2000 to 36.5% today. The needs of the few are becoming the needs of the majority and they're not in a good mood electorally.
Also, Switzerland has a home ownership rate of barely 40% (in fact if you own a home, you can get taxed on the potential rental income it COULD provide whether you derive said income or not); the result is the Swiss are more mobile for jobs and have more of their wealth tied to other assets and is one of the per capita wealthiest larger economies in the world.
(1) This is not meant to be a pro/anti-conservative statement, merely a point on the sea-change of what can happen when you "protect" the wealth of one group to the detriment of others.
There’s also a more suburban right leaning group who don’t want the “socialist downtowners” to densify their car oriented way of life (Doug Ford comes from this area).
It’s really quite sad and the end result is there are a handful of areas that get super dense development and there’s relatively little midrise.
Cars aren’t going away in North America. Full fucking stop. Pretending they will is an exercise in faux-righteous, virtue-signaling frustration.
They fight townhouses, for christ's sake: https://streetsoftoronto.com/real-estate-home-theatres-baske...
https://fred.stlouisfed.org/series/APU0000708111
https://pantryandlarder.com/eggspensive
Next, check what a case of Coke costs and come back and tell me sticker shock isn't a thing.
I live in coastal CA and the cheapest eggs at my local market are $3.49/dozen. Trader Joes and Costco are closer to $2.20/dozen if you just want plain white eggs. The moment you go organic, the cheapest is Costco at about $4/dozen.
Edit: Just to be clear, at Costco you buy 2 dozen rather than 1 and I've divided the price to a single dozen.
> Prices for Offerings you order for delivery or pickup through the Online Grocery Ordering Service may be higher than the prices for such Offerings in our physical stores.
Most outlets I've seen (eg. Target) are the same in that they just list a higher price on the website than it costs in-store and they're upfront about this. It takes me 20-25 minutes of in-store picking to shop including checkout for my weekly groceries. Even if that is done by a minimum wage worker (~$17/hr here) that's ~$6-8 of service on top of them bringing it out to the curb. In addition, eggs are usually specially packed in their own bag (frequently with a sticker on the bag labeled "eggs") when they're bought online and curbsided. It seems a bit naive to me to think that all this service would just be included/free.
[1] https://www.albertsonscompanies.com/policies-and-disclosures... (linked from safeway's footer)
I didn't learn about this in the media... I learned about it in school.
I really don't buy this thing about how things are confusing unless you have already experienced them!
Math tricks; mostly loans with long term repayment obligations to a rent seeker, media obfuscation, have been used to hide the deflation of purchase power
We know where it all went. Warren Buffet said the solution is simple, the people need to demand government raise his taxes.
But the public thinks making $200k in 2024 puts them beyond the $60k/yr their parents made in 1990 so it’s cool
I think a good degree of this problem is political as well. People who hold unfavorable views of their leadership are more likely to think of inflation in cumulative terms, as well as ignoring wage growth.
But this isn't higher education level material, is it? Is this not part of the curriculum in high school? I know it's possible to drop out of high school, but most people finish.
Is "what does the word inflation mean?" really not something that it can be assumed everyone has been taught?
If you did, think back on all the kids that were your classmates. Not just the ones in the honors and AP courses you probably took, but all of them. Do you really find it surprising that they didn't learn or retain various bits of seemingly simple information?
If you went to some kind of magnet school with only the smart kids, take my word for it - a huge percentage of 14-17 year olds have absolutely no interest in learning and remembering what inflation is and how it works. Some of them will find some internal curiosity later in life, but plenty will never change much.
This is a minor pet peeve of mine developed from too much time spent reading internet comments years ago where young people would complain "why wasn't XYZ taught in school??". Very often the answer is - It was, but you were a bad student.
There is not some ideal price level that prices fluctuate around such that they are "low" when beneath that level, and "high" when above it. That's just not a thing, it's not how economies work.
So what do you mean when you say "price levels are high"? I think what you and I and most people mean when we say this sort of thing is something like, "I have an estimate anchored in my mind for what the prices of things are, and they are currently noticeably higher than that". But where do those price level "anchors" we all have in our minds come from? From recent experience, pretty much.
But by introducing "recent experience" into this, we now have a time component. And that's where inflation - the change in price levels over time - comes in. This is why people immediately start talking about inflation when you say "price levels are high". It just doesn't make sense to talk about price levels without a baseline to compare to, and that is inevitably a comparison between price levels at different times, so now we're talking about a change over time, which means we're talking about inflation, not just price level.
So what I think people really mean by a statement like "price levels are high" is something like "price levels have increased faster than I have mentally updated the price levels I'm anchored on". That is, there is some rate of inflation that gets lost in the noise of our mental estimates over time, but at some point, it becomes noticeable. (And of course this happens at a different point for different people and those people have difference "noise" tolerance across different things they buy.)
Using everyone's favorite bad example of egg prices, if they cost $3 one year, am I going to notice if they cost a nickel or a dime more the next year? That's about 2% to 3% inflation, and no, I'm probably not going to notice; they still cost about $3. But if inflation is closer to 20% for that year, now they cost $3.60, and that's starting to feel more like $4, which is way more!
Then the other thing is that I think maybe we actually should be reporting inflation in longer time horizons. Something I think I've learned from this period is that people don't update these mental "anchors" for price levels symmetrically; we notice more quickly when prices go up a lot, and take longer than that to "get used to" the new level. So maybe it's a 3 year comparison or even a 5 year comparison that would better reflect how people feel about price levels.
For instance, we could say "the 5-year inflation is at about 23%, which is about 4% annualized", or "3-year inflation is at about 16%, which is about 5% annualized". Importantly, you can't directly compare the 5-year number to the 3-year number, only the annualized rates are comparable, but you can see how the long-range numbers each evolve over time. For instance, the 5-year inflation in 2020 was just 9.2% (using this calculator[0] for all of these), which is only 1.74% annualized! This is a huge difference from the current numbers, and I think that has a lot to do with how people are feeling about price levels.
To complicate it even further, I think how people really anchor things - though this is useless for baseline comparisons over time - is not on a fixed time-range, but instead based on the most recent major event, like the pandemic, or the "great recession" before that, or 9/11 before that, etc. You can see that in most of the current discussions on this, where the word "pandemic" pretty much always comes up. We're coming up on 5 years since that, so I think the 5-year inflation comparison captures it well, but we may still be anchoring on price levels from before the pandemic another three or five years from now if that&...
Like, if I bought a house 10 years ago for $50k (which I actually did), paying off $50k with today's dollars seems like no big deal compared to yesterday's dollars. $50k today buys a new car, not a (admittedly on the inexpensive end even at the time) new house.
If the prices of other things are growing a lot faster than the interest rate I got on that house (which I'd think of as the expected time value of that money over the life of the mortgage), it makes sems that the prices are "high" relative to that expectation.
I think something similar happens on the scale of the national debt. Adding a trillion dollars now isn't nearly as big a deal as adding a trillion dollars the first time, because "prices are high" for both labor and goods (income and expenses, from the average citizen's perspective).
My monthly groceries are slightly more expensive than during the pandemic and roughly 3x higher than pre pandemic.
My rent also went way up because the house I’m renting has more than doubled in value over the past few years.
Rent, groceries, and childcare accounts for close to 75% of my post taxes income.
I make well over double the national average, and if I have trouble saving for a house I have no clue how everyone else is managing.
I believe your grocery bill went up that much during the period of inflation, though it's a bit higher than the aggregate inflation data nationwide, it's not too far off.
But that doesn't tell us anything about how quickly prices are rising now, which is what "inflation" is.
Saying "prices are higher now than they were in the past" is not the same as saying "inflation is high right now". And both statements are entirely meaningless without defining the time period being discussed.
We could have massive deflation month to month, and it would still be the case that prices are many times higher than they were in the 50s. It's just an apples to oranges comparison that provides no insight.
Inflation is typically reported on either by looking at the previous 12 months, or by looking at the previous month and "annualizing" it (calculating what the result would be of 12 repetitions of that month's rate).
But clearly people's anchoring on price levels is not all that well aligned with that. I'm also still anchored on what I think things should cost based on what they cost "before the pandemic".
But eventually we'll all get used to the new price levels, and our kids will laugh about how there used to be a whole "dollar menu" at fast food restaurants, just like we laugh about the idea of "nickel and dime stores" and only paying "two bits" (which is a quarter, for some reason) for a shave and a haircut.
But the question of how long this period of getting used to new price levels requires, and why, is fascinating, and I'd like to read a good book about it :)
(Edit to add: I ignored the house and childcare price aspects of this, and I fundamentally agree that it's the "one of these things is not like the others" that explains a lot of the dissatisfaction that people - especially younger people and people with young kids - are feeling.)
https://duckduckgo.com/?q=when+did+the+covid-19+pandemic+end...
...seems to indicate that plenty of authorities considered the pandemic emergency over in the May 2023 time-frame.
Most people only care about having enough money to achieve their life goals. Have a family, own a home, whatever.
People are upset about inflation because costs went way up and salaries stagnated.
Even though inflation is leveling off, many industries are experiencing layoffs, forgoing raises and promotions, etc.
Costs (profits) have gone way up but the average income has not.
I had a thought the other day and HN seems like a good place to ask. And I understand this idea is just straight up out there but I am honestly asking.
What would/might happen if we put a freeze on home prices? Assuming a magic wand could be waved.
You see this dynamic play out exactly with rent control. People are (rationally) very reluctant to leave rent controlled apartments, so rental housing basically sticks with the people who had it at the time rent control was introduced and newcomers are kind of screwed.
I’m holding onto an apartment now exactly because of this so it really hits with me. Thank you!
So landlords are doing great, homeowners get extra paper wealth, and most millennials see their cost of living increase.
And on top of that, we're getting price gouged by grocery cartels.
The real battle is convincing people that none of this has anything to do with inflation.
Some price increases are due to demand alone, but demand also results in at least some improvements to supply. House flippers can do real work on the house.
The housing market serves people with more money. This can be a problem for people who would rather have lower rent than a nicer place.
If a family moves into a $100k house, lives there for five years and sells it for $150k, they might have made $50k. But when they move into a $300k house that was worth $200k five years ago, their situation hasn't improved.
The only people who benefit are the odd ducks who buy in coastal California, then sell to move to Iowa.
Sometimes that's true for a particular house, but why assume that overall, no houses changed? Contractors get paid to do things. People do work on their houses.
Also, the value of a thing is often due to context rather than the thing itself. The neighborhood could really have gotten better over time, even if the house itself didn't change. That counts as a benefit. Maybe not one you wanted, though.
This is oversimplifying. A rise in housing prices should lead the more construction of more housing, if costs stay relatively the same, and indeed the inflation in housing prices has grown far faster than the cost of labor or building materials. We have a zero-sum game because supply is restricted instead of allowing the market to respond by producing more housing. Sometimes this is due to NIMBYism, sometimes just legacy zoning practices. China has the opposite problem right now because their central planning built too much housing. But there's nothing special about housing that makes it a zero-sum game. For sure, land is basically a zero-sum game (you could blast apart mountains or build artificial islands, but that's not usually financially feasible), but most countries have large apartment towers that expand the amount of housing available despite the zero-sum game for land.
And America has so much land compared to most countries. It's not even funny. It's just mostly wasted.
If I substitute the word "stock" for the word "housing", would you still agree with the statement? If not, what differentiates housing-as-an-asset from stocks-as-an-asset from a wealth perspective? It's not like we can't have more of either of them.
The increased value of my stock holdings has resulted in a very nice increase in my quarterly dividend distribution. Thus, I see an increase in stock value the same way I see any other increase in my income.
I could sell my house an pocket those gains, but I'd have to buy another house that has also experienced the same, or even greater price increases. Or rent smaller apartment at 2-3x my monthly mortgage.
In reality, calling housing inflation "zero sum" is being generous. It's pretty much an economic drag on society. Having the price of housing get cheaper over time would probably be better.
> housing-as-an-asset from stocks-as-an-asset
Of course these are both "assets." But stocks are an income producing investment while my house is more akin to my car: it costs me money but provides me with necessary functionality. If I owned rental properties, then I'd call those income producing investments, but I don't own rentals.
But there are masses of companies in the S&P 500 that don't even pay dividends. The dividend yield of the index is like 1.3%.
"The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it". —[Jeff Bezos](https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-2123...)
A broken clock with 12 hands is right 24 times a day.
No one knows EXACTLY when the trend will end - which you generally need to get right to make a lot of money.
But most people with a brain know an unsustainable trend will not last forever.
Bingo.
People who argue the economy is doing well based on some coarse high-level numbers are missing a lot, because the numbers are coarse and high-level. The most charitable interpretation is they're confusing the map for the territory.
That said, 1% of one million is ~double 10% of $45,000.
* alot of media and govt sources are reporting the US has a k shaped economy.
The people who are doing well are doing really well.
The people who aren't doing well are doing really bad, and there's a lot of people who aren't doing well.
* The reason immigrants account for so much post-pandemic growth is because immigrants appear to be replacing native born people in job growth.
Lower paid immigrants taking jobs is ultimately an assault on the working class yet the left spins it like it's a good thing.
https://fred.stlouisfed.org/graph/?g=1oPUl
* Gov't spending is out of control and THE INTEREST on our National Debt just surpassed military spending. Which means the fed will have to print money or issue treasury bonds to cover the U.S. massive defecit every year, which will increase inflation continuously.
Lessons to be learned:
1. Inflation is never going down
2. House prices are never going down
3. There is not a healthy job market if you are a native born citizen as there's a war on wages
4. Historically massive inflation has led to war
> everyday needs
The cost of a lot of things, dining out in particular, were kept in check for decades because wages for labor were suppressed. The true costs of "everyday needs" were borne by labor to the benefit of the consumer (and arguably, the business owner).
Now that we can't cheaply exploit labor post pandemic, costs for the consumer are going up. The rising incomes at the bottom rungs of the economic ladder, alongside rapidly (and long-running) spiking costs of real estate, are squeezing consumers as they buy groceries, gas, and yes, fast food.
Putting the brakes on the costs of those is probably going to look like squeezing wages on low income workers once more.
Among other things, wages for fast food workers in California went from > 0 to 0 when they all were laid off.
I imagine you make a lot of money.
I stopped reading there. Unending growth on a finite body is called cancer. The world needs less growth.
It’s going to be a fucking disaster of global proportions when the gum dries up.
This is a masterclass in deception. Here's the actual, plain English translation:
"U.S. GDP growth averaged 2.05% during the four year period beginning in 2020."
But 2% GDP growth per year is subpar, and we're trying to make it sound great! Well, folks are familiar with annual GDP stats, so giving them annualized stats makes comparison easy. To prevent this easy comparison, we won't annualize it! Instead we'll say:
"U.S. GDP grew by 8.2% during the four year period beginning in 2020."
But there's still a problem! 8/2 makes for easy mental math. The reader can still easily realize that we're talking about a paltry 2% growth. How do we handle this? Easy! More obfuscation!
"From the end of 2019 to the end of 2023, U.S. GDP grew by 8.2 percent."
Now the readers is two operations away from being able to compare the data!
The greatest trick of all, of course, is that this odd formulation invites misinterpretation. Since we almost always talk about GDP growth in annualized terms, this sentence can easily be misread as saying "U.S. GDP grew at a rate of 8.2 percent from 2019-2023". In my opinion, this misinterpretation is practically demanded by context, as the actual (2%) figure does not fit into the glowing narrative at all.
I think the ultimate problem is that regardless of the system-legible numbers looking great, it's ultimately just a paperclip optimizer that doesn't reflect people's day to day experiences. There's another article on the front page about "economic termites" and I think that doesn't even capture the full extent of the problem because it's still narrowly focused on prices. Whereas what is happening is that every business with a captive market (which is basically every business these days, after decades of mergers running amok and regulatory capture red tape) is spreadsheet-optimizing into an ever-worse customer experience.
Yea, because it is compared to other countries. See the graph immediately after the section you quoted.
It is intentionally deceptive.
> If the United States’ economy were an athlete, right now it would be peak LeBron James. If it were a pop star, it would be peak Taylor Swift. Four years ago, the pandemic temporarily brought much of the world economy to a halt. Since then, America’s economic performance has left other countries in the dust and even broken some of its own records.
They're not saying it's "pretty good during a pandemic", they're literally saying it's the GOAT.
The basic bargain at the heart of the United States means that you put up with bad urban planning, public infrastructure and a criminal healthcare system in exchange for getting to drive a huge vehicle, cheap food and consumer goods and a detached home with a big yard.
Now you get all the bad stuff, plus expensive food, unaffordable transportation options and a bidding war with Blackrock for your starter home in the midwest.
But hey, the stock market is up!
Someone on HN posited that the models we use for economic performance are overfitted, that they no longer actually gauge the performance of the economy. The economy, after all, is about finding optimal distribution of resources, and ultimately, all resources are produced for the benefit of human beings, so if people's experience on the ground, in reality, is that things are bad, maybe quit telling them they're wrong and go find out what's wrong with your models or measures? Just a wild idea, what do I know.