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No one who feels like they can't purchase a house is gonna say the economy is good. Very simple concept.
Also, this...
Economic signs are improving, but many Americans don't feel the relief. Inflation showed signs of cooling and both stock indexes and corporate profits are up. But many Americans aren't feeling any economic relief.
https://www.cbsnews.com/video/economic-signs-are-improving-but-many-americans-dont-feel-the-relief/
Yep. Just like it was in Germany in 1933. Think about what happened back then...
It was 1 year earlier; 1932
An 84-year-old incumbent party-line centrist was running against Hitler, and the left party at the time spent all its time attacking the centrists (they called the establishment left party “the main enemy”), and ran their own third-party candidate in the election, siphoning votes away from the center.
A few years later, Hitler had managed to seize power and most of the leftists were in the camps or dead. They were the first of his targets, even before he started working for real against the Jews.
I’m being a little bit selective about it to emphasize the similarity with today, and glossing over some important differences in the situations. But also, the situations are eerily similar, at the core.
It was 1 year earlier; 1932
Well, the ramp up to the "Machtergreifung" was, but the actual ascend to power was 1933. Again, just like in the US: Vote in November 2024, inauguration Januar 2025.
But also, the situations are eerily similar, at the core.
Which makes me shiver. I know that most Americans learn only a very limited subset of history in school, and they get even that wrong (How many people in the US still call the civil war the "War of Northern Aggression"?). If I were a history teacher in the US, I would see to add a thorough lecture about first half of 20th century Germany at the next avalable chance. And tell them why American soldiers gave their lives to fight it.
And maybe they should add "The Wave" by Morton Rhue to the literature curriculum, if they have not done that already.
Despite a low unemployment rate and slowing inflation, many Americans believe the economy isn't doing well because food and gas prices are still high.
Well, the government isn't gonna induce deflation. Wages may rise, and a low unemployment rate contributes to that, so the price may fall relative to your purchasing power, but in absolute terms, the prices are where they are.
"The real wages are increasing much faster than the inflation rate, which is very steady," said Kishore Kulkarni, an economist with Metropolitan State University in Denver. "And therefore, the real wages are in fact increasing, but people are not feeling it because there is so much negativism outside."
And there you are.
Are they really telling struggling Americans they're just being "negative" and everything is fine?
As I quoted in my comment, wages are rising faster than inflation, which means that purchasing power is increasing.
If what someone wants is for deflation to be induced and prices to drop in absolute terms, that's not going to happen; creates a mess of problems.
Which inflation rate are you quoting, the true rate including food and fuel or an abstraction that ignores those inelastic categories?
I don't know what they're using, but the CPI -- what most people use when referring to "inflation" -- incorporates food, and food inflation over the past year is lower than any other component. So they're not gonna wind up with a lower rate of inflation by excluding food.
12 months is a poor timeframe to use for inflation when the most relevant data to consumers today is 2021-2022, and again fuel is required to function in the US which I don’t see in CPI making it a poor indicator for real finances. Really though my point is metrics can be manipulated to sound good or bad but ignoring consumer sentiment is foolish for a politician seeking to be elected by those consumers.
The most relevant data is the most recent data.
I don't care about 2022 data, because I'm no longer paid in 2022 dollars or paying 2022 prices.
By that logic we should only read last months data and forget the rest of history, but in reality people have memories and incorporate previous experience in their sentiment.
The most relevant data is the most recent data. You don't have to "forget the rest is history", but it is less relevant than the present.
Those two numbers you are asking about ("true rate" or the abstraction), for the recent past, pretty much work out to the same value.
The CPI excludes some volatile categories, but it's not a trick, in this case.
The tactic of bringing up that the CPI excludes some categories, and implying that if it did include them, it would show more inflation than what it does (including the pretty significant spike in 2022)... that actually is a trick, actually a pretty subtle and clever one. To make people think the economy is getting worse, when it's getting better.
Edit: I made a top level comment with the guidebook to some of the other tricks
Anyway, CPI includes both food and fuel.
I didn’t actually know that, thank you. Yeah, I know there is some commonly cited “inflation” number that excludes some volatile categories but over the last couple years that actually doesn’t change the bottom line - but yeah, it makes sense that CPI would include all the common consumer goods regardless of volatility.
"Core inflation", as the name suggests, excludes some things that are encompassed by CPI. But I think it's cited much less often than CPI.
Honestly I have to admit I’ve become a little bit jaded with hundreds of times looking some particular claim up and learning about things and finding that someone who was swearing some particular thing, was lying; and I’ve gotten lazy about it as a result
It’s almost as if all the “Biden ruined the economy” trolls are consistently not being 100% truthful and straightforward about things
So I spent some time looking into this wage increase stuff and I did find this fun chart with inflation adjusted wages growing 2% in the last 5 years, that’s pretty paltry compared to the corporate profit increases. I’d bet that power imbalance is a large factor in consumer sentiment falling against otherwise good looking economic data.
We’re in a weird economic time right now where the median is actually misleading.
Wages at the bottom are going up hugely (beating inflation by 12 percentage points). Wages at the middle (median) are pretty much unchanged as you noted. Wages at the top are falling behind inflation. I.e. inequality is going down for the first time in God knows how long.
I talk about it elsewhere in the thread and link to a couple articles, but the short answer is that you’re not wrong but median real wages aren’t the whole picture right now.
And yes corporate profits are a huge problem. There was a huge corporate tax increase in 2023 that funded some of the stuff the led to the 12% wage increase at the bottom end, but it’s nowhere near enough.
"the economy is great blah blah blah." Fuck you, make food and rent cheaper, then I'll believe that the economy is doing well.
Make everything cheaper! We are being price gouged left and duxkibg right
What the media and people with money call the economy is a different thing to what everyone else calls the economy.
But it's really useful for them to pretend it's the same thing.
They think of it as "our wealth" and we think of it as "everyone's wealth".
According to people who answer polls
The problem with inflation is that the cat can never go back in the bag. Sure, the Fed says they have inflation "under control" at the moment, but it's still way higher than where pre-covid projections predicted it would be at this time, and real wages have not nearly caught up to the increased prices that literally everyone who earns a paycheck for a living is feeling right now. High cost of groceries and gas will never go back to the way they were, and no matter who ends up sitting in the Oval Office next January, they won't be able to change that fact.
Workers across the country need to wake up and realize that they outnumber the owner class 10,000 to 1. A general strike could grind the entire nation to a halt and then they'll start listening to what we have to say. The politicians in Washington have already signaled that they don't care if average people can't make ends meet and nobody is coming to save us, so we have to take matters into our own hands using the tools proven to work time and time again - worker organization.