The Economy

 One thing that has some pundits baffled is how people's opinion of the economy seems to be divorced from the actual economic situation. Paul Campos gives a few possible explanations. His first is right wing media fear mongering on the economy, but it's hardly just Fox saying the economy is bad. You get a lot of headlines like "Economy Adds 350,000 Jobs, Putting Biden In A Bind."  Like...what? We have full employment, wages are outpacing inflation and what's more - and I think hopeful - is that people tend to say that their economic situation is good, but that the economy is bad. 

There's a very real lag in people's perception of the economy and the actual economic recovery. When Clinton and Democrats got hammered in 1994 and Obama in 2010, it was because a recovery had started, but it didn't feel like a recovery. Campos talks about how people are loss averse. They notice their losses more than their gains. In the context of inflation - which is something most people have not really experiences as adults - people are simply seeing higher prices more than they are seeing their higher wages.

What's more, there are two sectors that Campos notes - housing and gasoline - that remain sticky in terms of inflation. Gasoline is pretty clearly linked to sanctions on Russia and Saudi Arabia's being a huge dick. I have to wonder if Saudi Arabia decides to change course on oil prices in light of the recent Israeli-Hamas War. Probably not. 

Housing is one that I confess baffles me. This is a terrible time to buy a house. Prices are high and interest rates are too burdensome to get a new mortgage. So, one would think demand would be low. Yet, precisely because interest rates are high, people aren't selling, which keeps supply low. Both create a really weird increase in housing costs that technically shouldn't be happening.

There's another question of supply in some markets where investors are buying up real estate to use as short term rentals. In particularly pricey markets, that could be bad for inventory. One thing that needs to happen, though, is more building of housing units. Again, tough to do when interest rates are sky-high. 

If we were in a recession, then doomerism on the economy would make sense. If we were coming out of a recession, then our current rate of job and wage growth would lead me to believe that people's feelings about the economy would improve before election day. But the doomerism and partisan views on the economy create a backbeat of depressing news and the unusual experience of inflation has people on edge.

It would be really nice for the future of democracy if that changed soon.