The Best Economy In The World

 It's interesting that economists think we have the best economy in the world right now - especially since the pandemic - but Americans feel the opposite. From the above article:

What explains this sudden boost in lower- and middle-class wages? The answer lies in the post-pandemic American labor market, which has been unbelievably strong. The unemployment rate—defined as the percentage of workers who have recently looked for a job but don’t have one—has been at or below 4 percent for more than two years, the longest streak since the 1960s. Even that understates just how good the current labor market is. Unemployment didn’t fall below 4 percent at any point during the 1970s, ’80s, or ’90s. In 1984—the year Ronald Reagan declared “It’s morning again in America”—unemployment was above 7 percent; for most of the Clinton boom of the 1990s, it was above 5 percent.

And frankly, if you ask most Americans, they will say that their situation is better, but that overall things are worse. I'm sure that is the same as Americans who think Biden is too old but Trump is a virile young thang. 

The labor market is key:

The obvious upside of low unemployment is that people who want jobs can get them. A more subtle consequence, and arguably a more important one, is a shift in power from employers to workers. When unemployment is relatively high, as it was in the years immediately following the 2008 financial crisis, more workers are competing for fewer jobs, making it easier for employers to demand higher qualifications and offer meager pay. That’s how you end up with stories about college graduates working as baristas for $7.25 an hour. But when unemployment is low and relatively few people are looking for jobs, the relationship inverts: Now employers have to compete against one another to attract workers, often by raising wages. And—this is the crucial part—these dynamics affect all workers, not just people who are out of a job.

A more extreme historical example is the Black Death, which transferred power away from the nobility because labor was so scarce. I think it's also important that efforts to restrict immigration will probably lead to higher wages. 

The one black mark is housing, but there's little Biden can do there in the short run. With interest rates high, the housing market is stuck. Still, I am going to predict that in about five years, the housing crisis will have abated.

I have long felt that it will take a spell before people can acclimate to their new prosperity. Hard times have a tail. The inflationary period was shocking and unfamiliar to a lot of people. It's pretty much over, and household wealth is rising.

If people can figure that out before November, we might just save the Republic.