Perception, and its Discontents

Monday 27 May 2024

Three Sphinxes Of Bikini, 1947 by Salvador Dali

The US is the strongest G7 economy right now, having performed best since the pandemic, yet more than half of Americans think the country’s in a recession. The unusual findings were released last week in a Guardian-Harris poll. 56% of respondents believe the US is in a recession, and more surprisingly, 49% believe the stock market is down for the year. US GDP is of course not only strong, but may be overly strong. Elevated interest rates continue to confirm such strength. And the stock market has been hitting successive, new all time highs—which tends to create alot of broad news coverage. After a brief period of healing starting late last year—in which consumer sentiment seemed to be re-coupling with reality—it appears Americans are once again unmoored.

Cold Eye Earth addressed this phenomenon last Fall, when surveys of consumer sentiment remained detached from an economy that was gathering momentum. | see: We Are Unhappy. At the time, the dominant explanation set its sights on the media, and its supposed failure to ably summarize and report on the economy. But this is an odd, if not old-fashioned perspective to apply. No one really knows what the media represents in the current era. Alot of online frustration for example is directed towards the New York Times and cable news for their failures, and that’s entirely justified. But the news landscape is so fractured, and so intertwined now with social media, that it shouldn’t be a surprise that Americans today form their opinions not after watching the NBC nightly news, but rather, after dipping their toes daily into thousands of online communities. If a New York Times story awkwardly downplays good news about the economy—a strange and more frequent occurrence these days—that reflects a bias that’s simply not widely distributed enough to drive national sentiment, even if it seems so to a frustrated Biden supporter.

The conditions which continue to aggravate Americans appear to be interest rate sensitive prices; goods and services prices that soared well above average inflation; and the lagged effect of wages as they catch up to prices. Let’s start with the last of those three. To be sure, you have seen the charts showing that US wages are absolutely catching up to inflation and are starting to exceed it. All good. However, against the cumulative inflation that’s occurred since the pandemic year, it’s probably the case that many American workers have not seen their pay packages adequately compete with all the price increases. This is a point made recently by former Obama advisor, David Axelrod. And we know what some of those prices are: car insurance, and housing in particular, to name two big ones. (Ironically, gasoline prices, which draw constant ire in the US, are actually quite normal on a wage-adjusted basis. See: the FRED chart showing that an average hour’s worth of work once again buys 8-9 gallons of gasoline.)

Anecdotally (always a risky path to take, but let’s see if I can make it useful), my two recent college-tour trips—last October to Southern California and this April to New York State, Ohio, and Pennsylvania—revealed a nasty little dividend of inflation: the abysmally low quality of service and value which accompanies the high prices. Hotels, rental cars, food. Three pretty straightforward categories that the US has never struggled to deliver adequately to consumers. These days, however, these three seem to be under pressure, to put it mildly. It is disappointing for sure to pay higher nominal prices, but when the goods sold or the services provided are just not even up to a normal standard, that’s when a bewildering if not depressing set of emotions comes into play. Americans may feel that whenever they step out into the marketplace, they’re getting fleeced.

While it’s understandable that Americans may be moderately unhappy, it strains credibility that they are miserable—especially so miserable as to believe the economy is in a recession. Obama won reelection in 2012 under a very different economy: inflation was non-existent, but so was economic strength. Is the full employment economy of 2022-2024 really as frustrating as the painfully slow recovery of 2010-2012? Please. And yet, it’s worth remembering that Romney looked very competitive against Obama at various points leading up to the 2012 election. A reminder that incumbents get half the credit for good things, and twice the blame for bad things.

This suggests we should neither be dismissive of the reality that many Americans are experiencing some measure of economic anxiety, nor should we credit this anxiety as being borne of struggle and real suffering. We should also remember that a large cohort of Americans have been seriously uninformed about facts for a long time. People often can’t remember that George Bush was president on 9/11, that Obama wasn’t President at the outset of the great recession when the stock market crashed, and even more recently, that the pandemic rolled on for nearly a year before Biden became president. Before The Tonight Show with Jay Leno went off-air in 2014, his crew delighted in getting Jay out to the streets of Los Angeles to ask tourists to name the vice-president, one of their senators, and their state capital. You don’t even need to be told the results of this experiment, do you? Let’s just say, Leno hit the streets of that gold mine for years.

Sometimes societies become unhappy and materialism doesn’t provide a great explanation as to why. It seems unrigorous to say something like: America is getting old, and along with that comes impatience and perhaps some bitterness. But perhaps it’s not so out of bounds to suggest that America, which is exceedingly rich and now bringing young people along into that wealth, is bored and restless and suddenly lacking in purpose. Are you old enough to remember this exchange, from the 1953 Marlon Brando film The Wild One. Mildred : Hey Johnny, what are you rebelling against? Johnny : Whadda you got?

Here is a much fuller meditation on this phenomenon, and one wonders that this is the current mood of America:

“But supposing the world has become “filled up”, so to speak, with liberal democracies, such as there exist no tyranny and oppression worthy of the name against which to struggle? Experience suggests that if men cannot struggle on behalf of a just cause because that just cause was victorious in an earlier generation, then they will struggle against the just cause. They will struggle for the sake of struggle. They will struggle, in other words, out of a certain boredom: for they cannot imagine living in a world without struggle. And if the greater part of the world in which they live is characterized by peaceful and prosperous liberal democracy, then they will struggle against that peace and prosperity, and against democracy.”
― Francis Fukuyama, The End of History and the Last Man