What do you think might be wrong about the economy? If you don't read social media which is always negative (i do not). Every single metric i could think of, is fantastic, from employment to stock market to GDP growth to consumption of everything to private net worth. Inflation is high-ish sure, but this is what normally happens in a boom.
If you're among the top 10% in the US, you're likely doing fine at the moment, but everyone else is struggling. On paper things may seem okay for the government and large companies reaping the benefits of this AI boom, but the current trajectory is not sustainable. Things will get ugly for everyone if we do not course correct on a number of issues like tariffs, Iran war, and more.
Gas prices are at an all time high, housing has never been less affordable, Intel stock just plunged a record 29% in its history, the US is now $40 trillion in debt... this is all just off the top of my head right now.
Inflation adjusted gas prices are pretty much average over last 25 years or so (and lower than they ever been in 2005-2014 outside of about 9 months' recession).
Inflation adjusted house prices are lower than 25 year average, and about as low as during early covid bottom. And housing affordability is almost best in history, with a few short stretches in late 1990s being better.
US debt load is by far lowest in history (or at least ever since reliable tracking appeared around 1963), for every dollar in debt Americans hold 8 dollars in assets. If you force people to pay all of their debt, at once (which is impossible), it won't cause a domino effect. Government debt? US is not a socialist country. Government can go to hell. And, all branches of government together are only slightly in red vs assets they hold. And debt to GDP is stabe in the last 5 years, last was the covid jump, which by now is about half undone.
Also, and here is a major thing that never existed before, consumption is now to a large degree disconnected from employment. Almost half of consumption is funded by capital, not labor. So potential for vicious cycle where people lose jobs, consume less, companies lose revenue, lay off people, and more people lose jobs, rinse and repeat, is now weaker than ever before - it is not impossible, but less likely. I think we underappreciate how valuable for economy this is. Domination of employment-derived consumption in the past has been a persistent source of instability.
So social negativity we observe is all just vibes, magnified by social media to stir the crowd. There is no money to make by making people feel happy - they click much harder if they are angry or frightened.
Sure there is a problem about a segment of population feeling displaced/irrelevant, but this is mostly a public messaging, and to a smaller extent, law enforcement problem.
Since serious crime is also at all-times low, i doubt it can escalate into something serious.
That's not the case really. People feel fucked because social media and politicians say them so to keep them engaged.
In fact, they are getting slightly better off. At the median.
https://fred.stlouisfed.org/series/LES1252881600Q#
check those charts, and then compare them to yours and you’ll see exactly what I mean.
wages have been roughly stagnant, while major life expenses have skyrocketed. but hey, if you don’t need medical care, don’t rent, and don’t need transportation, maybe it’s fine?
Ironically, out of 3 you listed, two are flat in the last 15 years vs general CPI inflation, and one is slightly up. In terms of purchasing power of median wage, two are more accessible in 15 years and one (rents) very slightly up (~+9%).
Telling you: perception that median people are in some way struggling, is made up, it is political/social media tale they are selling you just to keep you angry and agitated. It does not reflect reality at all.
They may be struggling only in the sense of feeling that they are falling behind, and that is true, but this is an immutable, objective reality that does not depend on policy decisions, it is a force of technological change.
And sure, expenses that have a large component of human labor in them, especially qualified labor, skyrocketed. But others where automation plays a large role, fell. Overall inflation rate best matches expenses structure of the median person.
I really don't know what are the "medical expenses" that 90% of people under 65 need. Sure some get badly unlucky, but well, here in Europe majority of people under 50 just never visit a doctor, there is no need. And under 65, extremely rarely like a few times in 50-65 range. After that 65, you have medicare.
It's really perplexing why American 30-year olds cry about healthcare costs. I seriously don't know anyone under 45 who knows what it is. I brought my ex to the clinic once when she broke her toe, of course women visit gynecologist for checkup and to get pills prescribed once in 6 months, and that's it.
Here in Cyprus, healthcare works on 2.65% flat tax on all incomes, capped at 180K EUR income per year. Everyone seems happy and a family doctor makes 150K EUR per year, on par with the US earnings in a country which is much cheaper to live in.
Secret is much much much lower usage. People just use healthcare perhaps 10% as little as Americans do. It's just not in the culture. Life expectancy is still 83.5 years vs 79.0 in the USA. And yes we also have a car-based society with most people living in individual houses just like in the USA, almost no usable public transport, most of Cyprus is literally US-style suburbia, and in addition, everyone smokes.
So here is the advice of what to do with the healthcare: crush it. Same with universities, for the same reason. Many, many more people undergo unneeded medical interventions because of feeling compelled to do so for some cultural reasons, and many people also get useless degrees which they are unable to put to any good use, crazily jacking up prices for both healthcare and education.
But why aren't they improving their lot A LOT, in line with the general economy? Well i am a coder and probably so are you. Why do you think job market, chances to get hired, and earning potential sucks for coders now? Who is to blame? Trump, Elon Musk, "late stage capitalism"? Who can we possibly protest against and what to demand? Nothing. It's just objective technological change, force of progress.
This. Consumption is up, savings rates are down. Core inputs into the economy are too expensive like meat and gas.
It’s only rosy in the aggregate and then maybe for areas overlooked and for the wealthy.
It can’t stay like this forever. Something will have to give. The rest of the working class folks and lower will not put up with being lied to all day long, well maybe if they voted Trump it won’t matter. Nvm nothing to see here. No minds ever change.
Yes that is a fair assessment. What are the downsides of it? More political idiocy, sure, that is a real one, as long as an average American can vote. Any other ones?
It doesn't mean some freemasons are grabbing all cash, or oligarchs. Most of the new wealth goes to "normal" rich and upper middle class. All of the top 10% are raking in big.
Seriously, i'm 47 and i only knew a SINGLE person in my life who escaped poverty through job. A lady who became a CFO and executive vice-president of a EU system-wide importance bank. And i don't hang out with poor people in general.
Maybe in US it's different, but here in Europe, "jobs" have always been merely a more or less guaranteed safety net to escape total destitution and becoming homeless. If you wanted to make it in life on even the most basic level (buy an apartment, get married etc.), you ALWAYS had to do something better than a job, or own assets.
Vast majority of jobs are not about economy, they are about social policy and politics (because people vote, so society has to at least somewhat placate them to avoid awfully nasty election outcomes).
I don’t know about metrics, but everything is way more expensive in my city comparing to pre-Covid time. I’m not talking about CPI level inflation but way more than that, which is definitely not normal.
And that boom? Well it’s so hard to find jobs across the board, not just IT, but including trades people too.
Bonds. If you don’t think bond prices have any relation to the economy you don’t understand basic economics. Gas prices. If you don’t think a hike in oil is a leading indicator, you don’t understand economics. Debt. If you don’t see the fiscal health of the government, including its debt level as part of the economy then you probably don’t understand macro. The economy has not been well for years. Arguably a decade of zero out interest rates that exploded into sustained inflation that continues intentionally to this day.
What do you think might be wrong about the economy? If you don't read social media which is always negative (i do not). Every single metric i could think of, is fantastic, from employment to stock market to GDP growth to consumption of everything to private net worth. Inflation is high-ish sure, but this is what normally happens in a boom.
If you're among the top 10% in the US, you're likely doing fine at the moment, but everyone else is struggling. On paper things may seem okay for the government and large companies reaping the benefits of this AI boom, but the current trajectory is not sustainable. Things will get ugly for everyone if we do not course correct on a number of issues like tariffs, Iran war, and more.
Gas prices are at an all time high, housing has never been less affordable, Intel stock just plunged a record 29% in its history, the US is now $40 trillion in debt... this is all just off the top of my head right now.
Inflation adjusted gas prices are pretty much average over last 25 years or so (and lower than they ever been in 2005-2014 outside of about 9 months' recession).
Inflation adjusted house prices are lower than 25 year average, and about as low as during early covid bottom. And housing affordability is almost best in history, with a few short stretches in late 1990s being better.
US debt load is by far lowest in history (or at least ever since reliable tracking appeared around 1963), for every dollar in debt Americans hold 8 dollars in assets. If you force people to pay all of their debt, at once (which is impossible), it won't cause a domino effect. Government debt? US is not a socialist country. Government can go to hell. And, all branches of government together are only slightly in red vs assets they hold. And debt to GDP is stabe in the last 5 years, last was the covid jump, which by now is about half undone.
Also, and here is a major thing that never existed before, consumption is now to a large degree disconnected from employment. Almost half of consumption is funded by capital, not labor. So potential for vicious cycle where people lose jobs, consume less, companies lose revenue, lay off people, and more people lose jobs, rinse and repeat, is now weaker than ever before - it is not impossible, but less likely. I think we underappreciate how valuable for economy this is. Domination of employment-derived consumption in the past has been a persistent source of instability.
So social negativity we observe is all just vibes, magnified by social media to stir the crowd. There is no money to make by making people feel happy - they click much harder if they are angry or frightened.
Sure there is a problem about a segment of population feeling displaced/irrelevant, but this is mostly a public messaging, and to a smaller extent, law enforcement problem.
Since serious crime is also at all-times low, i doubt it can escalate into something serious.
One key number you don’t mention - inflation adjusted wages, especially for the lower half of the population.
If you hold a lot of assets or are in the upper quartile of wages, then all of this is good.
If you don’t, then you’re fucked. That is their point.
That's not the case really. People feel fucked because social media and politicians say them so to keep them engaged. In fact, they are getting slightly better off. At the median. https://fred.stlouisfed.org/series/LES1252881600Q#
nope. that chart does not mean what you think it means.
[https://fred.stlouisfed.org/series/CUUR0000SEHA]
[https://fred.stlouisfed.org/series/CPIMEDNS]
[https://fred.stlouisfed.org/series/CPITRNNS]
and many more.
check those charts, and then compare them to yours and you’ll see exactly what I mean.
wages have been roughly stagnant, while major life expenses have skyrocketed. but hey, if you don’t need medical care, don’t rent, and don’t need transportation, maybe it’s fine?
Ironically, out of 3 you listed, two are flat in the last 15 years vs general CPI inflation, and one is slightly up. In terms of purchasing power of median wage, two are more accessible in 15 years and one (rents) very slightly up (~+9%).
Telling you: perception that median people are in some way struggling, is made up, it is political/social media tale they are selling you just to keep you angry and agitated. It does not reflect reality at all.
They may be struggling only in the sense of feeling that they are falling behind, and that is true, but this is an immutable, objective reality that does not depend on policy decisions, it is a force of technological change.
All of them are 3-4x baseline (from the ‘80’s), while wages are up barely 30% from the same time. There is nothing made up about it.
And sure, expenses that have a large component of human labor in them, especially qualified labor, skyrocketed. But others where automation plays a large role, fell. Overall inflation rate best matches expenses structure of the median person.
I really don't know what are the "medical expenses" that 90% of people under 65 need. Sure some get badly unlucky, but well, here in Europe majority of people under 50 just never visit a doctor, there is no need. And under 65, extremely rarely like a few times in 50-65 range. After that 65, you have medicare. It's really perplexing why American 30-year olds cry about healthcare costs. I seriously don't know anyone under 45 who knows what it is. I brought my ex to the clinic once when she broke her toe, of course women visit gynecologist for checkup and to get pills prescribed once in 6 months, and that's it.
Fall and break a bone.
Have appendicitis.
Get in a car accident and get injured.
Have an accident in the kitchen (burn yourself, etc.).
Get bit by an animal and need special shots (rabies, or the like).
All relatively common ‘surprise’ events at all ages. All 20-100k easy in the US right now.
Wait until you, your immediate family, or close friends get “unlucky” and then report back.
Here in Cyprus, healthcare works on 2.65% flat tax on all incomes, capped at 180K EUR income per year. Everyone seems happy and a family doctor makes 150K EUR per year, on par with the US earnings in a country which is much cheaper to live in.
Secret is much much much lower usage. People just use healthcare perhaps 10% as little as Americans do. It's just not in the culture. Life expectancy is still 83.5 years vs 79.0 in the USA. And yes we also have a car-based society with most people living in individual houses just like in the USA, almost no usable public transport, most of Cyprus is literally US-style suburbia, and in addition, everyone smokes.
So here is the advice of what to do with the healthcare: crush it. Same with universities, for the same reason. Many, many more people undergo unneeded medical interventions because of feeling compelled to do so for some cultural reasons, and many people also get useless degrees which they are unable to put to any good use, crazily jacking up prices for both healthcare and education.
Uh, none of that has anything to do with a broken bone (for example) costing $20k USD or more to get fixed.
But why aren't they improving their lot A LOT, in line with the general economy? Well i am a coder and probably so are you. Why do you think job market, chances to get hired, and earning potential sucks for coders now? Who is to blame? Trump, Elon Musk, "late stage capitalism"? Who can we possibly protest against and what to demand? Nothing. It's just objective technological change, force of progress.
Capital vs Labor.
This. Consumption is up, savings rates are down. Core inputs into the economy are too expensive like meat and gas.
It’s only rosy in the aggregate and then maybe for areas overlooked and for the wealthy.
It can’t stay like this forever. Something will have to give. The rest of the working class folks and lower will not put up with being lied to all day long, well maybe if they voted Trump it won’t matter. Nvm nothing to see here. No minds ever change.
Savings rate is a tough thing to argue about because assets are up. People aren't motivated to save. They feel rich as it is.
Wages aren’t rising, jobs are harder to get it goes on and on.
Perhaps because wages and jobs are becoming less relevant to overall success of economy and the society.
The success of our economy is increasing becoming disconnected from the success of the average American.
Yes that is a fair assessment. What are the downsides of it? More political idiocy, sure, that is a real one, as long as an average American can vote. Any other ones?
It doesn't mean some freemasons are grabbing all cash, or oligarchs. Most of the new wealth goes to "normal" rich and upper middle class. All of the top 10% are raking in big.
Pretty sure it's the 1% and 0.1% that are gaining the most new wealth and it just decreases down from there the less wealth you have.
tell me you have valuable RSUs / options without telling me you have valuable RSUs / options...
that or you're a very highly compensated tech worker (congrats btw, no shade, legit congrats) that is also a real estate speculator...
Seriously, i'm 47 and i only knew a SINGLE person in my life who escaped poverty through job. A lady who became a CFO and executive vice-president of a EU system-wide importance bank. And i don't hang out with poor people in general.
Maybe in US it's different, but here in Europe, "jobs" have always been merely a more or less guaranteed safety net to escape total destitution and becoming homeless. If you wanted to make it in life on even the most basic level (buy an apartment, get married etc.), you ALWAYS had to do something better than a job, or own assets.
Vast majority of jobs are not about economy, they are about social policy and politics (because people vote, so society has to at least somewhat placate them to avoid awfully nasty election outcomes).
I don’t know about metrics, but everything is way more expensive in my city comparing to pre-Covid time. I’m not talking about CPI level inflation but way more than that, which is definitely not normal.
And that boom? Well it’s so hard to find jobs across the board, not just IT, but including trades people too.
Bonds. If you don’t think bond prices have any relation to the economy you don’t understand basic economics. Gas prices. If you don’t think a hike in oil is a leading indicator, you don’t understand economics. Debt. If you don’t see the fiscal health of the government, including its debt level as part of the economy then you probably don’t understand macro. The economy has not been well for years. Arguably a decade of zero out interest rates that exploded into sustained inflation that continues intentionally to this day.