You leave out a major factor in the "bad vibes" narrative, which is the unrelenting flood of lies coming from Fox News and other right wing "news" outlets. When the economic "news" is all dishonest, people watching it believe it.
Not only Fox. Every bit of good economic news reported during the Biden admin had the caveat, “yes but recession coming.” The legacy media (especially the broken NYT) was just as horribly bad and why people insisted we were in a recession—even depression—when the truth was far different.
I repeatedly saw that outlets like the WaPo and NYT buried good economic news but hyped bad news or the potential for it. For example there was a day that the WaPo had an article with a very small headline about gas prices dropping sharply but a much more prominent article about the high price of eggs.
The media rarely reported that inflation was international and was as bad or worse in countries that did not do a lot of stimulus spending — the implicit narrative being that Biden’s spending was the cause of US inflation.
Last summer when the World Bank ranked the US economy #1 in the world and upped their prediction of global growth, citing the strength of the US economy as the driver of that growth the WaPo and NYT buried the story in back pages.
I doubt Professor Krugman "left out" Fox News so much as, erm, he assumed we all know by this point their ludicrously misleading reportage is a given. After all, somebody has to provide the negative vibes.
Right wing outlets play to the emotions of their easily manipulated viewers. If it bleeds it leads, and when a dem is in office, everything bleeds. From Hunter Biden )sks Hillary bashing) to Biden being too old, to the deep state, to wind turbines causing cancer, to horse paste, to the latest drone hysteria, the right knows how to make their viewers bend to a message, no matter what the truth, data, and facts say otherwise. The big Lie is alive and thriving on right wing news outlets...
The generation that feels vibecession and are the most unhappy about the economy don’t watch cable news and don’t read legacy media. We are on social media and streaming platforms.
In the run up to the election, I came across dozens of short videos on YouTube and other social media sites complaining about inflation and the cost of housing. They’re gone now. Go figure.
They weren’t only on YouTube. GOP used social media ability to target specific audience very well. For example, Cubans and Venezuelans in Miami area were seeing YouTube and TikTok videos that had been telling people that Biden wanted to create a Cuba-like/ Chavez-like communism in America. Same videos were broadcasted on Spanish cable channels.
I would say all the media went in lockstep, as always, but the extreme right wing has learned to perfectly control what direction it goes in. As Steve Bannon, the strategic heir of Newt Gingrich, says, "flood the zone with s#*t", and let everyone waste time trying to deny it.
I agree totally. Now the MSM will really be in trouble. Trump who is very litigious is now uncontrollable, thanks Disney, will be suing all the time. Remember his PACS made him a lot of money that he spends on himself.
Propaganda = a combination of legitimate persuasion + sketchy arguments + misdirection. And right-wing media had a lot to work with, considering that both parties have become tools of the wealthy - transferring wealth to the rich while allowing the rich to make lives more miserable (health care is the example du jour.) So some legitimate grievances, some facts interpreted to misassign blame, and some outright lies aligned with the general feeling of being a human ATM. Ultimately there are multiple factors involved - propaganda is the root and proximate cause, yet propaganda thrives because of actions by leaders such as Obama and the Clintons along with the Democratic party.
Ellen - Thanks for the feedback. Seriously. When I write a comment I often wonder what people think - we all have our unique background and worldviews. (I spent a few years in advertising and learned about propaganda and generated some for a few Fortune 50's. Like Economics, most people think they understand propaganda when they really understand so little that they fail to recognize it in their daily lives.)
excellent but there are so many things that have made life much more expensive in the past few years besides inflation. I will give two examples, among many. 1) owning a car: you can no longer buy a car without one of those fobs that cost $250 every time you need a key copied or replaced; a windshield that costs $1000 every time it gets a tiny ding from a pebble because of the new sensors; etc etc. 2) Streaming: you now need multiple subscriptions for sports, movies, etc. I know these may sound like dumb examples. But they are sources of frustration for people who live relatively simple lives (no fancy vacations; no meals out in top restaurants; renting a tiny apartment), whose wages have kept pace with inflation, and still find themselves falling behind. Gone are the days where if you had the energy to stand in line for cheap seats for your favorite sports team, you could get a ticket---now everything is bought up in advance by corporations for their clients, third party ticket sellers, etc. I sound like a crabby old person. I am not nostalgic for the "old days." But I see my kids struggling and they are very hardworking, with decent jobs. They are not terribly materialistic, they don't buy junk and yet....again, back to the cars, they must budget $100 a MONTH just to cover the cost of the yearly windshield replacement (we live in a very rural area with no paved roads so a hole in the windshield is a regular occurrence and must be replaced before inspection.). etc etc, I could give dozens more examples.. The corporate sell off of so many pleasures in life has people really discouraged, if not enraged, imho. I worked on Harris campaign, I am not a purist, but I really do feel that neither party grasps this frustration. And I am not even speaking about people who would be considered poor.
and of course I have left out the escalating costs of health care, also not part of inflation per se. Plans, including those on the ACA exchange, have increased cost "sharing" by a lot in the past few years
Yes, but those things were the same in October and November after the election and survey. So agree with your overall points but kinda misses Krugman's point.
totally agree with you, but I've been meaning to get this off my chest for a while when reading all the "vibes" opinions so I just stuck it in here lol.
Professor Krugman: this is when a reasonable person asks themself: why are we polling people about their perceptions of their economic situations when we've seen time and again that they are so clearly politically biased?
The erosion of purchasing power has outpaced even significant income growth, fundamentally challenging the American Dream. Despite doubling my salary through promotions over the past five years, my quality of life has remained stagnant due to dramatic cost increases in key areas:
Housing: The home I hoped to buy five years ago has nearly tripled in price, pushing homeownership further out of reach even with my doubled income. The zero-interest rate environment created an unsustainable surge in housing costs.
Transportation: The automotive market exemplifies this inflation. Three years ago, I purchased a luxury vehicle for $50,000 - the same price as today's average new car. That same luxury model now costs $65,000, highlighting how "normal" has become what was once considered "luxury."
Food & Services: Even small pleasures show stark inflation. Our family tradition of Saturday morning Dunkin' Donuts has doubled from $6 to $12 since 2021. Meanwhile, the rise of delivery apps like UberEats and DoorDash has eliminated traditional restaurant delivery jobs while making the service significantly more expensive.
This story reflects a broader crisis in economic mobility. While I've been fortunate to receive promotions and bonuses, many Americans work harder than ever - evidenced by doubled unused PTO rates and average vacation time falling below 10 days annually - yet struggle to maintain, let alone improve, their economic security. As retirement age approaches, savings goals feel increasingly unreachable, challenging the core American premise that hard work leads to financial progress.
If you’d put your money in the stock market instead of donuts and luxury cars, those rising prices would have been a non-issue. So many spend in areas their parents and grandparents would have seen as deeply wasteful. Many could do without Uber Eats (a luxury), multiple streaming channels (luxury), SUVs with custom tinted windows (luxury), a smart cellphone for every family member (no, they are not a necessity for most children) and endless fashion, hair removal and dying,and skin and makeup spending (all luxuries). It’s remarkable what many mid level families think they “need” and then complain. Put that money in investments.
Sorry, I overreacted a bit. This article is about how people feel about economy. And all the advices you provide above is exactly why they feel bad about it. Yes, people aren’t jobless, but they have to move things they considered regular into a category of luxury. That’s a psychological definition of recession.
I wasn’t really asking for advice. I was explaining why people feel like it’s a recession. They have to reduce consumption of things they are used to. And that’s exactly why economy is great - corporations extort more from people and worsen the quality at the same time.
Your comment is a little confusing. I can get your meaning, but literally what you’re saying is no matter how much wealth you have you would be struggling with price increases.
*Almost* regardless of how much wealth you have. We are better off than most people but because my husband is about to retire, we are struggling. Does that help?
Didn’t have the money for the down payment, as many of my peers. I have a child with special needs so I can only consider a handful of school districts.
As a retiree, my economic vibes are worsening as I think about the incoming administration of “President Elect” Musk slashing or just getting rid of Social Security/Medicare. On the bright side, the possible new IRS Commissioner wants to get rid of the tax code and just have a 23% sales tax; that added to the 25% tariffs and our 8.25% local tax in Houston means that I’ll be quickly losing that extra twenty pounds my doctor has been bugging me about. Of course, if Medicare is cut, I won’t even have to see her!
Yes! I had to watch Fox News recently as I waited on my car to be repaired. It was fascinating in a bad way: It was one long infomercial for MAGA Republicanism and Donald Trump. America's problems, according to Fox News, are all due to Democrats, every one of them, large, small, and in-between. I felt like I was in a movie about a modern dystopia, say, "1984" or "Brave New World."
I don't know how people stand to watch FOX day in and day out as many do. It is so intense. I remember some years ago they were talking about Ms. Clinton and there was this intense blow by blow of every "crime" that she had committed from jay walking to double parking. If I can, I avoid going to places where one is forced to watch propaganda. I actually think that watching it messes up your mind.
While viewers of Fox News may not be brainwashed, they are fed a steady diet of propaganda, skewed facts, and biased opinions. Supposedly, if you hear the same message over and over, soon you become a believer. Repetition certainly works in advertising and religious sermons. It's hard to fight against a verbal avalanche. And then when your friends, coworkers, family, and neighbors echo those messages, they become even more acceptable. Who are you to fight alone
against a mob? So, in spite of yourself, often, you jump on the bandwagon.
I just started reading Professor Krugman's articles on Substack. His column in the NYT was one of the few that I read with any consistence. But I like his articles on Substack better than his NYT articles. Is there any reason for that or is it just my perception?
I think he gets to vent a little more, without having overly worry about the NYT’s Great Grey Lady reputation. And to be fair, it can seem a little iffy to throw bombs from some one else’s window.
This story is partially right, but I think Paul is missing one big point - inflation, wage increases, and wealth increases have not impacted everyone equally. Take Florida and owners vs. renters. My housing costs have stayed steady or gone down since 2019 - refi'ing to a 2.5% mortgage and property taxes with capped increases. Fred's rent index in South Florida has it going from 340 to 460. 35%. Florida has a huge number of renters who are rent burdened, many pay more than 50% of income to rent. Where they were in a precarious position in 2019, they're in the red now. That 35% rent increase could wipe out all someone's wage gains while still everything else is also more expensive.
1. inflation did not hit everyone equally, and not nearly so much so.
2. the rent is too damn high
3. any survey that will be used to judge an elected democrat needs partisan crosstabs
Jim, I agree with you about rent increases hitting poor people, especially those who rely on public benefits. When Clinton converted AFDC into TANF block grants, the cash assistance for very poor families was frozen (or, in some Red States decreased) for the next quarter century. That cash assistance was the rent money. Now, the income from TANF in some states is 10% of the Federal Poverty Line. Even in some of the most generous states, it is 30% of FPL. Meanwhile, rent has been escalating rapidly due to supply and demand. The increases in family homelessness are an obvious result. And poor families who aren’t homeless today are paying 80%+ of their income on rent and have no margin of error for one episode of bad luck or bad judgment.
Florida’s house owners are also overburdened with insurance cost. The number of flood zones increased dramatically, retiring in Florida used to be affordable for middle class. It’s for upper 10% now.
We reached a tipping point in the pandemic: people realized the economy is fundamentally broken for working people. And then we caught a glimpse of what a social safety net could look like with pandemic relief, eviction moratoriums, student loan freezes… all of which was rolled back (because of Republicans) under Biden.
And right as people took these direct pocket book hits, Biden came out saying the economy was great.
This was a trust election. Dems lost the trust of voters on the economy through bad messaging - an incoherent narrative that lacked the righteous anger our broken system deserves.
Because the country is so much better off when everyone is angry.
Compared to the Depression, where we are now is broad prosperity. Franklin Roosevelt did not run on anger and yet somehow won landslides. There’s got to be a better answer than rage.
Inequality today is higher than it was in the 20s and 30s. Rage isn’t the answer, but neither is papering over the fact that people are being crushed, and corporate elites are doing the crushing.
FDR did an excellent job recognizing people’s pain, communicating who he was standing up for and who he was standing against, and sharing a compelling vision for the path forward.
Much better to read your thoughts most days of the week rather than the two days a week we've had for the past twenty four years. I had a bad twenty four hours thinking you had retired before hearing you on Pivot. What a relief that you're sticking with us, particularly in light of what might/most certainly be ahead starting 1/20/25 ("A date which will live in Infamy").
Propaganda works when it is repeated endlessly and is the only story available in your information space. We have a problem because we won’t regulate speech, and if Trump has his way it will get worse. Fox etc has made America dumb, it really is that simple. We are a profoundly stupid citizenry at this point, and voted accordingly.
Truly small request: when you share a data chart, could you make the source part of the chart image? Humans are going to copy them and carry them far away.
Much of the media did a terrible job reporting the economy, creating fake crises in inflation, housing, and immigration. They should be reminded that to tell a true data story, you need both factual information and proper context.
1. Inflation wasn't a crisis since wages outgrew it (as you point out) and net worth far outgrew it even for the bottom 50% households. Purchasing power is what matters. The real hourly wage for production workers was the highest ever on average in 2021 and remained above 2019 throughout the Biden era. CBO reported that incomes outgrew inflation cumulatively from 2019 to 2023; every quintile in the income distribution had more purchasing power in 2023 than 2019. Americans also became richest ever in terms of real (inflation-adjusted) net worth in Q1 '22.
2. Housing wasn't a crisis for the 65% of households who own the home they live in and benefit from housing appreciation. Most homeowners had set their fixed mortgages prior to the pandemic, so the 27% wage gains cumulatively since Q4 '19 applied to a fixed mortgage payment was a huge win; inflation (if accompanied by wage gains) actually helps fixed-payment debtors in this way.
3. The immigration surge helped drive the economic rebound, as millions of immigrants offset the 4.4 million Boomers turning 65 and retiring each year. CBO estimates that the immigration surge is worth $65,000 per housing in additional income/wealth ($9 trillion GDP) over a decade.
Democrats also did a terrible job messaging around the economy, still in fear of offending a few left behind.
People are just effing ignorant in far too many cases.
We could have zero inflation, .01% unemployment, super high wages and income… The GOP, led by their orange moron still would’ve screamed how the world was ending.. and the lemmings would believe it.
And they did… and they voted for the chaos monkeys.
Now, we will all REALLY suffer. I just hope the ignorant fools who voted for this insanity suffer multiple times more than those of us with an functioning brain in our heads.
If fixing the disastrous results from that vote cause intense suffering for those people, I’ll sleep well. Assuming, of course, I survive the TrumpMuskMAGA Hell.
I think that in a huge, disparate country, averages mean little. Each of us experiences the economy differently. I'm retired, living on the minimum distribution of my 403k and social security. While my social security went up significantly once during the Biden administration, my other income did not. And my expenses certainly went up significantly: taxes, health insurance, food, utilities, insurance; car repairs and insurance, vet bills, even Kindle books. So I would be hard pressed to conclude that I am better off now than I was before. And I imagine millions of Americans shared my experience of the past four years.
Now, I'm a pretty sophisticated follower of the news and I knew that this inflation was a world wide phenomenon and that, no, the Biden administration didn't make it happen. But the Biden administration was responsible for a serious messaging error. Whoever coined the phrase "Bidenomics" should be shot. Because it made it sound like Biden was in fact responsible for the economy and played into the hands of the conservative media who were happy to trumpet that to their often unsophisticated followers.
Sure, unemployment was low and wages rose, especially for those with lower incomes. But those who benefited from the hot job market were a limited if not inconsequential portion of the population while everyone was hit by inflation. And I don't recall any sustained effort by the administration to explain what was happening and to even say, "I feel your pain."
You leave out a major factor in the "bad vibes" narrative, which is the unrelenting flood of lies coming from Fox News and other right wing "news" outlets. When the economic "news" is all dishonest, people watching it believe it.
Not only Fox. Every bit of good economic news reported during the Biden admin had the caveat, “yes but recession coming.” The legacy media (especially the broken NYT) was just as horribly bad and why people insisted we were in a recession—even depression—when the truth was far different.
I repeatedly saw that outlets like the WaPo and NYT buried good economic news but hyped bad news or the potential for it. For example there was a day that the WaPo had an article with a very small headline about gas prices dropping sharply but a much more prominent article about the high price of eggs.
The media rarely reported that inflation was international and was as bad or worse in countries that did not do a lot of stimulus spending — the implicit narrative being that Biden’s spending was the cause of US inflation.
Last summer when the World Bank ranked the US economy #1 in the world and upped their prediction of global growth, citing the strength of the US economy as the driver of that growth the WaPo and NYT buried the story in back pages.
https://apnews.com/article/economy-global-inflation-growth-china-world-bank-c7b22580a44579c418a1cb10b61c2402
Here is the WaPo article which was buried in the business section. Note the negative caveat:
“Surprising U.S. economy is powering better global outlook, World Bank says
High interest rates and trade tensions pose risks to a newly upbeat forecast, though.”
https://wapo.st/3Dw1Wgk
Compare that to the very positive report in the Economist:
“The Envy of the World
The American economy has left other rich countries in the dust
Expect that to continue, argue Simon Rabinovitch and Henry Curr”
https://www.economist.com/special-report/2024/10/14/the-american-economy-has-left-other-rich-countries-in-the-dust
I agree with Dan Froomkin’s analysis:
“I Blame the Media”
https://criticalread.substack.com/p/i-blame-the-media
Thanks for all the great links
>You leave out a major factor<
I doubt Professor Krugman "left out" Fox News so much as, erm, he assumed we all know by this point their ludicrously misleading reportage is a given. After all, somebody has to provide the negative vibes.
Unfortunately, the problem was much bigger than Fox. Theadora30 provides excellent examples above under MAPs comment.
Right wing outlets play to the emotions of their easily manipulated viewers. If it bleeds it leads, and when a dem is in office, everything bleeds. From Hunter Biden )sks Hillary bashing) to Biden being too old, to the deep state, to wind turbines causing cancer, to horse paste, to the latest drone hysteria, the right knows how to make their viewers bend to a message, no matter what the truth, data, and facts say otherwise. The big Lie is alive and thriving on right wing news outlets...
The generation that feels vibecession and are the most unhappy about the economy don’t watch cable news and don’t read legacy media. We are on social media and streaming platforms.
In the run up to the election, I came across dozens of short videos on YouTube and other social media sites complaining about inflation and the cost of housing. They’re gone now. Go figure.
They weren’t only on YouTube. GOP used social media ability to target specific audience very well. For example, Cubans and Venezuelans in Miami area were seeing YouTube and TikTok videos that had been telling people that Biden wanted to create a Cuba-like/ Chavez-like communism in America. Same videos were broadcasted on Spanish cable channels.
Of course, they served the Republicons for the election.
I imagine that's true. However, the cost of housing becomes more ridiculous every day. I'm surprised people aren't still complaining.
The people posting get their info from the media.
https://criticalread.substack.com/p/i-blame-the-media
So it’s 35% TV vs 49% internet (websites+social media+search). I bet that by websites most people meant YouTube.
Some of us avoid all variations of social media AND Fox news
Not enough of you do that, unfortunately
Yes. Propaganda. Intentional mis-direction. We were warned about it fifty years ago and did not pay enough attention.
I would say all the media went in lockstep, as always, but the extreme right wing has learned to perfectly control what direction it goes in. As Steve Bannon, the strategic heir of Newt Gingrich, says, "flood the zone with s#*t", and let everyone waste time trying to deny it.
I agree totally. Now the MSM will really be in trouble. Trump who is very litigious is now uncontrollable, thanks Disney, will be suing all the time. Remember his PACS made him a lot of money that he spends on himself.
Propaganda = a combination of legitimate persuasion + sketchy arguments + misdirection. And right-wing media had a lot to work with, considering that both parties have become tools of the wealthy - transferring wealth to the rich while allowing the rich to make lives more miserable (health care is the example du jour.) So some legitimate grievances, some facts interpreted to misassign blame, and some outright lies aligned with the general feeling of being a human ATM. Ultimately there are multiple factors involved - propaganda is the root and proximate cause, yet propaganda thrives because of actions by leaders such as Obama and the Clintons along with the Democratic party.
i was agreeing with you there for awhile...
Ellen - Thanks for the feedback. Seriously. When I write a comment I often wonder what people think - we all have our unique background and worldviews. (I spent a few years in advertising and learned about propaganda and generated some for a few Fortune 50's. Like Economics, most people think they understand propaganda when they really understand so little that they fail to recognize it in their daily lives.)
excellent but there are so many things that have made life much more expensive in the past few years besides inflation. I will give two examples, among many. 1) owning a car: you can no longer buy a car without one of those fobs that cost $250 every time you need a key copied or replaced; a windshield that costs $1000 every time it gets a tiny ding from a pebble because of the new sensors; etc etc. 2) Streaming: you now need multiple subscriptions for sports, movies, etc. I know these may sound like dumb examples. But they are sources of frustration for people who live relatively simple lives (no fancy vacations; no meals out in top restaurants; renting a tiny apartment), whose wages have kept pace with inflation, and still find themselves falling behind. Gone are the days where if you had the energy to stand in line for cheap seats for your favorite sports team, you could get a ticket---now everything is bought up in advance by corporations for their clients, third party ticket sellers, etc. I sound like a crabby old person. I am not nostalgic for the "old days." But I see my kids struggling and they are very hardworking, with decent jobs. They are not terribly materialistic, they don't buy junk and yet....again, back to the cars, they must budget $100 a MONTH just to cover the cost of the yearly windshield replacement (we live in a very rural area with no paved roads so a hole in the windshield is a regular occurrence and must be replaced before inspection.). etc etc, I could give dozens more examples.. The corporate sell off of so many pleasures in life has people really discouraged, if not enraged, imho. I worked on Harris campaign, I am not a purist, but I really do feel that neither party grasps this frustration. And I am not even speaking about people who would be considered poor.
and of course I have left out the escalating costs of health care, also not part of inflation per se. Plans, including those on the ACA exchange, have increased cost "sharing" by a lot in the past few years
Yes, but those things were the same in October and November after the election and survey. So agree with your overall points but kinda misses Krugman's point.
totally agree with you, but I've been meaning to get this off my chest for a while when reading all the "vibes" opinions so I just stuck it in here lol.
I do this too. Sometimes I have a thought about a thing that just won't leave me alone until I write it down and post it somewhere.
Then I can move on to the next nagging concern.
Add here homeownership that makes everyone house poor now
You don't sound crabby at all, Carolyn. These costs are outrageous.
Seemed like bidens FTC was trying to go after some of these ancillary costs. There will be no like effort from Trump.
Professor Krugman: this is when a reasonable person asks themself: why are we polling people about their perceptions of their economic situations when we've seen time and again that they are so clearly politically biased?
"Oh, but the eggs!"
The erosion of purchasing power has outpaced even significant income growth, fundamentally challenging the American Dream. Despite doubling my salary through promotions over the past five years, my quality of life has remained stagnant due to dramatic cost increases in key areas:
Housing: The home I hoped to buy five years ago has nearly tripled in price, pushing homeownership further out of reach even with my doubled income. The zero-interest rate environment created an unsustainable surge in housing costs.
Transportation: The automotive market exemplifies this inflation. Three years ago, I purchased a luxury vehicle for $50,000 - the same price as today's average new car. That same luxury model now costs $65,000, highlighting how "normal" has become what was once considered "luxury."
Food & Services: Even small pleasures show stark inflation. Our family tradition of Saturday morning Dunkin' Donuts has doubled from $6 to $12 since 2021. Meanwhile, the rise of delivery apps like UberEats and DoorDash has eliminated traditional restaurant delivery jobs while making the service significantly more expensive.
This story reflects a broader crisis in economic mobility. While I've been fortunate to receive promotions and bonuses, many Americans work harder than ever - evidenced by doubled unused PTO rates and average vacation time falling below 10 days annually - yet struggle to maintain, let alone improve, their economic security. As retirement age approaches, savings goals feel increasingly unreachable, challenging the core American premise that hard work leads to financial progress.
If you’d put your money in the stock market instead of donuts and luxury cars, those rising prices would have been a non-issue. So many spend in areas their parents and grandparents would have seen as deeply wasteful. Many could do without Uber Eats (a luxury), multiple streaming channels (luxury), SUVs with custom tinted windows (luxury), a smart cellphone for every family member (no, they are not a necessity for most children) and endless fashion, hair removal and dying,and skin and makeup spending (all luxuries). It’s remarkable what many mid level families think they “need” and then complain. Put that money in investments.
Wow, not only you completely missed my point, you also are entitled enough to extend an advice of how people should live.
Sorry, I overreacted a bit. This article is about how people feel about economy. And all the advices you provide above is exactly why they feel bad about it. Yes, people aren’t jobless, but they have to move things they considered regular into a category of luxury. That’s a psychological definition of recession.
Avoid the expensive delivery apps and get in your $50000 car and pick it up yourself using under $3 gas.
I wasn’t really asking for advice. I was explaining why people feel like it’s a recession. They have to reduce consumption of things they are used to. And that’s exactly why economy is great - corporations extort more from people and worsen the quality at the same time.
You are so right about this, Alena! And this is why most of us are struggling regardless of our financial situation.
Your comment is a little confusing. I can get your meaning, but literally what you’re saying is no matter how much wealth you have you would be struggling with price increases.
*Almost* regardless of how much wealth you have. We are better off than most people but because my husband is about to retire, we are struggling. Does that help?
You should have bought the house 5 years ago. Why didn't you? You too could have gotten a 0% loan. /duh!
Didn’t have the money for the down payment, as many of my peers. I have a child with special needs so I can only consider a handful of school districts.
I totally hear you!
As a retiree, my economic vibes are worsening as I think about the incoming administration of “President Elect” Musk slashing or just getting rid of Social Security/Medicare. On the bright side, the possible new IRS Commissioner wants to get rid of the tax code and just have a 23% sales tax; that added to the 25% tariffs and our 8.25% local tax in Houston means that I’ll be quickly losing that extra twenty pounds my doctor has been bugging me about. Of course, if Medicare is cut, I won’t even have to see her!
The most powerful chaos monkeys driving these BS vibe sessions were on Fox News.
Yes! I had to watch Fox News recently as I waited on my car to be repaired. It was fascinating in a bad way: It was one long infomercial for MAGA Republicanism and Donald Trump. America's problems, according to Fox News, are all due to Democrats, every one of them, large, small, and in-between. I felt like I was in a movie about a modern dystopia, say, "1984" or "Brave New World."
I don't know how people stand to watch FOX day in and day out as many do. It is so intense. I remember some years ago they were talking about Ms. Clinton and there was this intense blow by blow of every "crime" that she had committed from jay walking to double parking. If I can, I avoid going to places where one is forced to watch propaganda. I actually think that watching it messes up your mind.
While viewers of Fox News may not be brainwashed, they are fed a steady diet of propaganda, skewed facts, and biased opinions. Supposedly, if you hear the same message over and over, soon you become a believer. Repetition certainly works in advertising and religious sermons. It's hard to fight against a verbal avalanche. And then when your friends, coworkers, family, and neighbors echo those messages, they become even more acceptable. Who are you to fight alone
against a mob? So, in spite of yourself, often, you jump on the bandwagon.
sadly I also believe too many people get a dopamine rush from being angry and feeling justified in that anger as they watch FOX and that ilk...
I just started reading Professor Krugman's articles on Substack. His column in the NYT was one of the few that I read with any consistence. But I like his articles on Substack better than his NYT articles. Is there any reason for that or is it just my perception?
Many have noticed. The consensus for the reason seems to be editorial freedom.
I think he gets to vent a little more, without having overly worry about the NYT’s Great Grey Lady reputation. And to be fair, it can seem a little iffy to throw bombs from some one else’s window.
This story is partially right, but I think Paul is missing one big point - inflation, wage increases, and wealth increases have not impacted everyone equally. Take Florida and owners vs. renters. My housing costs have stayed steady or gone down since 2019 - refi'ing to a 2.5% mortgage and property taxes with capped increases. Fred's rent index in South Florida has it going from 340 to 460. 35%. Florida has a huge number of renters who are rent burdened, many pay more than 50% of income to rent. Where they were in a precarious position in 2019, they're in the red now. That 35% rent increase could wipe out all someone's wage gains while still everything else is also more expensive.
1. inflation did not hit everyone equally, and not nearly so much so.
2. the rent is too damn high
3. any survey that will be used to judge an elected democrat needs partisan crosstabs
Jim, I agree with you about rent increases hitting poor people, especially those who rely on public benefits. When Clinton converted AFDC into TANF block grants, the cash assistance for very poor families was frozen (or, in some Red States decreased) for the next quarter century. That cash assistance was the rent money. Now, the income from TANF in some states is 10% of the Federal Poverty Line. Even in some of the most generous states, it is 30% of FPL. Meanwhile, rent has been escalating rapidly due to supply and demand. The increases in family homelessness are an obvious result. And poor families who aren’t homeless today are paying 80%+ of their income on rent and have no margin of error for one episode of bad luck or bad judgment.
Florida’s house owners are also overburdened with insurance cost. The number of flood zones increased dramatically, retiring in Florida used to be affordable for middle class. It’s for upper 10% now.
Absolutely right. The same is true here in California. Insurance costs have skyrocketed because of fires and floods
With Partisan crosstabs
https://data.sca.isr.umich.edu/fetchdoc.php?docid=77627
Fred's Rent
https://fred.stlouisfed.org/series/CUURA320SEHA
Rent burdens
https://www.apartmentlist.com/research/more-than-half-of-all-renters-are-cost-burdened
We reached a tipping point in the pandemic: people realized the economy is fundamentally broken for working people. And then we caught a glimpse of what a social safety net could look like with pandemic relief, eviction moratoriums, student loan freezes… all of which was rolled back (because of Republicans) under Biden.
https://popular.info/p/a-new-government-report-reveals-the
https://www.nytimes.com/2024/03/12/opinion/covid-economy-safety-net.html
And right as people took these direct pocket book hits, Biden came out saying the economy was great.
This was a trust election. Dems lost the trust of voters on the economy through bad messaging - an incoherent narrative that lacked the righteous anger our broken system deserves.
Because the country is so much better off when everyone is angry.
Compared to the Depression, where we are now is broad prosperity. Franklin Roosevelt did not run on anger and yet somehow won landslides. There’s got to be a better answer than rage.
Inequality today is higher than it was in the 20s and 30s. Rage isn’t the answer, but neither is papering over the fact that people are being crushed, and corporate elites are doing the crushing.
FDR did an excellent job recognizing people’s pain, communicating who he was standing up for and who he was standing against, and sharing a compelling vision for the path forward.
Totally agree, Martha. What looks good to economists doesn't necessarily work for the rest of us. No offense to Paul.
Much better to read your thoughts most days of the week rather than the two days a week we've had for the past twenty four years. I had a bad twenty four hours thinking you had retired before hearing you on Pivot. What a relief that you're sticking with us, particularly in light of what might/most certainly be ahead starting 1/20/25 ("A date which will live in Infamy").
“Infamy” won’t begin to cover it.
Propaganda works when it is repeated endlessly and is the only story available in your information space. We have a problem because we won’t regulate speech, and if Trump has his way it will get worse. Fox etc has made America dumb, it really is that simple. We are a profoundly stupid citizenry at this point, and voted accordingly.
Or winning President is a popularity contest, and Kamala was just somehow less likeable ?
Part of the solution is do as I do. Delete Fox from memorized TV channels.
Truly small request: when you share a data chart, could you make the source part of the chart image? Humans are going to copy them and carry them far away.
Much of the media did a terrible job reporting the economy, creating fake crises in inflation, housing, and immigration. They should be reminded that to tell a true data story, you need both factual information and proper context.
1. Inflation wasn't a crisis since wages outgrew it (as you point out) and net worth far outgrew it even for the bottom 50% households. Purchasing power is what matters. The real hourly wage for production workers was the highest ever on average in 2021 and remained above 2019 throughout the Biden era. CBO reported that incomes outgrew inflation cumulatively from 2019 to 2023; every quintile in the income distribution had more purchasing power in 2023 than 2019. Americans also became richest ever in terms of real (inflation-adjusted) net worth in Q1 '22.
2. Housing wasn't a crisis for the 65% of households who own the home they live in and benefit from housing appreciation. Most homeowners had set their fixed mortgages prior to the pandemic, so the 27% wage gains cumulatively since Q4 '19 applied to a fixed mortgage payment was a huge win; inflation (if accompanied by wage gains) actually helps fixed-payment debtors in this way.
3. The immigration surge helped drive the economic rebound, as millions of immigrants offset the 4.4 million Boomers turning 65 and retiring each year. CBO estimates that the immigration surge is worth $65,000 per housing in additional income/wealth ($9 trillion GDP) over a decade.
Democrats also did a terrible job messaging around the economy, still in fear of offending a few left behind.
3. ...$65,000 per household....
People are just effing ignorant in far too many cases.
We could have zero inflation, .01% unemployment, super high wages and income… The GOP, led by their orange moron still would’ve screamed how the world was ending.. and the lemmings would believe it.
And they did… and they voted for the chaos monkeys.
Now, we will all REALLY suffer. I just hope the ignorant fools who voted for this insanity suffer multiple times more than those of us with an functioning brain in our heads.
If fixing the disastrous results from that vote cause intense suffering for those people, I’ll sleep well. Assuming, of course, I survive the TrumpMuskMAGA Hell.
I don't know what I like more: Mr. Krugman's posts or comments, which are mainly intelligent.
I think that in a huge, disparate country, averages mean little. Each of us experiences the economy differently. I'm retired, living on the minimum distribution of my 403k and social security. While my social security went up significantly once during the Biden administration, my other income did not. And my expenses certainly went up significantly: taxes, health insurance, food, utilities, insurance; car repairs and insurance, vet bills, even Kindle books. So I would be hard pressed to conclude that I am better off now than I was before. And I imagine millions of Americans shared my experience of the past four years.
Now, I'm a pretty sophisticated follower of the news and I knew that this inflation was a world wide phenomenon and that, no, the Biden administration didn't make it happen. But the Biden administration was responsible for a serious messaging error. Whoever coined the phrase "Bidenomics" should be shot. Because it made it sound like Biden was in fact responsible for the economy and played into the hands of the conservative media who were happy to trumpet that to their often unsophisticated followers.
Sure, unemployment was low and wages rose, especially for those with lower incomes. But those who benefited from the hot job market were a limited if not inconsequential portion of the population while everyone was hit by inflation. And I don't recall any sustained effort by the administration to explain what was happening and to even say, "I feel your pain."