Affordability, Part IV
Inclusion, security and fairness
On Friday the University of Michigan released its latest report on consumer sentiment, and it revealed deep dissatisfaction with the economy. The survey respondents rate current economic conditions as the worst in the past fifty years.
As I documented in the first installment in this four-part series on affordability, the depth of this negativity far outstrips what standard measures of economic conditions tell us about the current state of the economy. In the second installment I examined various factors that may explain why Americans feel that their lives have become less affordable – factors, like the burden of higher interest rates, that are not captured in the standard measures. In the third installment I proposed a series of practical policy steps to improve general affordability – such as removing Trump’s tariffs and building more low-cost housing.
Yet, even when we go beyond the standard economic measures when assessing today’s economy, we are still unable to fully explain Americans’ extreme economic negativity. The economy of 2025 is still not worse than the economy of 2009, which was ravaged by the after-effects of the 2008 financial crisis. Neither is it worse than 1980, when the economy was suffering both high unemployment and double-digit inflation.
So in an effort to explain this conundrum, I will focus today’s installment, the last in the series, on three considerations that go beyond our standard interpretation of affordability. But, as I will argue, these three considerations significantly affect how people feel about the economy.
The first is inclusion: Do people feel able to afford goods and services that allow them to be full members of society? That is, do the feel able to live the American dream? The second is security: Even when people have reasonably high purchasing power, do they worry that they could easily fall off the edge? Finally, there’s fairness: Do Americans feel that the system is rigged against ordinary people like themselves?
Beyond the paywall I’ll examine each of these three issues. And in concluding, I will discuss how the public’s concerns about affordability can be the driver for real, and much needed, economic reform in America.
