What the Upper-Middle-Class Left Doesn’t Get About Inflation
What the Upper-Middle-Class Left Doesn’t Get About Inflation
Tell these Americans that the economy is humming, that median wage growth has nudged ahead of the core inflation rate, and that everything’s grand, and you’re likely to see a roll of the eyes.
Interest rates were raised to kick people in the teeth, the Federal reserve says that it needs to keep kicking people in the teeth for a few more months.
Economists are saying that people are not being kicked in the teeth.
Logicians everywhere are banging their heads on their desks, as people are both being kicked in the teeth, and not kicked in the teeth.
It's not that bad. I get kicked in the teeth all the time. I still got some. Only gives me problems when i try to eat certain foods. I don't like corn on the cob anyway.
Thpegk fo yrselpth
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China just dropped interest rates.
This world is not the world of 20 years ago.
Currant inflation is being caused because of high interest rates. Mortgages cost more, so landlords (40% of which are small mom and pop ordinary people renting a second home) increase the rents. It takes years for all the mortgages to flip over to the higher interest rates, so we've see this persistent and high inflation.
Maybe people realize that even if the economy is doing great they're one medical emergency away from bankruptcy, and their kids will never afford college, and they get paid a lot less than the value they create for their employer while executives and hedge fund managers make out like bandits.
It's ok they still have Doritos and Burger King and coke.
Paywall removed: https://archive.is/Whde0
Much better than my shitty phone copypasta!
Should have known it was Michael Powell from the headline. Guy is a hack republican shill that pretends to be centrist.
Did you actually read the article? There was nothing Republican, conservative, or even centrist about it.
I have no idea why you're being downvoted, you're absolutely right. This article doesn't criticize Biden or the Democrats, just the pundits who want to gaslight working-class Americans. This guy clearly didn't read it.
The entire article is an attack on "liberal economists", much like every Michael Powell article.
I've listened to literally hours of takedowns on how shitty of a "journalist" Michael Powell is. Not everyone deserves the benefit of the doubt.
Few have struck this chord more insistently than Paul Krugman, the Nobel Prize–winning economist and liberal New York Times columnist.
Hear that? No? Yeah.
You obviously didn't read the article. Read it, then tell us the part you agree with and which part you disagree with.
It seems to me the most important element of this conversation is wage growth and unemployment versus inflation.
My understanding is those numbers being favorable are what make economists scratch their heads on why everyone feels so negatively and why the economists say the economy is doing great. The most convincing explanation I've seen that mirrors my own feelings is that wage growth feels like I've earned it through my own hard work but inflation feels like I'm being cheated, so even though overall people can buy more than before they don't feel good about it.
This article doesn't really address this big point at all.
It's mostly because these numbers are averages and the majority of wage growth is seen by those switching jobs. We're also talking about really small numbers here, wage growth isn't beating inflation by much, it about a single point difference, that's 10s of dollars per month difference. It also doesn't account for the massive inflation in previous years, so even if you got a good raise this year it likely brought you to the same level as pre-2020.
If you haven't changed jobs in over three years and have been getting sub 5% raises, you are well over 10% worse off than 3 years ago.
To add to that, yes people get paid more switching jobs, but it's incredibly stressful. Also seems to be the only way to get that raise.
Management has seen to be at odds with white collar workers, fighting against work from home. It has not been a stress free ride since the pandemic. Companies keep thinking there will be a recession, and getting the raise is difficult and stressful.
who the heck can buy more than before. I make effectively half of what I did in 2020.
That's unfortunate and hopefully you can get a raise or a better job but apparently unemployment is low overall and wage growth is outpacing inflation for most people.
Who can buy more than before? I can't. Fuel, mortgage, insurance, food, alcohol, electricity, entertainment, services ect have all gone up way more than my wage has. Mortgage alone means i have less money each month than before interest rates and inflation went up.
The issue with this thesis, as with the other theories on this topic who want to pin this conversation on arrogant, disconnected economists, is that the data don’t seem to support any such hypotheses. If sentiment is linked to uniquely bad rates of inflation experienced by the poor, why isn’t there a greater divergence in the sentiment numbers between rich and poor? Sentiment is down for everyone, even people for whom the economy seems to be doing quite well.
This is why economists have largely settled on the vibes theory. While I do have some skepticism of it myself, these populist alternatives in the media and online just don’t have much, if any, supporting evidence.
Working blue collar people are hit hard, yes they are getting raises, but housing is still unaffordable. Yes wages are up, mainly for blue collar workers, but these wages were low to begin with.
Tech firms, and large white collar employers have either had mass layoffs or keep threatening mass layoffs. The middle class feels like it's been in a recession for several years. Wages in the middle class have been stagnant.
For the rich. The stock market isn't fun anymore, it's been gamed. Fewer companies listed. Mostly gamed by a couple of giant investors, so it's fixed. Can't invest money into China. Though the housing market is hot, it's not a great investment, as it takes years to build from greenfield.
You can spin a compelling narrative for any of these but if you want to make a real case then there needs to be a real assessment of the data. Whenever I’ve investigated these types of ideas, I haven’t found them to be very well-supported.
I general I do think the best hypothesis is that people are telling the truth about how they are doing, but the data are somehow missing exactly what is going on. But we need more than speculation to demonstrate exactly what it is.
Exactly. instead of writing this whole mountain of speculation, they could have google "food price inflation" and compared that to other inflation, and see the numbers are mostly the same.
This right tf HERE.
Is it?
https://tradingeconomics.com/united-states/food-inflation
A box of graham crackers at my local grocery store is now $6.49
Can we stop with these inflation indexes. Most people shop at Walmart now, an index is no longer needed, just track Walmart prices.