The data weren't wrong. The policy solutions and interpretations from it were wrong. Think of the famous plane bullet hole diagram. You can have good data (where the bullets are on returning...
Exemplary
The data weren't wrong. The policy solutions and interpretations from it were wrong. Think of the famous plane bullet hole diagram. You can have good data (where the bullets are on returning planes) and still have mistaken outcomes (reinforcing the places that got shot).
The working and middle classes haven't recovered from the Bush Bust in the late 2000s. Period. Wages are stagnant. Job insecurity is up. Retirement savings are catastrophically down. Credit card debt is up. The cost of education has increased. The data support this human-centered struggle.
The economy is doing better if you look at the broad scope numbers. Average income is up. The stock market is up hugely. The GDP is up. More people are in administrative positions. The data also support this economy-centered success.
Addressing the former will jeopardize the latter. Keynesian investment or European-style economic policies are politically untenable and will shake markets. Politicians who make such moves are dismissed as "extreme," and marginalized. The conservative capture of media and cultural levers has made anything suggesting economic policies to the left of Ludwig van Mises akin to promoting communism to the John Birch Society. So we are left with tools that are insufficient for the job, tools that only have coarse outcomes to the economy, tools that can only be spun as success when you look at the averages.
The cynical narrative run by the right since 2015 (arguably before, with Obama blamed for the 2008 crash, resulting in the Tea Party...I know) has been to say that, "the Democrats aren't doing anything to help you, and everything is going bad, but look at the big strong man who will fix everything." The Democrats respond with, "no, see, the economy is doing well," and point to the averages charts. And they are right. But the data they point to don't encompass the whole story...but if the narrative they have to respond to is "things are bad and the Democrats are in power," the natural response is, "things aren't bad." Which is unfortunate and drives them away from voters.
Bernie Sanders had genuine cross-over appeal because he could speak truth to hurting working class voters. By embracing his identity as an independent and democratic socialist, he robbed his opponents of labels to tar him with...he also undermined broader Democratic narratives and earned him no favors in the party that he didn't belong to...so it's a mixed bag.
We need human-centered policies. Those are unacceptable to big donors and corporations. So we continue to suffer from success.
This is a lucid framing of the situation, thanks for taking the time to post it. We can't rely on the democratic party to internalize any of this and do something useful with it in a reasonable...
This is a lucid framing of the situation, thanks for taking the time to post it.
We can't rely on the democratic party to internalize any of this and do something useful with it in a reasonable amount of time. It's possible of course but they've had decades to figure it out. At the end of the day their (figurative) paychecks depend on not understanding it.
But that doesn't mean the general public can't understand it, and change their political (and media) priorities as a result.
We need human-centered policies. Those are unacceptable to big donors and corporations
Your post made it clear but I want to stress it anyway: this is the core problem.
Not saying you're wrong, but I think its worth noting that this article isn't just from some rando journalist with no economic experience, he's a highly educated economist who worked as the US...
Not saying you're wrong, but I think its worth noting that this article isn't just from some rando journalist with no economic experience, he's a highly educated economist who worked as the US Comptroller of the Currency for 5 years under Bill Clinton, he also went to Oxford, Yale, and Harvard. I wouldn't be so quick to dismiss his writings, I don't know your experience with economics or politics so obviously I can't judge your writing either.
I did not read @atchemey’s comment as disagreeing with the author, just the title. The author explores that they had to develop new economic measures to get a well-informed read on the economy....
I did not read @atchemey’s comment as disagreeing with the author, just the title.
The author explores that they had to develop new economic measures to get a well-informed read on the economy. @atchemey writes that the broad-stroke measures used by the administration to justify their success don’t actually capture the real picture.
I think that is just a difference in language, not a difference in substance. Both are saying that the broad-stroke metrics did make it appear that the economy was improving even when it wasn’t.
Can you clarify your original response with an update? I read your response as disputing the argument of the author: that the Democrats are looking at the wrong data. I can see now that you were...
Can you clarify your original response with an update?
I read your response as disputing the argument of the author: that the Democrats are looking at the wrong data. I can see now that you were actually saying "While the Democrats are technically correct, the metrics are flawed and so the Democrats argument that the economy is strong is therefore dubious at best."
I guess that's a fair interpretation, I didn't immediately read it like that but the title is definitely inflammatory, which is why I encouraged people to read further into the article myself.
I guess that's a fair interpretation, I didn't immediately read it like that but the title is definitely inflammatory, which is why I encouraged people to read further into the article myself.
There are plenty of metrics that show average people are worse off though - a key example is house prices relative to wage growth. Anecdotally, unaffordable housing has impacted my ability to save...
There are plenty of metrics that show average people are worse off though - a key example is house prices relative to wage growth.
Anecdotally, unaffordable housing has impacted my ability to save money (I have to pay rent, save for a house, contribute to my pension, and pay student loans), my economic stability (one rent increase from having to move), and willingness to have kids (since I don't have enough left after the above obligations to afford them).
While I don't have hard proof of this, I don't think i'm the only one who feels these impacts - Looking at the age demographics, it's also been clear for years that birth rates have fallen and the population is aging. This will have a devastating impact on government pensions going forward since there won't be enough contributors to pay for the elderly. This has a spiralling effect as a young person because if I believe the pension system is going to fail by the time I retire, it would be a waste for me to contribute so I might as well spend that money now.
The data is there to support a failing economy, you just need to look at it from a human angle.
This is basically the trap I'm in right now too. If I had the means to purchase a home just a few years earlier I would be saving probably up to 2000 dollars a month on my expenses. The difference...
This is basically the trap I'm in right now too. If I had the means to purchase a home just a few years earlier I would be saving probably up to 2000 dollars a month on my expenses. The difference between a 300k home at 3% interest and now the same home 5 years later at 550k and 7% interest is such a huge kick in the teeth that its kept me renting for 3 years longer than I initially intended (with a healthy 10%+ rent increase every year just to rub it in)
It's so depressing how close I came to achieving "the american dream" just to have missed it by a couple of years because I didn't get my career on track fast enough.
This, I imagine, must feel like a gut punch. And now I immediately think of every person younger than you are who has even lower odds of ever “making it”… I’m quite grateful that, while I do live...
It's so depressing how close I came to achieving "the american dream" just to have missed it by a couple of years because I didn't get my career on track fast enough.
This, I imagine, must feel like a gut punch. And now I immediately think of every person younger than you are who has even lower odds of ever “making it”… I’m quite grateful that, while I do live in an area with frankly batshit housing prices, I’m not affected systematically the way I would be if I were my same age, but from the US (or at least, not as much).
Edit: and concepts such as rent control are a fair bit more popular here than in the US, I imagine
Its pretty depressing I'll give you that, at least I have a hope because I have been saving up a lot of money over the years, but as a frugal person it hurts so much to have to pay 2x the price...
Its pretty depressing I'll give you that, at least I have a hope because I have been saving up a lot of money over the years, but as a frugal person it hurts so much to have to pay 2x the price for a home that was only 200k a few years ago.
As someone under 30 I've seen a transition in my lifetime. When I was a kid, pre-2009, I remember thinking, "When I get older, I'll get married and buy a house and have a nice simple job." As a...
As someone under 30 I've seen a transition in my lifetime.
When I was a kid, pre-2009, I remember thinking, "When I get older, I'll get married and buy a house and have a nice simple job."
As a teenager it became, "I'll have to get through college and get a great job, but I could buy a house and maybe have a kid."
I realized at about 21 that I was going to lose out on that dream entirely. I lived in an area undergoing rapid housing inflation, and it was obvious to me that prices were only going to increase with mortgage rates while wages struggled to even stagnate.
Now I'm nearing 30. People around me, especially older generations, went from, "You'll be able to get a house! It might not be as easy, but you can!" to blatantly accepting the reality that I'm not going to own property without substantial luck or massive sacrifice.
Life isn't bad, but it isn't what I hoped for. My American dream is dead, and capitalists killed it.
Regarding birthrates, I think that even many people who could technically afford children are hesitant because the downward trajectory, along with climate change and all the side effects that come...
Regarding birthrates, I think that even many people who could technically afford children are hesitant because the downward trajectory, along with climate change and all the side effects that come along with it, make the future look extremely uncertain. So even if you're "fine" right now, you likely don't expect that to last.
He is eminently more qualified. I am just a former politics news junkie (2002-2024) who spent a lot of time debating economic policies and politics. My response was prompted by the title, which I...
He is eminently more qualified. I am just a former politics news junkie (2002-2024) who spent a lot of time debating economic policies and politics. My response was prompted by the title, which I felt didn't accurately describe the situation.
I am an academic, but not for the dismal science. I think deeply about it because it influences people's lives so much...but I haven't run the numbers. Eugene Ludwig is an actual economic expert, I'm not. Despite that, I think I had something to add - and he and I broadly agree.
To quote a paragraph from the article:
There is, to be sure, real value in tracking the sheer volume of domestic production, though GDP is an imperfect measure even of that. But as useful as the figure may be in the sense that it purports to track generalized national wealth, it is hampered by a profound flaw: It reveals almost nothing about how the attendant prosperity is shared. That is, if a small slice of the population is awarded the great bulk of the bounty from economic growth while everyone else remains unenriched, GDP would rise nevertheless. And that, to a crucial degree, is exactly what has happened.
The economy data were accurate, but the human-centered outcomes differed.
Another quote:
These numbers have time and again suggested to many in Washington that unemployment is low, that wages are growing for middle America and that, to a greater or lesser degree, economic growth is lifting all boats year upon year. But when traveling the country, I’ve encountered something very different. Cities that appeared increasingly seedy. Regions that seemed derelict. Driving into the office each day in Washington, I noted a homeless encampment fixed outside the Federal Reserve itself. And then I began to detect a second pattern inside and outside D.C. alike. Democrats, on the whole, seemed much more inclined to believe what the economic indicators reported. Republicans, by contrast, seemed more inclined to believe what they were seeing with their own two eyes.
He specifically identified that there has been 20 years of this...and he's right, but it doesn't show up in the economic data. One of the greatest sins of the Democratic Party in the 21st Century has been the overrreliance on technocratic and bureaucratic policy at the expense of human-centered policy. Now, I think the sins of the Republican Party are far greater and widespread, but there is a reason they won with lies and the Democrats lost with facts.
People turn away from democracy when it fails to address their problems after long suffering. When there is no "luxury time" to devote to studying the policies and politics needed for a working democracy, easier answers are sought. "Blame these other people." "I'll fix it, just let me be a dictator on day one." "Drain the swamp"//side-step the constitution. It's happened time and again, illustrated in Weimar and 2024 alike.
That doesn't mean the data were wrong. The data are the data. The data are. The political and policy contexts the data are seen in, the interpretation of the data, the choice and implementation of policy from the data, these can all be wrong. By scapegoating the data (which, to be fair, was probably an editor's title choice rather than Ludwig's) we pardon ourselves. Rather than lacking wisdom, we say we lack data, and will do better in the future. We are more the fool for that belief.
This statement is absolutely full of shit. Republicans notice homeless encampments because they want to send the cops in there to throw them out not because they want them housed. One of Kamala...
Democrats, on the whole, seemed much more inclined to believe what the economic indicators reported. Republicans, by contrast, seemed more inclined to believe what they were seeing with their own two eyes.
This statement is absolutely full of shit. Republicans notice homeless encampments because they want to send the cops in there to throw them out not because they want them housed. One of Kamala Harris’ main policy proposal was to put up massive subsidies for new home construction to bring housing costs down. Even subjective surveys about well being taken had people saying they personally are doing fine or better but “the economy” is bad. This was largely media driven pessimism that unmoored people’s read of the overall economy from underlying economic data in the same way news coverage of crime unmoored people’s ideas about public safety from actual crime rates.
Let me be clear - the Republicans are absolutely full of shit and a clear and present danger. But they spoke to the actual problems. The messaging from the Democrats has been muddled at best....
Let me be clear - the Republicans are absolutely full of shit and a clear and present danger. But they spoke to the actual problems. The messaging from the Democrats has been muddled at best. Their policies proposed often addressed the problems better than the GOP - but they were so caught up with articulating the fix at the same time as justifying their performance to date, that it got lost. Part of that was they were trying to placate big donors and corporations. Another part of that was being caught up with the averages. The Democrats did what they do best and shot themselves in the foot, but it is far better than the GOP who shoot others in the head.
The rural areas of America are dying. The GOP has tapped into that resentment for a variety of reasons, some of which I have discussed, and they provide easy but misleading answers to those problems. Even in your excoriation of my comments, you focused on cities with visible homeless populations...because that's where the Democratic focus is. There is a whole vast realm of the country where the Democratic Party has better policies but only vague answers. The Republicans have specific answers addressing the conventional wisdom in those places that will absolutely destroy them. It's the Bush-era Colbert-coined "truthiness" approach - if it feels right, voters will support it, even if it is wrong.
The Democrats are focused on the general outcomes. They have complex, technical solutions, that are poorly articulated. They will do a better job than the GOP...but the GOP has easy answers that fit with people's perceptions and biases. Guess which ones resonate?
The truth is neither Dem nor Rep electeds fully choose how these policies and stances are communicated. The Republican Party exists downstream of the completely rotted brains of the conservative...
The truth is neither Dem nor Rep electeds fully choose how these policies and stances are communicated. The Republican Party exists downstream of the completely rotted brains of the conservative movement due to the steady diet of validating slop they’re fed by cable news and the internet. Their nonsense resonates because it’s coming out of that echo chamber.
The Dems’ policies are coming in response to challenges from mainstream media and speak to the things mainstream media challenges them on. Who is included? How will you pay for it? What about [niche edge case]?
Republican media apparatus is designed to make Republican messaging maximally appealing. The rest of the media is engaged in treating Dems like the only party with agency and, consequently, holds them to standards of thoroughness and honesty that nobody else has to stick to, and goes aggressively after them on those fronts with gotcha questioning. Dem messaging exists downstream of this dynamic, they’re not driving it. Insofar as there is a funnel of liberal/left/progressive media to feed people slop that validates their biases it’s also not Dem aligned, it’s more effective at farming anti-Democrat ragebait that suppresses turnout. This Politico piece is actually a very good example of the latter. It’s there to burnish the faux-populist credentials of right wingers.
I think about the homeless problem and how visible it is in California compared to some other states. There are two big contributors to this: One is that in most parts of the state the weather is...
I think about the homeless problem and how visible it is in California compared to some other states. There are two big contributors to this: One is that in most parts of the state the weather is mild so it’s possible to survive outside all year. Two is that there is a little bit more tolerance of it than in a red state where they prefer to criminalize it which causes people to hide more or leave or actually be bussed away.
But Fox News portrays California as a failed blue state full of liberal policies that cause homelessness. It’s unfortunate that people believe that stuff and vote based on it.
Yes I know California is not great on homelessness in general, largely because of the housing shortage. But I’m speaking in relative terms compared to other states and the content of right wing propaganda.
Three is that real estate costs are high which just makes a lot of people unable to afford rent. This is the main actual policy failure, but it’s a failure that comes downstream of the fact that...
Three is that real estate costs are high which just makes a lot of people unable to afford rent. This is the main actual policy failure, but it’s a failure that comes downstream of the fact that too many people want to live there and they can’t house them all. Hardly an indicator of societal failure. The real question is why are these emptied out declining downs unable to attract people to come start businesses in their derelict main streets or live in their cheap homes?
This is not why there's a housing crisis. California just doesn't build enough housing. It's impossible to build practically any housing in high demand areas like San Francisco. Los Angelenos...
too many people want to live there and they can’t house them all.
This is not why there's a housing crisis. California just doesn't build enough housing. It's impossible to build practically any housing in high demand areas like San Francisco. Los Angelenos can't even agree on how to rebuild from the fire. Of course real estate prices are crazy when no-one can build to meet demand.
Sorry, perhaps I misunderstood the cause and effect you were talking about. I think the hollowed, empty downtowns are usually a separate problem related to American downtowns being mostly zoned...
Sorry, perhaps I misunderstood the cause and effect you were talking about. I think the hollowed, empty downtowns are usually a separate problem related to American downtowns being mostly zoned for offices. Mixed zoning is still depressingly rare in America.
I believe I understand what you're saying. A perhaps clearer way to say it is "While the data underlying the metrics are correct, the metrics themselves are flawed."
I believe I understand what you're saying. A perhaps clearer way to say it is "While the data underlying the metrics are correct, the metrics themselves are flawed."
I’d be quick to dismiss his writings because the whole framing of this piece is disingenuous. It presents these other unemployment figures as some kind of secret that BLS is keeping from us when...
I’d be quick to dismiss his writings because the whole framing of this piece is disingenuous. It presents these other unemployment figures as some kind of secret that BLS is keeping from us when they, in fact, report all kinds of different types of unemployment including the type he’s talking about. And if you do an actual apples-to-apples comparison of those over time you will ALSO see them going down. Underemployment went down, so it does not make sense to use that as an argument for things getting worse when they were objectively getting better. And all the various types of unemployment basically track each other in and haven’t stopped doing so since the ‘90s. The reason they report U3 most often is because it’s the smoothest and least noisy of the measures and the rest all basically match the trend lines anyway. It’s like saying “Ah you think it’s cold because it’s 20 degrees, but what if I told you it’s actually 68 degrees!” but neglect to mention you’re just switching from centigrade to Fahrenheit.
There is an argument that they didn’t improve by enough to undo 20+ years of stagnant wage growth and increasing COL, but it’s absurd to suggest this could have been undone in a single 4 year term. This sort of infantilizing of the electorate does nothing but promote the sort of “pox on both your houses” nihilism about both parties being the same. The story ought to have been that we’re making progress but there is still work to do, instead the story was that everything was a mess and it’s Biden’s fault. Who did that help and why did the media insist on reporting it that way, with Politico being at the forefront of pitching that narrative?
I would say the data is wrong. If the data captured doesn't provided a clear and accurate picture of how Americans are doing, then the data isn't good. The raw numbers that make up the CPI may be...
I would say the data is wrong. If the data captured doesn't provided a clear and accurate picture of how Americans are doing, then the data isn't good. The raw numbers that make up the CPI may be good, but the items polled and the weights are just wrong. It isn't representative of how most Americans spend their money which then provides a warped index that isn't representative of reality. If it isn't representative then what's the point of it.
Absolutely guilty of seeing this article title and using it to confirm my biases, but I encourage you to read the full article as well because there's a lot of good stuff in there. It was so...
Exemplary
Absolutely guilty of seeing this article title and using it to confirm my biases, but I encourage you to read the full article as well because there's a lot of good stuff in there.
It was so incredibly frustrating to be continually told "actually the economy is doing amazing, everything is great" for years on end when everyone you know is struggling to make ends meet.
The problem isn’t that some Americans didn’t come out ahead after four years of Bidenomics. Some did. It’s that, for the most part, those living in more modest circumstances have endured at least 20 years of setbacks, and the last four years did not turn things around enough for the lower 60 percent of American income earners.
This quote strikes me as particularly relevant because it explains a lot of the cognitive dissonance I was seeing around the economic discourse online. The rich have destroyed this country by draining our wealth for centuries on end, and its only accelerating.
The effect, of course, was particularly intense in the wake of the pandemic. In 2023 alone, the CPI indicated that inflation had driven prices up by 4.1 percent. But the true cost of living, as measured by our research, rose more than twice as much — a full 9.4 percent. (emphasis mine)
It was clear to anyone living in the real world that those CPI inflation numbers were completely bunk, if you weren't heavily invested and didn't own a home before 2020, you lost probably close to 50% of your net worth in the last 5 years to those people who were lucky enough to be homeowners and stock investors prior to those dates. Now I don't blame homeowners and stock owners obviously, I blame the system that enables them, the banks and investment bankers who have been skull-fucking the American people for all they're worth and getting bailed out by the federal government whenever they can.
I've been saying for years there are two economies in the US. The economy of the 1% and economy of the 99%. Economists and the government have only measured the 1% economy sine the 70s. It's easy...
I've been saying for years there are two economies in the US. The economy of the 1% and economy of the 99%. Economists and the government have only measured the 1% economy sine the 70s. It's easy to measure, it's GDP, it's wall street and corporate returns. Super easy to measure. CPI has absolutely bonkers constituents and weights.
I was fairly unimpressed with the article. The Biden Administration didn't start using new measurements to arrive at artificial unemployment or inflation numbers. The BLS has reasoning behind the...
I was fairly unimpressed with the article. The Biden Administration didn't start using new measurements to arrive at artificial unemployment or inflation numbers. The BLS has reasoning behind the statistics it uses and the methods it uses to collect them, and while they don't tell the whole story, the measurements are generally good at least for comparison.
It's always been possible to use the alternative unemployment statistics to tell whatever story you want, though, and that's what the author does here to arrive at a "shockingly" higher unemployment number. The author has this white paper on his site in basically claiming that the "true" unemployment rate has been between 20 - 35% since 1995 (and I assume before that). I just wish the data extend enough to show Biden's record low True Unemployment Rate of 20% or whatever this guy would have arrived at.
I will play devil's advocate very briefly and say that perhaps this piece wasn't meant to be a deep dive making an argument; there's plenty of articles out there that are the opposite of this....
I will play devil's advocate very briefly and say that perhaps this piece wasn't meant to be a deep dive making an argument; there's plenty of articles out there that are the opposite of this. With that said, r/BadEconomics has a pretty good takedown of this author from a few years ago. I didn't read that original piece, but the critique and highlighted portions are pretty damning. If they're saying things that stupid, I have no reason to trust them despite their credentials (smart grifters exist too).
This particular article boils down to: official numbers are wrong, I have the real numbers, the real numbers are worse. It also points out a flaw in U3 but neglects to mention U6 that addresses their complaints. They could have compared U3 against U6 and the trend over time to make their case. Instead they invent a new metric and decline to explain why we should believe theirs.
Indeed, and if you make that comparison (the graph also includes the prime-age employment rate), mid-late 2024 numbers look much more like an expansionary peak than a recession. It's particularly...
It also points out a flaw in U3 but neglects to mention U6 that addresses their complaints. They could have compared U3 against U6 and the trend over time to make their case.
Indeed, and if you make that comparison (the graph also includes the prime-age employment rate), mid-late 2024 numbers look much more like an expansionary peak than a recession.
Instead they invent a new metric and decline to explain why we should believe theirs.
It's particularly pernicious to include a low-income line and call it "functionally unemployed." Poverty lines change with time, and that makes it extremely difficult to reconstruct what that level might have been historically.
Poverty lines themselves are also measures of consumption, and they make for poor measurements of wages. A family making $25k/yr that owns their own home outright is in a much superior position to one that rents in New York City on the same wage, but they're identical from an income standpoint.
Following that link and the sources they cite made me much more aware of how little I understand economics. I don’t understand how they arrive at the U6 numbers, the Bureau of Labor Statistics...
Following that link and the sources they cite made me much more aware of how little I understand economics.
I don’t understand how they arrive at the U6 numbers, the Bureau of Labor Statistics page mentions using site surveys. What I’ve wondering about this is if they’re tracking folks who were on unemployment but were then cut off because it only pays out for a limited amount of time or total payout. What about people who don’t apply for unemployment at all because they aren’t eligible or have some kind of pride reason?
The BLS has extensive documentation of their methods, including a link to the survey questions they use (pdf). However, if you aren't certain about the processing that goes into an unemployment...
However, if you aren't certain about the processing that goes into an unemployment rate, my FRED link above also includes the prime-age employment rate. That's just the fraction of people in the 25-55 demographic who have jobs, without excluding people from the denominator if they aren't looking hard enough. That accounts for many potential confounders, including "not looking because of disability" or being a stay-at-home parent.
The only thing really being 'adjusted' for in the 25-55 statistic is the nation's demographic shift, but "fewer people are working because more people are older and retired" isn't, to my mind, very interesting as a symptom of some hidden recession.
The Census bureau runs what’s called the “American Community Survey” where they do ongoing surveys of all sorts of things. BLS includes questions as part of it. It’s filled out by paid census...
The Census bureau runs what’s called the “American Community Survey” where they do ongoing surveys of all sorts of things. BLS includes questions as part of it. It’s filled out by paid census takers who go door to door or mail surveys out. They ask about employment status regardless of whether you’ve applied or not.
That's a good find. From the date posted, it looks like the r/BadEconomics breakdown is addressing the white paper I linked to, in much greater detail than I cared to. One point which I noticed as...
That's a good find. From the date posted, it looks like the r/BadEconomics breakdown is addressing the white paper I linked to, in much greater detail than I cared to. One point which I noticed as well, which is that the "true" measure that he promotes over time makes the COVID numbers look less bad. The U-3 line in the chart shows a much steeper increase in unemployment in 2020 precisely due to the fact that he's including so many people in the "true" numbers, it softens the impact.
Yes the voters were right in that the economy wasn’t good for a large number of them. No the voters were wrong in thinking that Trump or republicans in general are going to help this in any way....
Yes the voters were right in that the economy wasn’t good for a large number of them.
No the voters were wrong in thinking that Trump or republicans in general are going to help this in any way. Maybe slightly in the short term by playing “The two Santa Clauses” and making short term gains on certain areas by damaging long term infrastructure.
Also, the voters were wrong in thinking that the economy is more important than democracy and ethics and the rule of law because they traded all that away for empty promises by a conman and a collection of oligarchs.
I think a lot of voters were thinking "Hey, I'm hurting. This guy be is a liar but says he'll help me and this one says everything is fine so won't make any changes to help me. Do I take a chance...
I think a lot of voters were thinking "Hey, I'm hurting. This guy be is a liar but says he'll help me and this one says everything is fine so won't make any changes to help me. Do I take a chance on the liar or the one that says everything is fine?".
I think it's even more egregious than that (in a way that reflects worse on Dems). When one guy acknowledges that things are shit economically and the other doesn't while you're struggling to buy...
I think it's even more egregious than that (in a way that reflects worse on Dems). When one guy acknowledges that things are shit economically and the other doesn't while you're struggling to buy groceries and make rent, it makes sense to come to the conclusion that the latter guy is the liar. Why should you believe him about other issues if he doesn't acknowledge your material reality?
The data weren't wrong. The policy solutions and interpretations from it were wrong. Think of the famous plane bullet hole diagram. You can have good data (where the bullets are on returning planes) and still have mistaken outcomes (reinforcing the places that got shot).
The working and middle classes haven't recovered from the Bush Bust in the late 2000s. Period. Wages are stagnant. Job insecurity is up. Retirement savings are catastrophically down. Credit card debt is up. The cost of education has increased. The data support this human-centered struggle.
The economy is doing better if you look at the broad scope numbers. Average income is up. The stock market is up hugely. The GDP is up. More people are in administrative positions. The data also support this economy-centered success.
Addressing the former will jeopardize the latter. Keynesian investment or European-style economic policies are politically untenable and will shake markets. Politicians who make such moves are dismissed as "extreme," and marginalized. The conservative capture of media and cultural levers has made anything suggesting economic policies to the left of Ludwig van Mises akin to promoting communism to the John Birch Society. So we are left with tools that are insufficient for the job, tools that only have coarse outcomes to the economy, tools that can only be spun as success when you look at the averages.
The cynical narrative run by the right since 2015 (arguably before, with Obama blamed for the 2008 crash, resulting in the Tea Party...I know) has been to say that, "the Democrats aren't doing anything to help you, and everything is going bad, but look at the big strong man who will fix everything." The Democrats respond with, "no, see, the economy is doing well," and point to the averages charts. And they are right. But the data they point to don't encompass the whole story...but if the narrative they have to respond to is "things are bad and the Democrats are in power," the natural response is, "things aren't bad." Which is unfortunate and drives them away from voters.
Bernie Sanders had genuine cross-over appeal because he could speak truth to hurting working class voters. By embracing his identity as an independent and democratic socialist, he robbed his opponents of labels to tar him with...he also undermined broader Democratic narratives and earned him no favors in the party that he didn't belong to...so it's a mixed bag.
We need human-centered policies. Those are unacceptable to big donors and corporations. So we continue to suffer from success.
This is a lucid framing of the situation, thanks for taking the time to post it.
We can't rely on the democratic party to internalize any of this and do something useful with it in a reasonable amount of time. It's possible of course but they've had decades to figure it out. At the end of the day their (figurative) paychecks depend on not understanding it.
But that doesn't mean the general public can't understand it, and change their political (and media) priorities as a result.
Your post made it clear but I want to stress it anyway: this is the core problem.
Not saying you're wrong, but I think its worth noting that this article isn't just from some rando journalist with no economic experience, he's a highly educated economist who worked as the US Comptroller of the Currency for 5 years under Bill Clinton, he also went to Oxford, Yale, and Harvard. I wouldn't be so quick to dismiss his writings, I don't know your experience with economics or politics so obviously I can't judge your writing either.
I did not read @atchemey’s comment as disagreeing with the author, just the title.
The author explores that they had to develop new economic measures to get a well-informed read on the economy. @atchemey writes that the broad-stroke measures used by the administration to justify their success don’t actually capture the real picture.
I think that is just a difference in language, not a difference in substance. Both are saying that the broad-stroke metrics did make it appear that the economy was improving even when it wasn’t.
Thank you for helping translate. Yeah you're correct in my intentions.
Can you clarify your original response with an update?
I read your response as disputing the argument of the author: that the Democrats are looking at the wrong data. I can see now that you were actually saying "While the Democrats are technically correct, the metrics are flawed and so the Democrats argument that the economy is strong is therefore dubious at best."
I guess that's a fair interpretation, I didn't immediately read it like that but the title is definitely inflammatory, which is why I encouraged people to read further into the article myself.
There are plenty of metrics that show average people are worse off though - a key example is house prices relative to wage growth.
Anecdotally, unaffordable housing has impacted my ability to save money (I have to pay rent, save for a house, contribute to my pension, and pay student loans), my economic stability (one rent increase from having to move), and willingness to have kids (since I don't have enough left after the above obligations to afford them).
While I don't have hard proof of this, I don't think i'm the only one who feels these impacts - Looking at the age demographics, it's also been clear for years that birth rates have fallen and the population is aging. This will have a devastating impact on government pensions going forward since there won't be enough contributors to pay for the elderly. This has a spiralling effect as a young person because if I believe the pension system is going to fail by the time I retire, it would be a waste for me to contribute so I might as well spend that money now.
The data is there to support a failing economy, you just need to look at it from a human angle.
This is basically the trap I'm in right now too. If I had the means to purchase a home just a few years earlier I would be saving probably up to 2000 dollars a month on my expenses. The difference between a 300k home at 3% interest and now the same home 5 years later at 550k and 7% interest is such a huge kick in the teeth that its kept me renting for 3 years longer than I initially intended (with a healthy 10%+ rent increase every year just to rub it in)
It's so depressing how close I came to achieving "the american dream" just to have missed it by a couple of years because I didn't get my career on track fast enough.
This, I imagine, must feel like a gut punch. And now I immediately think of every person younger than you are who has even lower odds of ever “making it”… I’m quite grateful that, while I do live in an area with frankly batshit housing prices, I’m not affected systematically the way I would be if I were my same age, but from the US (or at least, not as much).
Edit: and concepts such as rent control are a fair bit more popular here than in the US, I imagine
Its pretty depressing I'll give you that, at least I have a hope because I have been saving up a lot of money over the years, but as a frugal person it hurts so much to have to pay 2x the price for a home that was only 200k a few years ago.
Not to mention with the astronomical increase in interest rates you'll be paying even more than double over the lifetime of your mortgage
As someone under 30 I've seen a transition in my lifetime.
When I was a kid, pre-2009, I remember thinking, "When I get older, I'll get married and buy a house and have a nice simple job."
As a teenager it became, "I'll have to get through college and get a great job, but I could buy a house and maybe have a kid."
I realized at about 21 that I was going to lose out on that dream entirely. I lived in an area undergoing rapid housing inflation, and it was obvious to me that prices were only going to increase with mortgage rates while wages struggled to even stagnate.
Now I'm nearing 30. People around me, especially older generations, went from, "You'll be able to get a house! It might not be as easy, but you can!" to blatantly accepting the reality that I'm not going to own property without substantial luck or massive sacrifice.
Life isn't bad, but it isn't what I hoped for. My American dream is dead, and capitalists killed it.
Regarding birthrates, I think that even many people who could technically afford children are hesitant because the downward trajectory, along with climate change and all the side effects that come along with it, make the future look extremely uncertain. So even if you're "fine" right now, you likely don't expect that to last.
He is eminently more qualified. I am just a former politics news junkie (2002-2024) who spent a lot of time debating economic policies and politics. My response was prompted by the title, which I felt didn't accurately describe the situation.
I am an academic, but not for the dismal science. I think deeply about it because it influences people's lives so much...but I haven't run the numbers. Eugene Ludwig is an actual economic expert, I'm not. Despite that, I think I had something to add - and he and I broadly agree.
To quote a paragraph from the article:
The economy data were accurate, but the human-centered outcomes differed.
Another quote:
He specifically identified that there has been 20 years of this...and he's right, but it doesn't show up in the economic data. One of the greatest sins of the Democratic Party in the 21st Century has been the overrreliance on technocratic and bureaucratic policy at the expense of human-centered policy. Now, I think the sins of the Republican Party are far greater and widespread, but there is a reason they won with lies and the Democrats lost with facts.
People turn away from democracy when it fails to address their problems after long suffering. When there is no "luxury time" to devote to studying the policies and politics needed for a working democracy, easier answers are sought. "Blame these other people." "I'll fix it, just let me be a dictator on day one." "Drain the swamp"//side-step the constitution. It's happened time and again, illustrated in Weimar and 2024 alike.
That doesn't mean the data were wrong. The data are the data. The data are. The political and policy contexts the data are seen in, the interpretation of the data, the choice and implementation of policy from the data, these can all be wrong. By scapegoating the data (which, to be fair, was probably an editor's title choice rather than Ludwig's) we pardon ourselves. Rather than lacking wisdom, we say we lack data, and will do better in the future. We are more the fool for that belief.
This statement is absolutely full of shit. Republicans notice homeless encampments because they want to send the cops in there to throw them out not because they want them housed. One of Kamala Harris’ main policy proposal was to put up massive subsidies for new home construction to bring housing costs down. Even subjective surveys about well being taken had people saying they personally are doing fine or better but “the economy” is bad. This was largely media driven pessimism that unmoored people’s read of the overall economy from underlying economic data in the same way news coverage of crime unmoored people’s ideas about public safety from actual crime rates.
Let me be clear - the Republicans are absolutely full of shit and a clear and present danger. But they spoke to the actual problems. The messaging from the Democrats has been muddled at best. Their policies proposed often addressed the problems better than the GOP - but they were so caught up with articulating the fix at the same time as justifying their performance to date, that it got lost. Part of that was they were trying to placate big donors and corporations. Another part of that was being caught up with the averages. The Democrats did what they do best and shot themselves in the foot, but it is far better than the GOP who shoot others in the head.
The rural areas of America are dying. The GOP has tapped into that resentment for a variety of reasons, some of which I have discussed, and they provide easy but misleading answers to those problems. Even in your excoriation of my comments, you focused on cities with visible homeless populations...because that's where the Democratic focus is. There is a whole vast realm of the country where the Democratic Party has better policies but only vague answers. The Republicans have specific answers addressing the conventional wisdom in those places that will absolutely destroy them. It's the Bush-era Colbert-coined "truthiness" approach - if it feels right, voters will support it, even if it is wrong.
The Democrats are focused on the general outcomes. They have complex, technical solutions, that are poorly articulated. They will do a better job than the GOP...but the GOP has easy answers that fit with people's perceptions and biases. Guess which ones resonate?
The truth is neither Dem nor Rep electeds fully choose how these policies and stances are communicated. The Republican Party exists downstream of the completely rotted brains of the conservative movement due to the steady diet of validating slop they’re fed by cable news and the internet. Their nonsense resonates because it’s coming out of that echo chamber.
The Dems’ policies are coming in response to challenges from mainstream media and speak to the things mainstream media challenges them on. Who is included? How will you pay for it? What about [niche edge case]?
Republican media apparatus is designed to make Republican messaging maximally appealing. The rest of the media is engaged in treating Dems like the only party with agency and, consequently, holds them to standards of thoroughness and honesty that nobody else has to stick to, and goes aggressively after them on those fronts with gotcha questioning. Dem messaging exists downstream of this dynamic, they’re not driving it. Insofar as there is a funnel of liberal/left/progressive media to feed people slop that validates their biases it’s also not Dem aligned, it’s more effective at farming anti-Democrat ragebait that suppresses turnout. This Politico piece is actually a very good example of the latter. It’s there to burnish the faux-populist credentials of right wingers.
I think about the homeless problem and how visible it is in California compared to some other states. There are two big contributors to this: One is that in most parts of the state the weather is mild so it’s possible to survive outside all year. Two is that there is a little bit more tolerance of it than in a red state where they prefer to criminalize it which causes people to hide more or leave or actually be bussed away.
But Fox News portrays California as a failed blue state full of liberal policies that cause homelessness. It’s unfortunate that people believe that stuff and vote based on it.
Yes I know California is not great on homelessness in general, largely because of the housing shortage. But I’m speaking in relative terms compared to other states and the content of right wing propaganda.
Three is that real estate costs are high which just makes a lot of people unable to afford rent. This is the main actual policy failure, but it’s a failure that comes downstream of the fact that too many people want to live there and they can’t house them all. Hardly an indicator of societal failure. The real question is why are these emptied out declining downs unable to attract people to come start businesses in their derelict main streets or live in their cheap homes?
This is not why there's a housing crisis. California just doesn't build enough housing. It's impossible to build practically any housing in high demand areas like San Francisco. Los Angelenos can't even agree on how to rebuild from the fire. Of course real estate prices are crazy when no-one can build to meet demand.
I mean, “housing them all” means having enough houses for them. What did you think that meant aside from not building enough?
Sorry, perhaps I misunderstood the cause and effect you were talking about. I think the hollowed, empty downtowns are usually a separate problem related to American downtowns being mostly zoned for offices. Mixed zoning is still depressingly rare in America.
I’m talking about old rust belt towns that have been emptying out for decades. They had diverse main streets that are just empty now.
I believe I understand what you're saying. A perhaps clearer way to say it is "While the data underlying the metrics are correct, the metrics themselves are flawed."
I’d be quick to dismiss his writings because the whole framing of this piece is disingenuous. It presents these other unemployment figures as some kind of secret that BLS is keeping from us when they, in fact, report all kinds of different types of unemployment including the type he’s talking about. And if you do an actual apples-to-apples comparison of those over time you will ALSO see them going down. Underemployment went down, so it does not make sense to use that as an argument for things getting worse when they were objectively getting better. And all the various types of unemployment basically track each other in and haven’t stopped doing so since the ‘90s. The reason they report U3 most often is because it’s the smoothest and least noisy of the measures and the rest all basically match the trend lines anyway. It’s like saying “Ah you think it’s cold because it’s 20 degrees, but what if I told you it’s actually 68 degrees!” but neglect to mention you’re just switching from centigrade to Fahrenheit.
There is an argument that they didn’t improve by enough to undo 20+ years of stagnant wage growth and increasing COL, but it’s absurd to suggest this could have been undone in a single 4 year term. This sort of infantilizing of the electorate does nothing but promote the sort of “pox on both your houses” nihilism about both parties being the same. The story ought to have been that we’re making progress but there is still work to do, instead the story was that everything was a mess and it’s Biden’s fault. Who did that help and why did the media insist on reporting it that way, with Politico being at the forefront of pitching that narrative?
I would say the data is wrong. If the data captured doesn't provided a clear and accurate picture of how Americans are doing, then the data isn't good. The raw numbers that make up the CPI may be good, but the items polled and the weights are just wrong. It isn't representative of how most Americans spend their money which then provides a warped index that isn't representative of reality. If it isn't representative then what's the point of it.
Absolutely guilty of seeing this article title and using it to confirm my biases, but I encourage you to read the full article as well because there's a lot of good stuff in there.
It was so incredibly frustrating to be continually told "actually the economy is doing amazing, everything is great" for years on end when everyone you know is struggling to make ends meet.
This quote strikes me as particularly relevant because it explains a lot of the cognitive dissonance I was seeing around the economic discourse online. The rich have destroyed this country by draining our wealth for centuries on end, and its only accelerating.
It was clear to anyone living in the real world that those CPI inflation numbers were completely bunk, if you weren't heavily invested and didn't own a home before 2020, you lost probably close to 50% of your net worth in the last 5 years to those people who were lucky enough to be homeowners and stock investors prior to those dates. Now I don't blame homeowners and stock owners obviously, I blame the system that enables them, the banks and investment bankers who have been skull-fucking the American people for all they're worth and getting bailed out by the federal government whenever they can.
I've been saying for years there are two economies in the US. The economy of the 1% and economy of the 99%. Economists and the government have only measured the 1% economy sine the 70s. It's easy to measure, it's GDP, it's wall street and corporate returns. Super easy to measure. CPI has absolutely bonkers constituents and weights.
https://www.unitedforalice.org/essentials-index gives a better index for the median American than CPI
Was coming to post this if someone hadn’t! I appreciate you highlighting some of the points because I’m way too lazy to do it!
I was fairly unimpressed with the article. The Biden Administration didn't start using new measurements to arrive at artificial unemployment or inflation numbers. The BLS has reasoning behind the statistics it uses and the methods it uses to collect them, and while they don't tell the whole story, the measurements are generally good at least for comparison.
It's always been possible to use the alternative unemployment statistics to tell whatever story you want, though, and that's what the author does here to arrive at a "shockingly" higher unemployment number. The author has this white paper on his site in basically claiming that the "true" unemployment rate has been between 20 - 35% since 1995 (and I assume before that). I just wish the data extend enough to show Biden's record low True Unemployment Rate of 20% or whatever this guy would have arrived at.
I will play devil's advocate very briefly and say that perhaps this piece wasn't meant to be a deep dive making an argument; there's plenty of articles out there that are the opposite of this. With that said, r/BadEconomics has a pretty good takedown of this author from a few years ago. I didn't read that original piece, but the critique and highlighted portions are pretty damning. If they're saying things that stupid, I have no reason to trust them despite their credentials (smart grifters exist too).
This particular article boils down to: official numbers are wrong, I have the real numbers, the real numbers are worse. It also points out a flaw in U3 but neglects to mention U6 that addresses their complaints. They could have compared U3 against U6 and the trend over time to make their case. Instead they invent a new metric and decline to explain why we should believe theirs.
Indeed, and if you make that comparison (the graph also includes the prime-age employment rate), mid-late 2024 numbers look much more like an expansionary peak than a recession.
It's particularly pernicious to include a low-income line and call it "functionally unemployed." Poverty lines change with time, and that makes it extremely difficult to reconstruct what that level might have been historically.
Poverty lines themselves are also measures of consumption, and they make for poor measurements of wages. A family making $25k/yr that owns their own home outright is in a much superior position to one that rents in New York City on the same wage, but they're identical from an income standpoint.
Following that link and the sources they cite made me much more aware of how little I understand economics.
I don’t understand how they arrive at the U6 numbers, the Bureau of Labor Statistics page mentions using site surveys. What I’ve wondering about this is if they’re tracking folks who were on unemployment but were then cut off because it only pays out for a limited amount of time or total payout. What about people who don’t apply for unemployment at all because they aren’t eligible or have some kind of pride reason?
The BLS has extensive documentation of their methods, including a link to the survey questions they use (pdf).
However, if you aren't certain about the processing that goes into an unemployment rate, my FRED link above also includes the prime-age employment rate. That's just the fraction of people in the 25-55 demographic who have jobs, without excluding people from the denominator if they aren't looking hard enough. That accounts for many potential confounders, including "not looking because of disability" or being a stay-at-home parent.
The only thing really being 'adjusted' for in the 25-55 statistic is the nation's demographic shift, but "fewer people are working because more people are older and retired" isn't, to my mind, very interesting as a symptom of some hidden recession.
Thank you! I didn't find the method listing when I looked before.
The Census bureau runs what’s called the “American Community Survey” where they do ongoing surveys of all sorts of things. BLS includes questions as part of it. It’s filled out by paid census takers who go door to door or mail surveys out. They ask about employment status regardless of whether you’ve applied or not.
That's really helpful, thank you. I thought "site survey" meant they were going to job sites, which made no sense to me.
That's a good find. From the date posted, it looks like the r/BadEconomics breakdown is addressing the white paper I linked to, in much greater detail than I cared to. One point which I noticed as well, which is that the "true" measure that he promotes over time makes the COVID numbers look less bad. The U-3 line in the chart shows a much steeper increase in unemployment in 2020 precisely due to the fact that he's including so many people in the "true" numbers, it softens the impact.
Yes the voters were right in that the economy wasn’t good for a large number of them.
No the voters were wrong in thinking that Trump or republicans in general are going to help this in any way. Maybe slightly in the short term by playing “The two Santa Clauses” and making short term gains on certain areas by damaging long term infrastructure.
Also, the voters were wrong in thinking that the economy is more important than democracy and ethics and the rule of law because they traded all that away for empty promises by a conman and a collection of oligarchs.
I think a lot of voters were thinking "Hey, I'm hurting. This guy be is a liar but says he'll help me and this one says everything is fine so won't make any changes to help me. Do I take a chance on the liar or the one that says everything is fine?".
I think it's even more egregious than that (in a way that reflects worse on Dems). When one guy acknowledges that things are shit economically and the other doesn't while you're struggling to buy groceries and make rent, it makes sense to come to the conclusion that the latter guy is the liar. Why should you believe him about other issues if he doesn't acknowledge your material reality?