As to the disconnect between personal finances and perception of the economy as a whole, it would be interesting to see an age breakdown. I am comfortable as a retiree (though vulnerable to serious disruption) but that is because I accumulated significant assets during good times. I am living on fossil money. Later generations never had the good times to do the accumulation. Barring the first three years of Trump, it has been one disaster after another since 2008, at least.
There's another explanation. All kinds of polls in recent decades on many different topics produce the same phenomenon. " I live in a safe community, but crime is rampant everywhere else." "Our local schools are good, but schools are bad everywhere else." "My congressman is good, but Congress is full of idiots." etc etc.
News media report 'exceptional news' , not average events. Bad news is actually exceptional. It gets a disproportionate amount of coverage, and consumers of that news get a distorted view of reality.
If it is true that most Americans would opt for "financial stability" as opposed to "upward mobilty" (as if this were a real choice), then we are in for stagnation & a crappy future.
I am very glad to have discovered your work. Since I am not an economist, I might ask a dumb question, but hear me out: You mention (in a podcast) that American worker productivity has declined in the last decade. Doesn't the composition of the work force affect that? For instance, if most created jobs are for elder care workers, and not for microchip fab workers, shouldn't that affect aggregate productivity? In conditions of demographic decline you can expect that there would be much higher demand for basic services, than technology. I guess an elder care worker can somewhat increase their productivity through hooking up their charges with sensors, but at the end of the day, the time spent in the actual care taking per patient may not change much. My point is that there is productivity decline that you cannot do much about (like the above example) and there is productivity decline that you can do something about, and your studies and policies should identify and address the latter. Is that the case?
Oren, I'm a huge fan - I have a minor ambition to create an equivalent to the cost of thriving index here in the UK - it's a terrific innovation.
Something I'd love to get some help with is how to get a grip on economics from the perspective of Understanding America / American Compass / Mr. Cass. I'm well aware that most of the differences between this form of economics and Professor Krugman's is primarily one of assumptions about how economies work but there are so many differences hidden away in assumptions that it's difficult to keep track of them.
Is there a text book or similar that I could read to learn a bit more?
I agree with your commentary but offer a rebuttal critics might make that I don't think you address re why they find the polling persuasive.
That rebuttal is described below but I think it would be helpful if true to make the point that those being surveyed are not fairly representative of the larger population.
My guess is they would argue that if a good number of people believe they're doing well economically, maybe that's also the reality for the others they're concerned about and they're actually misinformed about how the other people are doing. And that they're misinformed because they've been wrongly convinced the economy is not good.
Obviously the rebuttal to this includes some of the facts you shared in your post about how the middle class isn't doing well but that's why they take issues with the facts you share and emphasize the ones they like. And furthermore, they would argue the polling demonstrates this. Which is why I argue above the representation in their polling needs to be put in context, such as elites are likely to be overrepresented in polling, etc.
I'd curious if you've done any work on how a tax on capital inflows (capital controls) like Michael Pettis and Matt Klein outline in Trade Wars are Class Wars compares to using tariffs? Of course, they are not mutually exclusive but I'd wager that the in flow tax would be more efficient in that it would target surplus exporters more than countries with a more balanced economy. Yes a more balanced economy wouldn't be affected as much overall because it is balanced but its exporters would. The inflow tax would also seem to be a more gradual policy.
As to the disconnect between personal finances and perception of the economy as a whole, it would be interesting to see an age breakdown. I am comfortable as a retiree (though vulnerable to serious disruption) but that is because I accumulated significant assets during good times. I am living on fossil money. Later generations never had the good times to do the accumulation. Barring the first three years of Trump, it has been one disaster after another since 2008, at least.
There's another explanation. All kinds of polls in recent decades on many different topics produce the same phenomenon. " I live in a safe community, but crime is rampant everywhere else." "Our local schools are good, but schools are bad everywhere else." "My congressman is good, but Congress is full of idiots." etc etc.
News media report 'exceptional news' , not average events. Bad news is actually exceptional. It gets a disproportionate amount of coverage, and consumers of that news get a distorted view of reality.
I was going to make the same point. This disparity is an old finding that crosses issue areas.
If it is true that most Americans would opt for "financial stability" as opposed to "upward mobilty" (as if this were a real choice), then we are in for stagnation & a crappy future.
I am very glad to have discovered your work. Since I am not an economist, I might ask a dumb question, but hear me out: You mention (in a podcast) that American worker productivity has declined in the last decade. Doesn't the composition of the work force affect that? For instance, if most created jobs are for elder care workers, and not for microchip fab workers, shouldn't that affect aggregate productivity? In conditions of demographic decline you can expect that there would be much higher demand for basic services, than technology. I guess an elder care worker can somewhat increase their productivity through hooking up their charges with sensors, but at the end of the day, the time spent in the actual care taking per patient may not change much. My point is that there is productivity decline that you cannot do much about (like the above example) and there is productivity decline that you can do something about, and your studies and policies should identify and address the latter. Is that the case?
Oren, I'm a huge fan - I have a minor ambition to create an equivalent to the cost of thriving index here in the UK - it's a terrific innovation.
Something I'd love to get some help with is how to get a grip on economics from the perspective of Understanding America / American Compass / Mr. Cass. I'm well aware that most of the differences between this form of economics and Professor Krugman's is primarily one of assumptions about how economies work but there are so many differences hidden away in assumptions that it's difficult to keep track of them.
Is there a text book or similar that I could read to learn a bit more?
I agree with your commentary but offer a rebuttal critics might make that I don't think you address re why they find the polling persuasive.
That rebuttal is described below but I think it would be helpful if true to make the point that those being surveyed are not fairly representative of the larger population.
My guess is they would argue that if a good number of people believe they're doing well economically, maybe that's also the reality for the others they're concerned about and they're actually misinformed about how the other people are doing. And that they're misinformed because they've been wrongly convinced the economy is not good.
Obviously the rebuttal to this includes some of the facts you shared in your post about how the middle class isn't doing well but that's why they take issues with the facts you share and emphasize the ones they like. And furthermore, they would argue the polling demonstrates this. Which is why I argue above the representation in their polling needs to be put in context, such as elites are likely to be overrepresented in polling, etc.
I'd curious if you've done any work on how a tax on capital inflows (capital controls) like Michael Pettis and Matt Klein outline in Trade Wars are Class Wars compares to using tariffs? Of course, they are not mutually exclusive but I'd wager that the in flow tax would be more efficient in that it would target surplus exporters more than countries with a more balanced economy. Yes a more balanced economy wouldn't be affected as much overall because it is balanced but its exporters would. The inflow tax would also seem to be a more gradual policy.
> if people aged 18 to 34 are more likely to be living at home with their parents than independently with a significant other
But surely this is at least in part cultural rather than economic?