Catherine Rampell of WaPo notes the U.S. economy “looks remarkably good.”
Prof. Heather giving a news report on the economy and what people are believing based on their politics. The economy has weathered a pandemic, inflation, supply chain events, a war in eastern Europe, dysfunctional Republicans, politics, trump, and it keeps on ticking. I expected more of a 2008 scenario with Congress and the Fed ravishing Labor as the troublemakers.
October 27, 2023, Letters from an American, Prof. Heather Cox Richardson
An article this morning jumped out at me. Catherine Rampell of the Washington Post noted that the U.S. economy “looks remarkably good.” A recent stunning jobs report, showing that the economy continues to add jobs at record rates—more than 13.9 million since President Joe Biden took office—along with yesterday’s stunning report that U.S. economic growth grew at an annual pace of 4.9% in the third quarter of this year, puts the U.S. economy at the forefront of most of the world. And inflation is back in the range that the Federal Reserve prefers—it’s at 2.4%, close to the Fed’s target of 2%.
The U.S. is outperforming forecasts made even before the pandemic began for where the economy would be now, even as other countries are worse off.
And yet, Rampell notes, Americans are about as negative about the economy today as they were during the Great Recession after 2008, when mortgage foreclosures were forcing people out of their homes and unemployment rested at about 9%, more than twice what it is today. In contrast, consumers give high marks to the Trump years, when average growth before the pandemic was 2.5% and the U.S. added only about 6.4 million jobs.
There is a crucial divorce here between image and reality. Americans think our economy, currently the strongest in the world, is in poor shape. They mistakenly believe it was better under Trump.
That profound and measurable disjunction ought to make us sit up and take notice, especially as the Biden administration continues to try to make the economy responsive to ordinary Americans and the country continues to pay little attention. Today, for example, the White House announced an effort to turn the dual problems of empty office buildings and a shortage of affordable housing into a win-win. It announced a series of actions to convert vacant commercial properties to residential buildings. Their efforts are designed to create affordable, energy-efficient housing near public transportation and jobs.
The importance of identifying the contrast between image and reality in today’s politics showed recently as the meticulous work of Nashville investigative reporter Phil Williams of Tennessee’s NewsChannel 5 appears to have had an important effect on the mayoral election in Franklin, Tennessee.
While far-right Christian nationalist mayoral candidate Alderman Gabrielle Hanson promised she was “committed to restoring and upholding the wholesome values that have long been the foundation of our city’s identity,” Williams exposed to voters Hanson’s shady history. He showed that Hanson had lied about having multiracial supporters and her ties to white supremacists, highlighted her bizarre behavior, and noted her embrace of Christian nationalism.
On Tuesday, voters overwhelmingly rejected Hanson and other far-right candidates. Hanson won just 20.6% of the vote to 79.4% for the incumbent mayor. Then, after losing, Hanson apparently had her husband drop off her computer and ID badge at City Hall, abandoning her term as alderman before its November 14th end.
Such deep investigation stands out in an increasingly turbulent sea of disinformation. Shayan Sardarizadeh of the BBC explained to Hanaa’ Tameez of Neiman Journalism Lab that social media posters on platforms like TikTok, YouTube, or Twitter can make significant sums of money from “engagement farming.” Posting outrageous material that engages viewers pumps up a user’s brand, making them able to command high prices from marketers.
Sardarizadeh notes that the Israel-Hamas war is a particularly attractive situation for engagement farmers, and rumors and fake videos are flying.
But there are plenty of opportunities for disinformation at home, too, for political purposes. In Ohio, the Republican-controlled Ohio Senate is using its official government website to push what Associate Press legal and medical experts say is “false or misleading” information against the proposed constitutional amendment the state’s voters will consider in the November 7 election. Their inflammatory language warns, for example, that the measure will “legalize abortion on demand at any stage of pregnancy” and permit “the dismemberment of fully conscious children,” the rhetoric of anti-abortion activists.
Julie Carr Smyth and Christine Fernando of the Associated Press report that Republicans began their “On the Record” blog on the state Senate website after Ohio voters rejected their attempts to make it much harder to pass constitutional amendments. The Republicans bill the blog as an “online newsroom” where voters can find “the views the news excludes.” Republican Senate president Matt Huffman denied that the blog was a news service, but it sits under the “News” tab on the Senate’s website.
“My [Republican] colleagues say that this is done because the mainstream media won’t print their stuff,” Democratic state senator Bill DeMora told the reporters. “But of course, the mainstream media won’t pick this up because it’s factually incorrect and basically lies.”
But because the blog appears on an official government website, internet searches turn it up as a reliable source. Laura Manley, executive director of the Shorenstein Center on Media, Politics and Public Policy at the Harvard Kennedy School, told Smyth and Fernando: “It’s a really strategic way to make something appear to be neutral information and fact when that’s not the reality…. I’ve never seen anything like that.”
Finally, after a two-day manhunt, law enforcement officers found Maine mass murder suspect Robert Card dead tonight from a self-inflicted gunshot. Reports suggest that Card had at least a recent history of mental illness and note that his social media accounts show a history of engagement with right-wing and Republican political content.
Opinion | When will Americans stop worrying and learn to love the U.S. economy? The Washington Post
Opinion | Stunning jobs report offers 3 milestones worth celebrating, The Washington Post
Jobs report shock: American economy added a stunning 336,000 jobs in September, (cnn.com)
Meet Phil Williams, ‘Nashville’s Nosiest Bitch’ Who Broke Gabrielle Hanson Story (thedailybeast.com)
Misinformation is flowing ahead of Ohio abortion vote, AP News
The Federal reserve and Commerce Department lie about hyper inflation. Interest rates are barely half the truthful rate of inflation. Real interest rates are negative and such free money is strong economic stimulus.
Trying to link the Maine shooter and mental illness to Republicans is repugnant. Eighty million patriotic Americans voted for President Trump. Patriots are not criminals. Fascists who use the law to attack opposing political views in a Democracy are despicable.
Eddie:
The Fed wishes to have a much lower inflation rate around 2% which I think is silly. Currently making less than 4% in a growing economy fed by supply chain issues mostly. They are not lying. they just wish lower.
Prof, Heather’s piece mentions right wing Repubs. Repub broadcasters are well known for their attempts to inflame the population with their rhetoric. Some people believe the rhetoric and or take action based upon skewed news and beliefs. Evidence has shown Card was following Right wing influencers. Prof. Heather is correct.
You only get one moniker. Do not post again under a different name,
@FE,
“The Federal reserve and Commerce Department lie about hyper inflation.”
Please post a link to where the Fed or the Commerce Department have referred to the current economy as “hyperinflation.”
Fast Eddie, Jake and Big Al. I told you once before, you get one name out here. Big Al is in the trash
When will Americans stop worrying and learn to love the U.S. economy?
Washington Post – Catharine Rampell – Oct 26
What will it take for Americans to stop worrying and finally learn to love the U.S. economy?
On paper, at least, the U.S. economy looks remarkably good. The recent stunning jobs report has now been followed by a stunning GDP report: U.S. economic output grew at an annual pace of 4.9 percent in the third quarter of this year, the Commerce Department reported Thursday, after adjusting for inflation and the usual seasonal patterns.
For context, that’s more than double the pace from the prior quarter, the fastest rate of growth since late 2021, and light-years higher than economists had been expecting not too long ago.
When this year began, a majority of private-sector economists surveyed were predicting an imminent downturn. Heck, even as recently as June, the staff economists at the Federal Reserve were predicting a “mild recession” that would begin sometime in 2023. These economists are not right-wing partisans trying to make President Biden look bad, or naive normies brainwashed by a pessimistic media, whatever Democrats’ fever dreams might be. They’re professional forecasters paid to get the numbers right. …
When will Americans stop worrying and learn to love the U.S. economy?
(It’s a lengthy column, worth reading. It contains a lot of graphics and links. The link above may work. Here’s the end of the piece.)
stop worrying and learn to love the U.S. economy?
Reminds me of a Stanley Kubrick movie with Peter Sellers playing a Kissinger style character…….
I have come to accept the idea that inflation is to be seen as a continuous reminder of the time value of money. Which means it needs to be spent, and soon, because it loses value when you save it.
That’s what the Fed is trying to tell us. (However, you still should save a pile of it, alas.)
@Fred,
If by “save,” you mean put it in a hole in the ground or in your mattress (or in cryptocurrency), then yes, it will lose value. If by “save,” you mean invest in money markets or an index fund, then over time, it will gain value.
Sadly, Americans can’t or won’t save. For most American homeowners, their home equity is most of their savings, because it is enforced savings. How much value it retains depends on location, location, location.
No, savings per se is not the same as investing.
Investing involves risk. Savings is meant to be safe.
Unfortunately, home purchasing also involves a certain amount of risk.
Mainly, these days, in worrying whether you can really pay of your huge mortgage. Or ‘Can I really find someone to pay the outrageous price I need to put on my house when I decide to sell it?’
Putting money into cryptocurrency is pure speculation, and entirely dependent on Greater Fool economics. It ain’t investment, and it ain’t savings.
For some of us, savings doesn’t happen because it can’t. If your income is insufficient, you can’t put anything aside. That is unsustainable. Others perhaps worry too much about inflation & live for the moment, as it were.
“yes, it will lose value.”
That’s happening with investments too.
That’s one of the consequences of a Bear Market, which hasn’t happened for many years, so not many alive really know how to deal with it. Except for assurances that it will go away one of these days, because it always does.
Our investments are still worth over twice what they were 15 years ago, but it used to be thrice. That in itself is more disturbing than inflation.
@Fred,
“That’s happening with investments too.”
As I said above, “then over time, it will gain value.” The phrase “over time” is doing all the work in that sentence. Over time, equity investments have increased in real value and index funds are among the most reliable. There’s a big difference between investing and gambling.
“Our investments are still worth over twice what they were 15 years ago, but it used to be thrice.”
Perhaps the problem is your investment profile. You should talk to your account manager.
Joel:
True. I am seeing our decrease in total value. In which case, I would not pull money out of it at this time if not needed. Value will return and it will make sense to wait till then.
@Bill,
Yes. Buy and hold. That’s investing. I’ve been through several market declines in the past 40 years. It always came back and I always made money in the long run with a diversified portfolio.
Joel:
Yep, no taking money out. Been watching it slowly decline.
I do pay attention to my finance guy. And to others.
The ‘standard rule’ lately (especially for old folks?) is to have ‘120-yer age’ in equity funds. If you’re 75, that means 45% equity, 55% bonds. Once, I had it more like 65%/35%. To get there (& stay there) requires changes from time to time. Especially if your age keeps changing.
My finance guy would also recommend getting out of underperforming funds, which I tend to agree with. If you figure that when a fund drops in value, you should maybe buy more of it, you may well be disappointed. Because it may just keep going down. Anyway, I’ve done that. To a great extent this has to do with the success of high tech glamour stocks to dominate Wall Street, which are all ‘large-cap’.
In any event, rule of thumb is that as you age, you should have more invested in income producing funds and less in equity funds which tend to not pay dividends. (Although some do, especially Apple & Microsoft.)
BTW, it’s interesting to note that even ‘blend’ funds (which combine growth & income holdings) tend to contain a lot of high-tech holdings, like Apple & Microsoft, but also Google & Amazon even though these two don’t pay dividends. Their portfolios do not necessarily look much different from ‘growth’ funds, which are considered more volatile, price-wise.
I continue to take out what the IRS says I have to take out.
The only choice I make is whether it’s from bond funds or equity funds.
Bond funds have been dropping less than equities, so usually its from under-performing equity funds. Small and now mid-caps have been performing badly for the last couple of years. We are getting less diversified. For us, the long-term is getting to be a closer horizon.
I think the public’s attitude towards the economy is hugely influenced by the inflation mentioned in earlier posts coupled with the large jump in home mortgage interest rates and credit card interest rates. Most people have to borrow heavily to purchase a home or a car as well as ordinary costs of living such as food and gas and wages are not rising commensurate with inflation in prices and interest rates. Therefore, times seem hard to the average voter. Then there is the sharply decreased supply of available housing caused in part by the disparity in owners’ existing mortgage rates compared to new rates should they wish to move up in their housing. Economists’ view of the economy and consumers’ view are based on very different data.
“And inflation is back in the range that the Federal Reserve prefers—it’s at 2.4%, close to the Fed’s target of 2%.”
This is incorrect:
https://fred.stlouisfed.org/graph/?g=EJsH
January 15, 2018
Consumer Price Index and Personal Consumption Expenditures Price Index less food & energy, 2017-2023
(Percent change)
https://fred.stlouisfed.org/graph/?g=twwl
January 30, 2018
Personal consumption expenditures price index and Personal consumption expenditures less food & energy price index, 2017-2023
(Percent change)
“And inflation is back in the range that the Federal Reserve prefers—it’s at 2.4%, close to the Fed’s target of 2%.”
An unfortunate mistake. There is still a significant difference between the rate of inflation and the objective rate of the FRS.
Halloween Shoppers Not Spooked as Economic Slowdown Remains Elusive
NY Times – 5 hours ago