New at Reason

June 28, 2007

Steve Chapman asks Americans why they're perpetually singing the blues.

Comments

|6.28.07 @ 6:21AM|#

before someone points it out as a negative that you failed to overlook, I'll point it out as something that I am not qualified to understand but that will be a talking point. We have a deficit, that alone is enough for some people to assume our economy is bad. I'm doing just fine, and I've actually heard that even though actual gas prices seem high, Americans are spending a smaller percentage of their total income on gas than they used to.

|6.28.07 @ 6:22AM|#

change "failed to overlook" to "overlooked"

|6.28.07 @ 7:37AM|#

You don't know why people are negative about the economy? You all clearly don't follow the economic blogs. The collapse of the housing market and the drying up of MEW (mortgage equity extraction) is starting to have a measurable effect on the American consumer. The combination of MEW and housing-related employment has been the driving force of our economy for the past 5 years.

Beyond this, the article's claim that inflation is running below 3% is full of it. There have been so many distortions in the CPI over the years that this number is worthless. Even putting aside things such as substitions and hedonistic adjustments, the focus on the core CPI has become a farce. I understand that fuel and food fluctate, but that is what moving averages are for. Instead, by ignoring them completely, we miss the fact that people's wages simply have not kept up with the cost of living. Hence their dependence on MEW, which has in turn led to the current mess.

There are similar distortions in employment numbers, such as the life-death model. All in all, I think I will take the opinion of the American people on this matter over these broken statistical models.

|6.28.07 @ 7:42AM|#

The simple answer is that people look at the economy as a whole in light of their personal situation. If someone feels that he's underpaid, doesn't get great benefits, and doesn't have many prospects for improvement, it's easy for him to conclude that the economy sucks. Relatively few care about the unemployment rate or the average standard of living.

|6.28.07 @ 8:12AM|#

What's more scientific than anecdotes? Wife was speaking to a boomer about retirement. Gentleman started saving at age 48 at a smallish rate. Now perceives that the market and the economy are bad, meaning that he is not on track to retire at 65. Throw the bums out. You know, them bums who let you save more if you chose to?

|6.28.07 @ 8:14AM|#

Chapman's piece was excellent overall, but for some reason he misses a few obvious points: the economy is doing well, but household income, except for the those at the top, has scarcely improved over the past six years. Also, the stock market is higher than it has been, but is still lower than it was seven years ago. Back in the Clinton days, when household income for "average" folks was increasing, the stock market was hitting new highs every month, and the country was not stuck in a debilitating foreign war, life really was better.

|6.28.07 @ 8:42AM|#

...MEW (mortgage equity extraction)...

What's the "W" stand for?

|6.28.07 @ 8:42AM|#

1- President Bush is incompetent economically as a wastefull spender. Meager tax cuts can't cover that up.
2- We should be always looking for better, complaining and wanting more--that is what moves things forward. If we worry about housing bubbles and think stocks are overextended and there is an impending crash that is smart. If we bitch about the president spending, abuse of power, dragging war this is healthy. If we constantly think things can be better or should be better that is why we are moving in that direction. And we always look over our shoulder--holy shit Japan is going to take over the world!! (1980's-early 90's). Now it's china but hey it keeps a fire lit under our ass.

Better to have people complain about good times than put up with crap and be satisfied with "lack of bad". If you have that then you have Belarus, North Korea and the like. Those folks are beaten down so much they just take it in the pipes and roll over. They don't have much of a choice--thankfully we do!

JohnD|6.28.07 @ 8:45AM|#

Sorry Alan, but you're wrong.

Under Clinton I paid much higher taxes. I now have more disposable income to spend or invest as I see fit. And at the end of Clintons term, we were headed into a recession and the DotCom bubble had burst, causing investors (speculators really) to lose billions of dollars to poorly conceived companies with no viable business plan.

In addition, the country has been through some trying times thanks to the muslim fascists trying to distroy us. And don't anyone give me that shit about "if we weren't in Iraq" because that doesn't fly. We weren't in Iraq when the Twin Towers went down, or the World Trade Center was bombed or the USS Cole was damaged.

Were the hell was Clinton then? The terrorists feed on our weakness and thanks to the Democratic party we are going to see a hell of a lot more terror in the future.

|6.28.07 @ 9:04AM|#

Walker,

I agree that CPI isn't great, but come on. People aren't carrying household debt because of gas prices. Take out the 'hedonistic' adjustments, and I'd suspect you have nearly a non problem.

|6.28.07 @ 9:20AM|#

Hmm do ya just think that the msm might be inclined to report on the negative when someone they loath is in office? Do ya?

ed|6.28.07 @ 9:55AM|#

the stock market was hitting new highs every month

That tends to happen with a bubble economy. "Irrational exuberance" followed by a crash. Yeah, the Clinton era was like a frat party for a while, followed by the inevitable hangover. OK, enough lame metaphors.

|6.28.07 @ 10:21AM|#

I often criticize people for being poor students of history, but here it seems like we're almost too good of students. My take is that people are used to good times being followed by a "readjustment" where the economy takes a little dip for a while and we really haven't had that. Commenters on economics blogs seem to me to be expecting the housing bubble to burst with hope of relief. Really, relief.

I don't quite see this as a bad thing, because I like to think that economies can do well even if people a) don't understand them, b) hate capitalism, and c) are pessimistic.

I'd hate to think that markets collapse because we are clapping for them.

But yeah, it does make it hard to sell the idea that we don't really need gov't interference when everyone thinks the economy sucks.

|6.28.07 @ 10:21AM|#

are clapping for them = AREN'T clapping

Good morning for completely typoing your way out of a point.

Lord Jubjub|6.28.07 @ 10:30AM|#

umm. . .the stock market has been hitting new highs every month so far this year.

|6.28.07 @ 10:45AM|#

It couldn't possibly be that people are not optimistic about the future because:

1. Whenever they buy something, the tag says "made in China".
2. Corporations are investing OUS in research, manufacturing, not in their community.
3. They see a huge debt (to China) being piled up via Iraq, with no end in sight.
4. They see America falling behind in various areas of research, such as medicine, electronics, automotive, ...
5. They see how easy it is for the prices of gas and food to go up for no real reason (or at least none that makes sense.)
6. They see the effects of global warming already, and nothing being done.

How blissful can you be when you see indebtedness, uncertainty, and a future devoid of promise looming over your future?

4. They've been screamed at by the righties that Social Security will go bankrupt just when they might need it.
5. They've been screamed at by the righties that muslims are going to come and kill them -- and the current administration doesn't seem to be making this less likely.
6. Now they're being scared by the righties with illegal immigrants coming to swamp their school systems, welfare, ...

If you rule by fear, you can't really expect joy in those ruled, now can you?

|6.28.07 @ 10:59AM|#

Just to clarify -- I'm not claiming any of these things are factual, they're observations of things people have said. But then, when we're talking about confidence in the future, perception is the whole game.

Also, yes, I am numerically challenged. Never could count properly past three -- probably due to the study of mathematical logic.

|6.28.07 @ 11:00AM|#

Wasn't there a poll recently that actually showed Americans are much more optimistic about the future than people in other developed countries (particularly western Europe)?

Randolph Carter|6.28.07 @ 11:00AM|#

I was abouts to say... except for the NASDAQ, the indexes are doing record-breakingly well.

|6.28.07 @ 11:27AM|#

Things in the USA right now are about as good as they get. Folks who bitch about today's astonishing prosperity are going to be shocked when _real_ hard times hit, as they always do sooner or later.

|6.28.07 @ 12:35PM|#

As someone who's worked and lived in the third world I agree that times are damn good right now for most Americans. But I'm also old enough to remember the 50s and 60s when all you needed was a high school education and you'd get a good union job that provided incredible health care and wages and allowed you to buy houses, cars and boats and education for those baby boomer kids. I had an uncle who shoveled guts in a meat packing plant and made a very good living doing it. Well, those times are gone, and I understand why they're gone as the inevitable gales of creative destruction buffet. The fact is that over the long run the living standards of Americans will decline relative to the rest of the world and a freer economy is also a riskier economy. Those features make people nervous.

|6.28.07 @ 1:24PM|#

"I was abouts to say... except for the NASDAQ, the indexes are doing record-breakingly well."

Only in nominal terms, Randolph. The value of the dollar has crashed by about 1/3 in the last few years. When valued in other currencies (Euro, Yen, gold, etc) the dow has crashed.

"No inflation" is a laugh. What do you call the run up in the price of housing? The money supply has exploded, and it is the supply of money that determines inflation.

|6.28.07 @ 1:40PM|#

My thesis:

People are bummed about losing a war. Not being in Iraq, but being in Iraq and not winning.

People are bummed that they have reached the end of the heretofore endless supply of equity credit they've been using.

People are bummed because they haven't saved crap and they are getting older.

People are bummed because they haven't saved crap and they can see themselves needing medical care. Demographically, many have buried their parents recently.

People will make themselves feel better by laying waste to the incomes of young workers. Problem solved.

jomama|6.28.07 @ 1:57PM|#

It appears a whole lotta numbers have been
fudged.

Maybe the public is starting to catch on but
I suspect it's more of a feeling than much
concrete evidence.

|6.28.07 @ 2:27PM|#

The official national debt figure is approaching $9Trillion and it reflects only what the gov't owes in current debts on funds already borrowed from the Fed Reserve - this figure doesn't include what the gov't has promised to pay in entitlement benefits down the road.

Those future entitlements put the real debt figure close to $50Trillion - which is roughly equal to all of the household net worth of the entire country.

Your share of this debt is approximately $175,000.00.

Ron Paul for President!

|6.28.07 @ 2:31PM|#

Okay all you non-believers of the quality of gov't economic stats. Please view the following.

http://www.shadowstats.com/cgi-bin/sgs?

See for yourselves.

When you artficially supress inflation, you arftically keep bond yeilds lower. Do the freakin math.

|6.28.07 @ 2:32PM|#

No mention of the CPI growing out of proportion to income for the last several years. Inflation has been here for years, slowly gaining steam, and is about to flatten us.

Fuzzwah|6.28.07 @ 2:47PM|#

"Cognitive Dissonance" - the perception of incompatibility between two cognitions, where "cognition" is defined as any element of knowledge, including attitude, emotion, belief, or behavior.

On the one hand we have all this direct evidence that things are getting pretty grim for regular people earning regular paychecks.

On the other hand we have all these government supplied statistics telling us that everything, on average, is great!

Which to believe?

Me? I prefer to go with my own experience and I can tell you, beyond a shadow of a doubt, that for my family inflation is running closer to 8%-9% than 3%. Our local farmers, who will bend your ear while brandishing receipts as proof, can demonstrate yr/yr inflation rates of ~30% for their primary costs (feed & fuel).

So, I apologize in advance if anyone finds this offensive, but I chuckle at articles like the one above that struggle to connect reality and government economic statistics. Can't be done. Don't bother.

Anyone who cares about this subject owes it to themselves to read this highly entertaining interview with John Williams who explains the ins and outs of the manipulation of government statistics.

http://www.shadowstats.com/pdf/779-626538446.pdf

Reading the linked .pdf permanently changed my view on the whole topic of how much faith I should place in government economic statistics. The good part has been that now everything makes a lot more sense - fewer disconnects as I know which reports to immediately discount. The bad part has been finding myself comparing the CPI report to once-upon-a-time Soviet crop reports.

And, no, this is *not* a left vs. right issue as all administrations from Kennedy onward have perpetuated and added to the hanky-panky.

This is a 'right from wrong' issue because lying to ourselves is really going to hurt us badly in the long run.

|6.28.07 @ 2:53PM|#

I don't think "grumpy" exactly describes the prevailing mood in America. "Apprehensive" might be more accurate. Huge numbers of us (ants and grasshoppers alike) are one serious illness away from bankruptcy. The Federal government is running up bills that our grandchildren will still be paying off. Environmental and consumer protections are disappearing in front of our eyes. Every institution appears to have been hijacked by the super-wealthy and their ideology-crazed enablers.

And you wonder why even those us in comfortable circumstances aren't singing a happy tune?

|6.28.07 @ 2:56PM|#

I believe that the human mind needs a certain amount of conflict to remain sane, even if the mind has to invent said conflict.

In that sense, one could say that 24-hour news channels are an addictive, but useful substance. I'm a fat and happy American who pays the bills every month and basically has an overabundance of every material need and want...so I can go to CNN and feed my need for anxiety by worrying about Palestinians, global warming or Scooter Libby, even though such things have no perceptible effect on my own material well-being.

Pete|6.28.07 @ 3:05PM|#

I think the economy is doing poorly, here's why. Yes, the stock market is at record levels, but the average person, such as myself, are not reaping any rewards from this. The high stock market is a sign of Corporate profits and wealthy investors becoming even wealthier. When I can't even afford to buy a house how can I afford to invest in the stock market?
I think what is happening in America is that ther rich are becoming the super rich and the middle class is slowly falling towards poverty.
So although the economy may be booming for the top 5%, it is really bad for the other 95% of us.
Just ask why is that now it takes both parents to work just support a family? It was never like that during the "recession and inflation years" of the 70's and 80's.

Big Nurse|6.28.07 @ 3:06PM|#

I hate it when people say "presidents don't have that much power over the fortunes of the economy". When you have the power to approve or reject taxing and spending in a $3,000,000,000,000 budget, yeah, I would say you have at least a little power over the economy.

|6.28.07 @ 3:12PM|#

Note. That you don't trust government incentives when it comes to statistics is fine. To proclaim that you are better off extrapolating from your own experience and anecdotes of selected parties, many of whom are beneficiaries of government handouts, is a mistake of another kind.

Some wages are growing and some aren't. Core inflation is defnitely a part of the story. I suspect total compensation is doing pretty well, but much of it is going into health plans.

|6.28.07 @ 3:13PM|#

Pete,

You don't participate in a 401k or contribute to an IRA?

|6.28.07 @ 3:15PM|#

Also,

Are you paying for broadband? Cable or satellite? Have an HD set? How many cars do you have? How many children do you have?

My guess is that you have a ton more stuff than you had in the 70's, and you are paying for it with two incomes.

|6.28.07 @ 3:57PM|#

Citing overall employment numbers to support the idea that the economy is humming is a sure sign the citer is FOS. The jobs being created are mostly low-wage service jobs.

Let's see:
1. Real wages are down.
2. Benefits are being cut back -- pensions, health care, etc.
3. Consumer debt is at an all-time high.
4. Now the air is leaking ouit of the housing bubble.
5. Inflation's only low if you don't count FOOD and ENERGY.

Good luck with selling that BS. I see an article touting this great economy about every two weeks or so. But saying it don't make it so.

Fuzzwah|6.28.07 @ 4:00PM|#

Believing your own experience when it conflicts with what you are being told is a 'mistake'?

Since when?

That brings to mind an old Richard Prior routine when his wife catches him right in bed with another woman which he fervently denies finally exclaiming "Who are you going to believe, me or your lying eyes?!?".

:)

It is painfully obvious that our country is on the road to ruin so the only mistake I see is in pretending otherwise.

We have a different future available to us, but as long as we continue to deny the obvious the less time remains to take that different path.

This is no time to be a well behaved consumer. It's time to flex the old citizen muscles.

So - yeah - I'll go with my own ability to plumb the available data and derive my own conclusions over statistics that are delivered with a big heaping of conflict 'o interest.

|6.28.07 @ 4:01PM|#

I agree With Pete. The economy looks great. The per capita income looks great but thats only because the divide is so great. When the strong majority of the contry earns well less the 30,000 a year(myself included) they are going to think the economy is bad. WHat good is being employed if you only make $7 dollars an hour. I would guess that that the replies to this article are being made by people that make no less then 50,000 a year and the authors intended audience are dolts. And many people with no skills can actually pull in more money from Welfare then a Mcjob(it is much cheaper to live with no income then with even 17,000(girl I worked with went from part time to full time and she couldnt afford to live after her rent and day care tripled)). Sometimes I wonder just how far from reality the upper half is.

|6.28.07 @ 4:13PM|#

Yes. Only an idiot will follow blindly but since critical thinking is discouraged we will be good sheep and listen to the numbers we are told.

|6.28.07 @ 4:19PM|#

The reason the majority of the public believes the economy sucks is that the disparity between what companies earn and what they pay their workers is at its worst point in 30 years. So when someone tells you they are doing better it generally means they are working a job at which part of the compensation is tied to the company's earnings. Bonus babies and what have you. Also, I'd like to see what the stats are on which jobs these people who have come off of unemployment are working. Are they subsisting on Walmart wages? Or did they just simply have their unemployment benefits run out, preventing them from being counted?

Basically, the rich are getting richer and everyone else is staying exactly the same.

|6.28.07 @ 4:29PM|#

It is clear that the author doesn't live in Michigan - he would understand why people are gloomy.

|6.28.07 @ 4:35PM|#

"Believing your own experience when it conflicts with what you are being told is a 'mistake'?"

You can't demonstrate anything about 'the economy' based on a handful of data points. You can't claim green tea cured your cold just because you personally drank some at the same time your cold passed. You need a meaningful sample, and when you extrapolate from your own experience you are grossly biasing the picture.

Fuzzwah|6.28.07 @ 5:03PM|#

"You can't demonstrate anything about 'the economy' based on a handful of data points."

You are wildly off the mark.

For this particular thread I'm not trying to demonstrate anything "about the economy".

I am demonstrating the the government CPI figures are false and misleading.

The precisely correct way to do that is with "experience" or data.

I would direct you to the data, but I doubt you'd bother to read it (hint: I already provided a link *packed* with data which you have not bothered to read while maintaining your lecturing perch).

I am deeply familiar with the data since I am very active financial market participant and a past scientist (PhD, Pathology) who has given data-centric seminars on 'the economy' for the past 4 years.

And you? BEA statistician by chance?

I hope so since here's one random piece of data (out of many) that does not make sense which you could hopefully explain.

The government reports that Wheat has gone up in price 16% over the past year (http://www.bls.gov/news.release/ppi.t02.htm).

However in the futures market, where wheat is actually bought and sold, wheat is up 61% (http://futures.tradingcharts.com/chart/CW/W).

What accounts for this? Does the government have something to teach the grain market participants about buying/selling wheat?

I could go on and on and on with example after example after example but what's the point?

I already know from my own personal shopping experience that inflation is MUCH higher than is being reported by the federal government.

To then tie this back to 'the economy' we can say that to the extent inflation is understated the same extent to which GDP is overstated because inflation is subtracted from nominal gains to derive the *real* GDP number.

So yes, to everybody reading this your experiences are real, and they count, and it makes more sense for you to extrapolate from your observations than it does to submit to falsified statistics/data.

Viet|6.28.07 @ 5:13PM|#

how much money do we own china again ? how fast does it grow ? i don't know much about economy, i don't learn the subject, but at least i know losing money is bad. you - the author - don't have to pay for it, but it doesn't mean your children won't. stop throwing out shit that seems to be so "advanced", so "complicated", to cover up the simple fact.

|6.28.07 @ 5:22PM|#

ditto to what Viet said at 5:31pm.

|6.28.07 @ 5:25PM|#

Tell you what. I promise to get into a better mood if you buy my house. It's been on the market for 13 months now.

|6.28.07 @ 5:27PM|#

Oh, and nobody gets to say the word "bubble" to me. It's currently on the market for $30,000 less than what I bought it for, four years ago, before this supposed bubble. At no time was it priced above what I bought it for.

The Robot Collector|6.28.07 @ 5:29PM|#

Great article. There are a lot of opportunities now for people to start their own online stores. Check out the wikihow article at http://www.wikihow.com/Start-an-Online-Store

David Stein|6.28.07 @ 5:50PM|#

Why are most Americans downbeat? Why, the stock market is great, GDP is great, productivity is great, and corporate profits are soaring! What's not to love?

Hmm... maybe it's because those things don't really affect most Americans.

What does affect Americans?

* Employment: Available, yes - but working conditions continue to suffer - long hours, little vacation.

* Wages: Utterly stagnant, despite the fact that corporate coffers are stuffed to bursting and CEO pay remains outrageous.

* Gas prices: Through the roof, and not stoppin'.

* Healthcare and tuition: Also on a steady incline.

* Real estate: Tanking.

* Personal savings: All-time low.

* Taxes: Rising.

So, let's see, that's... yep... almost every factor that could adversely impact the common man is still bad. The only real surprise here is that macroeconomists are so out of touch with what matters to most Americans: "But GDP is high - why aren't you happier?!"...

|6.28.07 @ 6:21PM|#

America is a fake economy with a fake tax rate.

To paraphrase Lloyd Benson, you give me 2.2 trillion in hot checks and I'll give you the illusion of prosperity.

While the economy is indeed doing well, that is to be expected when the federal debt is growing at unprecedented levels. Therefore, it is logical to deduce that when it comes time to pay the piper, the economy will slow down. Another smaller factor is that the influx of cheap foreign goods has kept inflation down. Prices will reach a floor eventually.

Today's deficit is tomorrows compounded tax hike. Therefore, I cannot agree that Bush has done well on the economy.

|6.28.07 @ 6:55PM|#

For this article to be in a magazine called REASON...tells you how much trouble this nation really is in.

The author couldn't reason his way out of a branchless maze.

B
http://b-political.blogspot.com/

|6.28.07 @ 6:57PM|#

@JohnD: So we weren't in Iraq when the towers were hit? You might want to check your facts. We have had a presence there since the end of the first Gulf War. The USS Cole was in the Persian Gulf when it was bombed. Why was it there?

As for the economy, your stats are just wrong. Artificially manipulating the market produces artificial statistics. The cost of living has definitely outpaced wages. Not long ago, $10 an hour was a very livable wage, not anymore. Overall, most people I know are spending less because they have less. Our Federal Reserve corporation system is a farce and is running our country into the ground. Having a debt to foreign banks that we can NEVER pay off, is not the way to run a country. Ron Paul for President!!

|6.28.07 @ 7:05PM|#

@JohnD: "Where was Clinton then?" Well, he was being chastised by the Republicans for "distracting" the public from his domestic scandals. He wanted to go after Bin Laden, but was stopped by the Republican outcry at his "distraction," and his wanting to "nation build" over there. These same hypocrites, like yourself, then claim he was "soft" on terror. Oh, how quickly we forget.

|6.28.07 @ 8:56PM|#

Reason Magazine, eh? Never heard of it, but it seems to be some kind of satire.

In acient Rome they had a problem with slaves slipping away and disappearing into the masses (slaves looked a lot like everyone else there). They thought maybe they should make the slaves wear a patch or an armband or something. Upon thinking about it, the slave owners rejected the idea. Do you know why? Hint: It's the same reason we pretend so much that we are a classless society. They don't want us to see how great our numbers are lest we rise above the corporotacracy and turn things around.

|6.28.07 @ 8:57PM|#

It's obvious that he's on the other side of the rift from me and mine based on this statement alone: "...what is bad for home sellers is good for home buyers. Most of us are both..." [emphasis mine]

I'm not going to be able to buy a home in my life save some sort of miracle. I've done everything to minimize my expenses: no car, no cell phone, no cable, steal wireless internet, skip meals, eat raman, and still I pay $125/month to state and federal government in taxes for things that I mostly don't support them doing. Strange.

|6.28.07 @ 9:01PM|#

Words not mentioned in this article about how great things are going with the economy: "salary," "wages," "insurance"

If you don't think this guy's a joke, you probably have a lot more money than most of us.

|6.28.07 @ 9:03PM|#

Look at real wages, they've barely budged in 6 years. Generally speaking, in my opinion people know if they're doing good or not. So while times have been worse for sure, and were certainly worse in the 70's when real wages dropped like a stone, times could be better too. Bush and the government is screwing the little guy through chronic inflation (although it is low), taxes, and the national debt.

scott|6.28.07 @ 9:18PM|#

Important to note is that economic indicators are averages. One of the most important trends of the past 5 years (at least) has been the decline in real wages for the lower and middle classes, but the continued prosperity of the rich - noone seems to argue that the rich are getting richer, and that this continues not to have the trickle-down effect to bolster the rest of the economy. Reagan's 'rising tide that lifts all boats' was a farce in the 80s, and so is the economic 'good times' the economists point to today. I'd love to see stats run on the modal real income of Americans rather than allowing the top 5% or 2% to skew the averages, I think it would better reflect what most Americans are seeing when they look at their paychecks and pay the bills every month.

|6.28.07 @ 9:28PM|#

Scott, good point. If we took out the top five percent, and to be fair the bottom five percent, the average then is probably going to be a lot more dismal than what this happy-clappy economist is trying to paint.

Rotten|6.28.07 @ 9:42PM|#

Leftists in general are pretty ignorant. You ever hear of the "median"? You should've covered that in statistics... if you're smart enough to discern what that is.

US Ex-Pat|6.28.07 @ 10:11PM|#

The crux of why Americans are so pessimistic on the economy while the economy appears good is that the appearance is simply a snapshot of conditions today, right this minute. What's overlooked is the national debt, particularly exacerbated by the Iraq war; the rampant government waste in areas like DHS; and the looming Social Security and Medicare bill for retiring Baby Boomers.

An analogy would be going to a store and making a fantastically huge purchase on a credit card. The shopper would feel pretty good that day, going home with all those goodies. It's easy to forget what it all cost, and to temporarily ignore the fact that the bill will still come due.

That is the situation the American economy is currently in, and that is why many Americans are so pessimistic. Nobody has outlined exactly *how* the debts for the Iraq war, Medicare, Social Security, and continued DHS trial-and-error will be paid. We can party all we want today, but the bill WILL come due, and it will be HUGE! I predict the cost of Iraq will be a US $trillion at least.

Adam|6.28.07 @ 10:16PM|#

@Rotten

I'm well aware of what the term median means, but I have no clue what you are alluding to.

Leftists? What does politics have to do with it? It's about rich and poor. Besides, by my definition of conservative I'm more right-wing than anybody in Washington except Ron Paul.

I don't think terms like left, right, liberal or conservative mean anything. I hold personal viewpoints. Pigeon-holing your entire philosophy and summing it up in a single label is for unthinking fools.

|6.28.07 @ 10:31PM|#

The median is a good measure of how the average citizen is doing and is not skewed by the extremes like Bill Gates. I guess I should apologize for the label, but this article has attracted some real kooks.

wsdave|6.28.07 @ 10:46PM|#

JasonL,
"Also,

Are you paying for broadband? Cable or satellite? Have an HD set? How many cars do you have? How many children do you have?

My guess is that you have a ton more stuff than you had in the 70's, and you are paying for it with two incomes."

Regardless of any specific circumstances, I agree with you. My wife and I have a child and house, 3 cars and a motorcycle, cable and high-speed internet, and all on 1 income (and only about the national average at that...since I don't really understand the difference between average and median and medium and medium-rare, I'll just leave it at that.)

We are able to do this because I stay home with the girl (eliminating child care costs), I can fix anything that goes wrong with any of the vehicles (the NEWEST of which is 14 years old and only cost $300), and I can do all the home and yard work, including plumbing, elecrtical, concrete, and woodwork. My wife cooks, bakes and sews. She speaks 3 languages and does art and music.

In short, we have a pretty good life on not a lot of money because we have (if I have the term and spelling right) "Renisance" skills: Which is to say,unlike most people today, we can actually do stuff.

Adam|6.28.07 @ 11:01PM|#

Okay, I agree that the median is generally a better indicator for how the average citzen is doing, I agree that you should probably apologize for using a label, but everyone here seems fairly sane compared to the flame wars developing over at fark about this article.

|6.29.07 @ 7:52AM|#

this economy totally sucks period

Fuzzwah|6.29.07 @ 8:00AM|#

The FARK discussion is like attending an ignorance swap meet.

|6.29.07 @ 9:00AM|#

fuzzwah:

You have a PhD in pathology and you don't believe in sample bias? You just go to the store yourself, buy some bread, and make proclamations about deducting your Butternut price hike from GDP?

I'm not going to argue about wheat or any specific good. I'm not even saying that CPI is a good figure. I'm saying that taking your personal experience to be indicative of what everyone is experiencing is a mistake at least as fundamental.

|6.29.07 @ 10:37AM|#

Who can believe anything the gov't puts out?
Income has increased significantly for a very small percentage of Americans. The highest 1% especially (the Cheneys of the world) If you have hdtv and two cars and a house etc. it appears that you are doing well, but how much of that is on credit? Probably most of it.
Most of us probably have more than we need. The question is; how are we paying for it?
As another poster said, most of us are just a serious illness away from bankruptcy.
Life is great if you are a member of the investment class.
As for unemployment, do those numbers reflect the total number of unemployed, or just the people currently getting assistance?

|6.29.07 @ 12:28PM|#

Economic growth is only obvious to the singular average American, for knowledge about everyone else is doing he turns on his TV set.

And when he turns on his TV set, all he hears about is doom and gloom about the economy. Economic reporting during Republican administrations is overwhelmingly negative and it is not suprising that the majority of Americans have been brainwashed into thinking there is a recession.

Michael P. Miale|6.29.07 @ 2:19PM|#

My theory: blame the media. In the era of a virtually omniscient press corps located all over the world, easy Internet access, and the ever-growing ravenous beast of the 24 hour news cycle which renders the day's newspaper obsolete by the time you read it, we can now learn about pretty much every horrible thing that happens everywhere on Earth within minutes of it happening.

And as anyone who has ever worked in the press will tell you, "if it bleeds, it leads". Prosperity and little puppies being rescued from trees just doesn't sell these days.

|6.29.07 @ 3:06PM|#

Once again, leftists are ignorant. The unemployment rate has NOTHING to do with unemployment insurance. NOTHING, do you idiots get that? The unemployment rate is determine by way of a telephone survey. Please get educated before you spout off ignorance.

|6.29.07 @ 3:52PM|#

I think the narrative will change when we have a Democrat in the White House.

We are in a unprecedented broad based growth pattern. Hard capital purchases by businesses are surging. inflation remains in check even in the face of high energy costs. It's the politics not the numbers. Why is this not even discussed in the article.

|7.1.07 @ 6:51AM|#

Whats not to love about our economy?

Chocolate rations are to be increased by 2 grams next week
Production of Big Brother heavy bombers is up 28%.
Victory Gin consumption has dropped 13%.
And on the Malabar front, our glorious leader announces the capture of 185 thousand East Asian war criminal fighters.

All thanks to Big Brother for such fine statistics. No wonder we are all happy.

|7.1.07 @ 7:19PM|#

Personal debt is one reason people are aprehensive and dubious about the economy.

Many Americans are buried in credit card debt.
Many, if not most, owe more on their cars and homes than the market value. And along with their mountainous debts, is the knawing fear that they're only a pay check away from financial disaster.

There's little hope that they'll be able to afford their children's college tution, and a financial crash is sure to follow if any family member has a serious health problem.

They also realise that their livlihood is totally dependent on the whims of bosses who don't give a damn about them, and would, if possible, replace them in a minute for someone willing to work for less money.