Much has been written over the last couple of years about the economy and the difference between how the economy is performing and the perception of how the economy is performing. Specifically, why is there such a disparity between how the economy is doing and how people say it is doing?
First, how is the economy doing? GDP grew 5.9% in 2021, stimulated by PPP loans, then 2.1% in 2022. For 2023, the GDP increased 2.2% in the first quarter, 2.1% in the second quarter, and 4.9% in the third quarter. (These are all annual rates, so don’t add them up.) That third quarter increase was driven by consumer spending and inventory investment by businesses. Normally when the economy is bad or a recession is looming, consumers don’t spend, and businesses don’t bulk up on inventories.
But what about inflation? This was a big concern during 2022 and early this year. After all, inflation was at 6.5% in December 2022. Since then, inflation has been fading fast. The latest inflation figures are a bit over 3%, while the Fed would like to get it down to 2%.
Unemployment? The current rate is 3.9%, which is about the same as the rate during 2022. The last time I took an economics course, 4% was considered full employment. Four percent being the normal number of unemployed people in the economy due to normal transitions and friction.
Meanwhile, polls show that most Americans feel the economy is not good and getting worse. With the strong divisions in America, about half of voters will be unhappy just because their guy isn’t President. There is also a lot of cynicism due to the widening gap between the halves and have-nots.
Of course, even many of those who think the economy is good may think we’re headed for a recession in 2024. I’m hesitant to predict a recession in 2024, simply because my history is not good. I think I’ve predicted five of the last two recessions.
So, we’re left with an economy that is good by any objective measure, but a majority of the populace think the economy stinks. One interesting thing about the polls is that people think they are doing pretty well, but the economy as a whole is poor. We’ve got a political divide that is probably the worst ever, which accounts for much of this disparity. But is there something else going on?
As the title to this blog asks, “Have we become a nation of whiners?” I think the answer is yes. Things are going well and we’re still, as a country, whining. And it isn’t just the economy. We’ve lost our tolerance for opinions different than our own.
And then the Karen phenomenon. YouTube is filled with videos of “Karens in the Wild,” exhibiting all kinds of bad behavior. Are Americans just unhappy?
When I was in Africa, I witnessed bad driving like I’ve never seen before. Fortunately, I was just a passenger. But in the midst of all this terrible driving, no one got made. The other drivers were tolerant and typically bemused. I get back home, and the smallest of supposed slights results in middle fingers and worse.
What is wrong with us? Are we just that spoiled? Maybe Amazon shipping anything we have a passing whim for to our doorsteps with a couple of mouse clicks has trained us to get anything we want, right now, with little effort.
If I had the answers, I’d run… No, I wouldn’t. That would be way too much work.
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