The perversity of the American economy - should I be happy or sad?
This morning on CNBC, it was reported that two indicators of economic growth and activity were both down. Commentators were quick to announce “doom and gloom”, and began playing the “Blame Obama” game (what else is new?).
So I suppose that to an economist, or to a Republican, these figures were in some way negatives.
However, it has been very obvious that when the economy is “good” (to these same economists), I end up paying more for gas, more for food, and so on and so forth. My salary hasn’t changed in five years, so a lousy economy is actually better for me personally, in terms of daily costs of living.
So which is it? A booming national economy damages by personal standard of living. A struggling national economy gives me more disposable income.
Should I be happy or sad?
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14 Answers
Depends. What’s your industry?
If it’s construction, be sad. If it’s hospitality, be happy.
Each person’s economy is different. And most people’s economy does not fluctuate wildly each month based on minor trends in the national economy.
Make your happiness out of your personal situation, not on the national economy.So manufacturing in NY is off a bit, but Google’s share price went above $900 this morning, and we’re not in Europe where the recession has resurfaced. We’re doing pretty well.
Oh, and Bloomberg just announced that Homebuilder confidence levels went up last month.
Personally, I think you shouldn’t be happy or sad. The economy is what it is —good one day, bad another, probably terrible overall and destined to get worse in the future.
But maybe not.
Be sad. Economics is not a real science. It is a belief system along the same lines as telepathy and prophecy. Personally, I think the term “Voodoo Economics” describes the entire field brilliantly.
We need new paradigms; new ways to measure success and progress.
In my opinion, neither.
The economy has cycles. Like the weather. Like life in general. When times are good, enjoy them. When times are bad, hang on, do your best, and wait till times get good again.
And while you are waiting, look for opportunities. The reason they get good again, is that when they go bad, new opportunities appear.
A perfect example of this is the housing/mortgage catastrophe of a couple of a few years ago. Houses dropped in value, people were foreclosed on, and an entire chunk of the economy associated with home ownership (hardware, appliances, repair, etc etc went down with it.
But, suddenly there were cheap houses on the market. So gradually people began to buy them at the new lower price. And now the attached industries are coming back as well. It’s like a roller coaster.
I heard the news, and like @josie says, it’s a flash in the pan. They just have to make hair-on-fire news out of it. Show some respect. Imagine the challenge of injecting drama into reciting the leading economic indicators for each successive month.
I’ve got to take issue with your basic premise here. You say you haven’t gotten a raise in 5 years and you have more disposable income. I don’t see how. The price of gas has doubled in the past five years and the price of food has continued to rise. I would equate the lack of a raise to the bad economy and if you own a car, your gas bill has to have eaten into your disposable income. Food is definitely more expensive as well.
You may be assuming that core inflation has been low so your doing better but remember that core inflation does not include food or gas. They exclude those things as being too volitale. Whether your happy about all this or sad is your call. But if you saying you have more disposable income, you must have inherited something.
@Jaxk The price of gas has not doubled since 2008. This chart shows the higehst average gas price was in July of 2008.
@Jaxk -
a couple of points:
1) I’m not talking about artificial measurements like core inflation blah blah, in relation to my own personal situation. I’m talking about my bank balance at the end of the month, after the mortgage, food, power, entertainment, etc.
2) It may be that I’m jut making smarter, better purchases rather than throwing money away on alcohol and women
I suspect your making different choices but I wouldn’t say that alcohol and women were necessarily bad choices.
@Jaxk Another one of those rare moments when we agree. Alcohol and women can lead to a type of inflation I find very welcome. :-)
@elbanditoroso Further to the good news / bad news story, as Slate Magazine notes, while housing starts were down, new building permits were way up.
A good woman can make you feel strong and virolent, virtually invincible. she can make you feel both attractive and intelligent. She can make you feel as though you are the center of attention both funny and articulate. She…....... wait, I’m sorry, I’m thinking of whiskey. It’s whiskey that does all that.
@Jaxk – i’m rolling on the floor laughing at your last answer
Gas and food are still far too cheap. The price doesn’t include their damage.
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