this post was submitted on 11 Dec 2023
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President Joe Biden goes into next year's election with a vexing challenge: Just as the U.S. economy is getting stronger, people are still feeling horrible about it.

Pollsters and economists say there has never been as wide a gap between the underlying health of the economy and public perception. The divergence could be a decisive factor in whether the Democrat secures a second term next year. Republicans are seizing on the dissatisfaction to skewer Biden, while the White House is finding less success as it tries to highlight economic progress.

“Things are getting better and people think things are going to get worse — and that’s the most dangerous piece of this," said Democratic pollster Celinda Lake, who has worked with Biden. Lake said voters no longer want to just see inflation rates fall — rather, they want an outright decline in prices, something that last happened on a large scale during the Great Depression.

“Honestly, I’m kind of mystified by it,” she said.

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[–] Semi-Hemi-Demigod@kbin.social 9 points 10 months ago (2 children)

I think the takeaway is that the average consumer is not a particularly rational actor (much to the chagrin of economists)

Any field of study that depends on people acting rationally should not be considered a science, nor used to drive policy decisions.

[–] ReallyKinda@kbin.social 6 points 10 months ago (1 children)

The models economics uses fail pretty much all the time so it definitely shouldn’t be considered science in the same way as physics or chemistry. If they were held to similar standards every economic ‘model’ would be tossed out after any rigorous testing (where success for the model would be accurate predictions). Instead they treat their models as ideal types and continue to base them on massive assumptions.

[–] Semi-Hemi-Demigod@kbin.social 1 points 10 months ago (2 children)

The popular conception of economics feels quite a bit like a religion. There's the god of The Invisible Hand™, there's a priesthood of economists, there's the creation myth of barter, there's people's vehement insistence that they're capitalists.

David Graeber's books "Debt: The First 5,000 Years" and "The Dawn of Everything" do a really good job of showing different economic and political systems, and that ours isn't some ideal end goal but one of many possible choices.

[–] winterayars@sh.itjust.works 3 points 10 months ago (1 children)

Graeber isn't an economist and doesn't present his books as a part of economics in any way, though. In fact he criticizes how economists have essentially made up fairy tales to explain things rather than to look at history and understand how the modern world came about in a factual manner.

[–] Semi-Hemi-Demigod@kbin.social 0 points 10 months ago (1 children)

He lays out the history of various economic systems in a well researched, extremely detailed, and anthropological manner. Just because it doesn’t agree with your conception of reality doesn’t make it non-factual.

[–] winterayars@sh.itjust.works 1 points 10 months ago (1 children)

Oh don't get me wrong, I agree with what I've read of him, particularly Debt: the first 5000 years. I don't think he's an economist. I also think that's a credit to him on the whole.

[–] Semi-Hemi-Demigod@kbin.social 1 points 10 months ago

Absolutely. But I think dismissing it as non-economic is short sighted. He begins by searching anthropology and history for the mythical time when goats got too difficult to carry to market and someone invented money, only to find that it’s a myth.

Honestly, the actual history presented is far more interesting than the myth of barter.

[–] jmp242@sopuli.xyz 1 points 10 months ago (1 children)

Given that I find the economists roughly on par with weather forecasters, I really think we have to treat it that way. Like Climate change has thrown a huge wrench in existing weather models causing the forecasts to be much worse - I think if the models ever worked(and that's a big if), things have sufficiently changed to break them pretty badly now.

[–] Semi-Hemi-Demigod@kbin.social 0 points 10 months ago

A lot of our systems, both physical and governmental, were developed for a world that no longer exists.

[–] KevonLooney@lemm.ee 4 points 10 months ago (1 children)

Good thing modern macroeconomics doesn't depend on that. People only have to be semi-rational. I. e. they may not examine all possible options in a market, just a few, and pick the best one. The results are almost the same.

It's wrong to say that "consumers are not rational". That implies that their choices are potentially random. We know that they're not, because people are complaining about not having enough money. Which is rational.

[–] Semi-Hemi-Demigod@kbin.social 2 points 10 months ago (1 children)

It's only rational if you accept that what they want is actually money. They don't want money, they want a safe place to live, good food to eat, health care when they feel sick, someone to teach their kids, free time to pursue the things they love, and security that these things will be available for the rest of their lives.

The only reason they want money is because that's how you get those things in our economic system. People don't want money for the sake of money, at least for the most part.

[–] KevonLooney@lemm.ee 0 points 10 months ago (2 children)

No part of economics assumes that people "want money". If that were true, there would be a lot more printed paper money in circulation.

Utility curves use prices for goods to find the maximum value of "happiness" or "satisfaction". Rationality, in Economics, mean that people's actions conform to their utility curves based on current prices.

Basically, if you like apples (or whatever) you should pay more for them than other goods, comparatively. That's rational because your actions follow your preferences. Nothing to do with "liking money".

[–] jmp242@sopuli.xyz -1 points 10 months ago

if you like apples (or whatever) you should pay more for them than other goods, comparatively

I just don't think this happens that much necessarily though. Mostly because of necessities taking up such a huge percentage of peoples budgets.

I also find myself and see others kind of have a "I Like X more, but not enough to spend Y for it". This doesn't necessarily imply it's a utility curve, I often find myself thinking it's more of an anchoring psychology effect. I.e. you at age X get used to a Combo meal at the local fast food place costing $10. If it "frog boils" over say 20 years to $20, you'll bitch about how "back in my day"... If it doubles in a year, like many things have - it just seems way more like overcharging and the utility curve is all out of whack.

I'll tell you one thing, the service at fast food places has fallen so much where I live that if I can't get their app to work to pre-order so I can waltz in and just grab it, I'll go somewhere else. And the cost has gone up so much that I've been actively comparing to fast casual app based pick ups or hell, sit downs because the food is usually somewhat better and they're often no longer massively more expensive or slower.

[–] Semi-Hemi-Demigod@kbin.social -1 points 10 months ago

Ah, okay. It's not "rational" it's "Rational™" which is an economic term. Kind of like how Magnetic Attraction™ isn't them wanting to fuck.