Tired of the Economy

Thoughts on the Vibecession and Related Matters

For many years now, political and economic commentators have been puzzled by the apparent disconnect between the actual data about the performance of the U.S. economy and the indicators about how people feel about the economy. The problem emerged during the Biden years, when there is a widespread consensus among center-left commentators that the economy was managed about as well as it could have been under the circumstances. But even under Trump, liberal commentators have been forced to concede that the economic underperformance created by his abitrary policies has not been quite as bad as measures like consumer sentiment and approval ratings would indicate. In other words, this disconnect is remaining persistent across administrations and policy regimes.

Broadly speaking, the tendency among liberal commentators has been to emphasize emotional and irrational factors, often shading into the territory of scolding the public for responding inappropriately to the statistics, while many more left-leaning writers have sought to find some kind of justification in the data for people’s reactions. These two approaches are exemplified in a recent exchange between Paul Krugman and Mike Konzcal. In a post on his almost disturbingly prolific Substack this week, Krugman suggested that the same effect has two different causes—under Biden, it represented the population’s disproportionate hatred of inflation (even inflation largely compensated for by wage increases), while under Trump it reflects the sense that they had been lied to. Konzcal countered by trying to find patterns in the data that would account for a disproportionately negative view on the economy, even conceding that workers were, statistically speaking, made whole for inflation by wage increases.

The less readily classifiable Daniel Davies then weighed in, suggesting that such a long-standing phenomenon must have longer-standing causes—for instance, the effect of skyrocketing housing prices on the attainment of common signifiers of adult independence. In this view, even individuals who are doing relatively well would feel that the economy is, on some level, not working as it should if young people cannot afford to buy a house and start a family at a reasonable age.

I think Davies is probably on the more promising track here. Krugman’s attempt to posit two separate causes for a more or less continuous phenomenon smacks of a certain desperation, while Konzcal’s data-driven exercise seems to presuppose what it wants to prove—namely, that individuals are responding reasonably to aggregate economic conditions. But even Davies is not really talking about the specific window of time in question here, since the trends in terms of housing prices and household formation predate the inflation spike.

I’d suggest that we may be looking at the wrong inflection point—or rather, the wrong event at the right point. Yes, the dissatisfaction corresponds to inflation, but inflation was a byproduct of the massive life-changing world-historical event known as “the pandemic.” That observation may account for the puzzling fact that a similar vibecession did not afflict the American public during the Reagan years, despite even higher inflation. Simply put, there was not a global pandemic in the late 1970s or early 1980s—and even if there had been, people would not have been able to lock themselves in their houses, consuming an endless torrent of misinformation customized for their own personal prejudices and weaknesses.

My first theory of the vibecession, therefore, is that it reflects a discontinuity in people’s relationship to information, caused by the lockdowns and the resulting obsession with social media. It’s not just that people are choosing the partisan realities they prefer—if that were the case, we wouldn’t expect such continuity in vibecessionary effects between Sleepy Joe and his maniacal successor. Indeed, I think it’s fair to say that the pandemic didn’t break the spell of a shared non-partisan public square, because you can’t kill what’s already dead. Fox News had already radicalized the nation’s grandparents long ago at that point.

What the pandemic did shatter was the authority of expertise. This is most evident in the case of medical expertise, as scams and misinformation proliferated and even valid causes and concerns (like long COVID) spontaneously morphed into conspiracy-like identity signifiers. What is striking in this phenomenon is that trust in medical advice as such has not declined. Indeed, if anything, it has greatly increased, as people throw themselves wholeheartedly into whatever bullshit comes along, often seamlessly pivoting between quack remedies without noticing any contradiction or admitting previous error. The one requirement for such trust, though, is that it must not come from the mainstream medical establishment. Everything is worth trying, everything “might help,” except for what a typical doctor would prescribe for a typical patient.

I think that something more subtle is at work here than a simple distrust of a certain group of purported experts in favor of, well, anybody else. The issue is not one of content, but of form, not one of the messenger but of the type of message conveyed. In conditions of a once-in-a-century global pandemic, the one thing people wanted was certainty. They were scared, and they wanted to have some ability to know they would be safe.

Unfortunately, such certainty was not available. This is not simply because the novel coronavirus of 2019 was a new phenomenon and no one can immediately know everything about a new phenomenon, and not even because the novel coronavirus was a moving target due to the realities of evolution. In the last analysis, medical knowledge is not like that. The true determinants of health are not known to us with the level of certainty desired. All the medical profession can do for us is to place us within a Venn diagram of overlapping standard deviations and prescribe something that was shown, within a certain standard deviation, to have some level of effect within a similar Venn diagram of overlapping standard deviations.

Doubtless the medical profession—and especially public health officials—made mistakes that undercut public trust in their recommendations. Indeed, the achieved the rare feat of a bipartisan consensus against CDC recommendations, on the right because they were too strict and on the left because they were not strict enough. But even in the very best case scenario, they simply could not have delivered the kind of medical advice demanded by the public, because that kind of medical advice does not exist. Medical advice is always statistical and probabilistic. It will never be a unique, customized response to full empirical richness of your reality as a person—even in a utopian luxury communist Medicare for All regime in which there is a 1:1 doctor to patient ratio across the entire population and every desired procedure is automatically paid for. Anyone offering you absolute certainty about your health is lying to you. And in a moment of profound cultural disruption and fear, people decided that they valued the sensation of certainty more than they valued the truth.

In that context, my first hypothesis for the vibecession is that people are not responding reasonably to economic data simply because it takes the form of professional expertise. We can see this when people complain that the data does not reflect their own personal experience. The only possible response to that is: no shit, Sherlock. Aggregate statistical data about a country of hundreds of millions of people does not, cannot, and should not correspond directly to everyone’s personal experience. If wages on average are rising, it’s no counterevidence to say that yours have gone down. The fact that you personally lost your job does not mean that the unemployment rate cannot be declining. That’s how statistics work. They are generalizations about realities bigger than any individual—and we are living in an era where the general public uniquely hates and resents the thought that anything bigger than their own personal perspective should be binding on them in any way.

(At this point, I would like to pause for a moment and ask a simple question: why are we even asking members of the general public about the performance of “the economy”? The performance of the economy is an empirical question that we have standard statistical measures for. To the extent that the state of the economy can be known, it is known through the suite of economic statistics used by business leaders and financial market participants. Are the polling questions a kind of pop quiz? Are they a way to gauge how the media is doing in informing people of important facts about the world? Do they perform any function at all?)

In all these matters, I am fighting against the current. I have followed CDC guidance consistently, even after the dastardly Delta Airlines nearly caused mass genocide by supposedly getting it changed. I get my annual physical, take blood pressure medicine (but no vitamin supplements or diet-based “life hacks” like drinking a ton of beet juice), and read the Financial Times (in print!) with ready trust in the basic information presented on the straight news pages. In short, I am an exemplary Fordist individual, the last lonely excrescence of the postwar mass man amid our post-neoliberal wasteland.

But I would also like to offer a second explanation for the disproportionately negative view of “the economy” that does resonate with my anti-neoliberal heart. Basically, I think that people are negative about “the economy” as such. This is not to say that they share my critique of neoliberalism, nor that they are ready for socialism, etc., etc. I just think that they are tired of hearing about “the economy.” For most of our young century, whenever we have heard about “the economy,” it has been bad news. Even when it is doing relatively well, “the economy” is always a constraint, always telling us what we can’t do. We can’t get rid of the illegal immigrants, because they’re integral to “the economy.” We can’t have Medicare for All, because the tax rates would be ruinous to “the economy.” We can’t leave the European Union or raise trade barriers to encourage domestic industry, because that would hurt “the economy.” Anything that hurts you personally is unimportant, because it helps “the economy” on net.

None of this is new, obviously, and the Global Financial Crisis might seem like a more logical inflection point if this is the complaint. But the Global Financial Crisis didn’t lead commentators to suggest that a certain level of preventable death was an acceptable price to keep “the economy” moving. (Indeed, in the early days of the pandemic, Rick Santelli, whose famous CNBC rant against Obama’s mortgage relief efforts was credited with creating the Tea Party movement, suggested that we should intentionally infect everyone just to get the economic disruption out of the way.) It’s one thing to lose your house because “the economy” isn’t feeling well. It’s quite another to learn that Grandma needs to die to save the restaurant sector, or that you personally are so crucial to “the economy” that you can be required to endanger your own health.

In short, perhaps some of people’s negative reaction to questions about the performance of the economy amounts to a gesture of “fuck the economy!” In this case, however, it doesn’t seem to issue in a quest for false certainty—unless we take the pervasiveness of gambling and get-rich-quit scams as parallel to health and wellness bullshit. Instead, the deeper truth here seems to be that no one believes that anyone can actually manage or control the economy—not Joe Biden, not Donald Trump, no one. It does what it does, more or less at random and without any regard for us or our needs, and we simply have to adjust the best we can. In that context, regardless of what the stats look like, I’m pretty sure people are right to disapprove of the economy.