Economy Perception And The Presidential Election

[selmaborntidefan]

One of our fine posters here may have theorized the same thing (and I didn't see it) and let's make it clear before the post that I know basic economics at best, and I'm nothing close to an expert as my bank account would prove.

The economy was growing in the third quarter of 2024 at 2.8%, slightly above the summer 1992 rate of 2.7%, the year Clinton beat Bush (and Perot) running on the economy. Of course, other numbers are different. While inflation was not so bad in 1992, unemployment was over 7% as opposed to slightly above 4% right now. (Folks wondering, "How did Reagan win a thumping landslide in 1984 with unemployment at 7.5%" need to remember that unemployment had been as high as 11% less than two years earlier. And by the way, the economy had SLOWED to growth of 2.7% at the end of the third quarter of 1984, so you had a bustling economy and fewer unemployed).

Okay, we'll all grant inflation was really bad in 2021 and especially 2022, though it has subsided. I'm no longer paying $19 for the eggs at Wal-Mart or anywhere close to the $5.49 a gallon I was paying in Massachusetts in June 2022. So while they haven't returned quite as low as they were, prices have gone down some in the last two years.


But that leads me to this question:

Do you think the PERCEPTION is that prices are higher than they were because the pandemic ended is what really made it seem worse to people? In other words, I have less "disposable income" than I did in 2020 so it FEELS worse?

I don't know how it worked for whomever, okay? But I do recall a few things being basically passed as temporary measures.

- if your child is no longer in daycare because you are working at home, aren't you saving on actual daycare cost?
- if you're not driving to work or school because you're in the home, doesn't that save on gas....
-....and doesn't that mean when you do buy gas on rarer occasions, it is MUCH cheaper due to supply/demand?
- weren't student loans paused and wouldn't that give people more money in their pockets temporarily?
- wasn't rent paused, which would put A LOT MORE money in your pocket? FTR, I never missed a rent payment.
- weren't SOME car notes suspended at least temporarily, and wouldn't that put money in your pocket as well?


Okay, so now you have a bunch of money you NORMALLY would spend but didn't because of the circumstances and THEN as we go back to normal: a) you now have to pay those bills you didn't have temporarily; b) since everyone now has money and demand has increased, prices go even higher? So now inflation IS bad but SEEMS even worse because you're watching your spending skyrocket and your savings dwindle rapidly.

Am I even remotely thinking about this correctly? Have I missed something?


Side note: remember, we only have our own experiences to go on. In all honesty, MY WORK LIFE didn't really change all that much until the second and third strains hit. I got paid for 40 hours a week, I went into work every single day (except when I caught shingles and then Covid), and I wound up having to finance a car a year early because my Altima died at 229,000 miles - so I put down about 1/2 of it, and it cost a lot more. My son came home and did his university studies online, and I was given back about $3100 for his last semsester room.

 

[TIDE-HSV]

One of our fine posters here may have theorized the same thing (and I didn't see it) and let's make it clear before the post that I know basic economics at best, and I'm nothing close to an expert as my bank account would prove.

The economy was growing in the third quarter of 2024 at 2.8%, slightly above the summer 1992 rate of 2.7%, the year Clinton beat Bush (and Perot) running on the economy. Of course, other numbers are different. While inflation was not so bad in 1992, unemployment was over 7% as opposed to slightly above 4% right now. (Folks wondering, "How did Reagan win a thumping landslide in 1984 with unemployment at 7.5%" need to remember that unemployment had been as high as 11% less than two years earlier. And by the way, the economy had SLOWED to growth of 2.7% at the end of the third quarter of 1984, so you had a bustling economy and fewer unemployed).

Okay, we'll all grant inflation was really bad in 2021 and especially 2022, though it has subsided. I'm no longer paying $19 for the eggs at Wal-Mart or anywhere close to the $5.49 a gallon I was paying in Massachusetts in June 2022. So while they haven't returned quite as low as they were, prices have gone down some in the last two years.


But that leads me to this question:

Do you think the PERCEPTION is that prices are higher than they were because the pandemic ended is what really made it seem worse to people? In other words, I have less "disposable income" than I did in 2020 so it FEELS worse?

I don't know how it worked for whomever, okay? But I do recall a few things being basically passed as temporary measures.

- if your child is no longer in daycare because you are working at home, aren't you saving on actual daycare cost?
- if you're not driving to work or school because you're in the home, doesn't that save on gas....
-....and doesn't that mean when you do buy gas on rarer occasions, it is MUCH cheaper due to supply/demand?
- weren't student loans paused and wouldn't that give people more money in their pockets temporarily?
- wasn't rent paused, which would put A LOT MORE money in your pocket? FTR, I never missed a rent payment.
- weren't SOME car notes suspended at least temporarily, and wouldn't that put money in your pocket as well?


Okay, so now you have a bunch of money you NORMALLY would spend but didn't because of the circumstances and THEN as we go back to normal: a) you now have to pay those bills you didn't have temporarily; b) since everyone now has money and demand has increased, prices go even higher? So now inflation IS bad but SEEMS even worse because you're watching your spending skyrocket and your savings dwindle rapidly.

Am I even remotely thinking about this correctly? Have I missed something?


Side note: remember, we only have our own experiences to go on. In all honesty, MY WORK LIFE didn't really change all that much until the second and third strains hit. I got paid for 40 hours a week, I went into work every single day (except when I caught shingles and then Covid), and I wound up having to finance a car a year early because my Altima died at 229,000 miles - so I put down about 1/2 of it, and it cost a lot more. My son came home and did his university studies online, and I was given back about $3100 for his last semsester room.

No, I think you're very close to sensing the perception of the public. On an objective basis, the Biden administration did a miraculous job of rescuing us from what could be an abyss. My personal economy differs from the general, in the fact that I'm somewhat isolated, both in what I do and, to some extent commodity prices. At first, I was puzzled that Biden wasn't getting any credit at all. Just as the axiom that things are never as bad as they seem nor as good, Biden is/was better than he seemed. There are other aspects of intelligence than thinking on your feet, always his Achille's Heel. He made some very good decisions, far more than Trump has/will/is likely to make. Added to a very primitive view of the economy, there is something subtle at work. The world is viewed by many Americans as in chaos. The generation of us who experienced genuine chaos has almost died out. There's no doubt that there's a reaching out for the strong image - "Only I can fix it." That urge in mankind for the imaginary strong leader is still present in the public, as it has been for multiple millenia...

 

[Tidewater]

Three points.
Inflation is like weight gain. If I weigh 150, and I gain ten pounds this year, and 5 pounds the year after, that does not mean I have improved, I have gotten worse more slowly. To return to 150, I have to actually lose weight. With inflation, it got worse more slowly in 2024, but it did not return to pre-pandemic price level, which would have required deflation, which was not close to happening.
Two, during the pandemic, there was a lot of pent-up demand. Once the restrictions were removed due to the pervasiveness of the vaccinated/recovered, that pent-up demand was going to burst onto the economy regardless of what the federal government did. All the federal government had to do was get out of the way and the economy would recover from the coma the federal government had put it in due to the pandemic. Then the federal government decided to dump trillions of dollars onto an economy set to take off. The predictable (and inevitable) result was inflation: too many dollars chasing too few goods.
Three, the president does not have as much influence on the economy as some folks might think. He traditionally gets too much credit and too much blame. Those arguing that he does "determine" the level of economic activity should be asked to name the policy and explain in a disciplined manner, how that cause brought about this effect.

 

[crimsonaudio]

The fact the consumer credit card debt continues to grow rather rapidly is telling that the 'on the ground' economy isn't as good as the numbers make it sound.