Taken together, the law could help protect the U.S. economy against the rising oil costs and broken supply chains that triggered the most recent bout of high inflation.
Now, it’s a matter of perspective whether you’d call something meant to help prevent inflation “deflationary”. And it might be difficult to prove that it worked years from now, because it’s hard to prove a negative.
Note that you’re asking me to defend an argument that I never made. In fact, I argued that Biden has done little to reduce inflation, and likely can’t. When you said that the IRA isn’t going to have much of an effect on inflation, that’s not really different from anything that I said.
I pushed back on the suggestion that this legislation is making inflation worse. I just don’t trust your judgement or opinion on that. But, as you’re claiming that it’s just your opinion, at the same time I will say you’re entitled to it.
Indeed. If they had “little effect”, the Republicans and their funders wouldn’t be willing to burn the country down to block the IRS from doing its job.
In case it hasn’t been linked to yet, the Federal Reserve publishes an annual Report on the Economic Well-Being of U.S. Households. I believe the survey is in ~October and it takes well into the next year to be published, so the latest we have is from 2022. The survey asks purely qualitative questions, e.g., about feelings of overall financial well-being, as well quantitative questions about income, spending, access to banking, etc.
I’m still digesting what I’ve read, and I haven’t read all of it. There are a lot of individual factors that will matter more or less to different people. But the overall sense of economic well-being did drop in 2022, below the 2017–2021 values (excepting the off-cycle survey in April 2020), but still well above earlier levels. Which highlights to me a question of reference. How well is the economy doing? Compared to what? There isn’t a clearly calibrated scale here. A lot of people could be doing a lot better. I’m, personally, doing great. My family and friends are doing great. And I remember how much things sucked for a lot of people in and after 2007 and 2001. I don’t see data going back that far, but I imagine people feel a hell of a lot better than they did then.
Also, this is a survey about how households are doing, not how they feel the overall economy is doing. And household data are influenced by compositional changes.
Here’s a gift link with two “pathetic nerds” (their words, but right up our alley) discussing this exact topic. It’s Paul Krugman (who is a big Democratic booster, can’t stand Trump, very liberal) and Peter Coy (business editor for Bloomberg, seems kind of balanced? Not sure). It doesn’t pretend to be non-partisan and it’s fairly long. Anyway, here you go:
I think alot of surveys recently have shown that people are mostly saying they themselves are doing OK, but the “overall economy” isn’t so well. Consumer spending has held up well, as have jobs and wages. I would trust what people do over what they say about the overall economy.
And Republicans are going say the economy sucks, no matter what is going on, as long as there’s a Democrat in the White House. Both sides have voters who will show political bias in how they answer these types of questions. But Republicans are typically shown to be more swayed by the bias than Democrats on average.
Biden needs to get out and campaign on the economy, because the numbers will back him up. He will have Democrats on his side and Republicans against him. It’s independents he needs to win over.
Exactly. They are discounting their own lived experience in favour of the bullshit propaganda that is being spewed at them vie the firehose of right wing media.
It really is the damndest thing. Everything I read suggests that people are not behaving in their spending as if they’re worried about their economic condition. And yet…
It’s because people assume that just because they’re doing fine, that doesn’t mean others are, and if they’re told that the economy is bad despite their own experience by someone they trust, they’ll vote out those they think are responsible.
Hence why people who are fine think the economy is bad.
If you’re a D you’re personally empathetic but aren’t drinking the “economy-sucks” RW propaganda while you can see the truth for yourself and for others is otherwise. So you vote D for continued improvement. And for democracy not totalitarianism.
If you’re an R you don’t give a shit about anyone but yourself. You’re receiving and believing the RW propaganda that the economy sux while you’re fine. So you vote R but not out of unhappiness over the actual economy you’re experiencing. Just for the totalitarianism you crave.
Some of it is the cognitive response to higher prices vis-a-vis higher wages.
Everybody looks at higher prices and wonders why things are so darn expensive these days. “Why I remember when twenty bucks worth of groceries could fill my car’s trunk!” So higher prices are a bad thing the world is doing to you.
On the other hand, if you’ve been getting raises lately that keep up with or even surpass inflation, that’s just your hard work and general greatness being justly rewarded. So your raise is something you’ve earned, not something that can be attributable to macroeconomic conditions. “Why, I’d be on easy street if it not for these high prices!”
And these kinds of cognitive biases are nonpartisan - they’ll affect you even if you have a D by your name in the voter rolls.
Plus, people don’t often have a good handle on the earnings of people around them. They’ll see the higher prices and figure that their neighbors around them are suffering, without considering that those same neighbors are also getting raises that are dampening the effect of those prices. People will talk about prices as small talk, but salary isn’t similarly a topic of casual conversation.
Or you’re worried that you’re going to lose all of the comfort you’re experiencing because if the economy is so bad that it will eventually affect you like it is all those people you don’t know.
You don’t have to feel empathy for the people burnt to death to take action when you hear the wildfire is headed your way (even if you don’t see it yet).
