By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street
Without a lot of fanfare, average gasoline prices bottomed at the end of January and have been rising steadily ever since. They’re still a lot lower than they were a year ago, from $0.89 per gallon lower on the West Coast to $1.24 lower in New England, according to the EIA. But the turnaround has been swift.
Numbers vary, depending on who is doing the counting. According to the AAA’s Daily Fuel Gauge Report, the average price for regular hit $2.312 today, up 1.1 cents from yesterday, and up 27.5 cents from a month ago. That’s a jump of 13.5%. But it isn’t evenly spread across the nation: the EIA found that gas prices in New York rose only 5% from the bottom; in Ohio, they soared 24%.
Gasoline prices tend to rise in late winter. But this time, months of plunging gas prices – a function of the collapsing price of oil – created good vibes that are suddenly being deflated.
Gallup developed its Economic Confidence Index in 2008 during the Financial Crisis. Not surprisingly, given what most consumers face, the weekly index has been deeply in the negative throughout its life. Well almost. In 2014, it still ranged from -14 to -21, despite other consumer confidence indices that were soaring. But late in the year, perhaps as the plunge in gasoline prices was doing its magic, it began to rise. And in late December, the index made it all the way into positive territory, for the first time ever – and inched up further in 2015.
Until now. For the week ending February 22, it fell 5 points to -2, the largest drop since July, and once again back in the negative. Gallup explains that the index is “usually fairly stable, not changing more than a couple of points unless there is some significant event.”
The index is composed of two components: “how Americans rate current economic conditions and whether they say the economy is getting better or getting worse.” This year, unlike prior years, the economic outlook index was consistently above the current conditions index, ranging in positive territory between +2 and +6. The current conditions index ranged between -1 and +1. Now both have dropped to -2. Over the past two weeks, the outlook index dropped from +6 to -2, down 8 points.
In the latest week, 27% of Americans said the economy was “excellent” or “good,” while 29% said it was “poor.” Hence the current conditions value of -2. And 47% of Americans said the economy is “getting better” while 49% said it is “getting worse.” Hence the economic outlook value of -2.
And the “significant event” that could have triggered the decline? Gallup explains:
Americans’ lower confidence in the economy last week is most likely a reaction to the rise in gas prices. Even though gas prices remain well below where they were a year ago, the recent increase has been fairly sharp – though perhaps less than the normal late winter increase – and the shift from declining to rising prices may simply be discouraging to consumers.
And so, “if gas prices continue to rise and the weather” – again, the weather – “ends up adversely affecting first quarter economic growth, economic confidence could struggle to get back into positive territory.”
And then that would be it for American consumers? After years of post-financial-crisis struggles, finally some light at the end of the tunnel and a few weeks of positive economic outlook in early 2015, caused by plunging gas prices, according to Gallup, before it all starts to crumble again.
The Gallup survey provides a much darker contrast to the Conference Board’s Consumer Confidence Index. It has been showing that consumers had regained their pre-crisis euphoric levels, as January’s confidence index hit the phenomenal level of 103.8, something last seen in 2007. But in February, consumers toned down their presumed euphoria. And the index, released today, dropped 7.4 points to 96.4. The report didn’t mention rising gasoline prices. So there may be other factors at work that dented this Conference-Board defined consumer euphoria.
Peaking economic confidence – at whatever miserably low or euphorically high level these disparate surveys place it – would indeed be a crummy development, just when consumers were expected to borrow even more and spend even more to propel the economy once again to its ever elusive “escape velocity.”
There are already unpleasant rumblings. In Texas, one of the growth engines of the US economy in recent years, manufacturers saw new orders and shipments plunge to the “lowest reading since June 2009,” according to the Dallas Fed. And executives are getting worried. Read… Oil Bust Mauls Texas Manufacturers, Atlanta Fed Sees Hit to US Economy
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Would be nice to also see an ’employee confidence’ index. Shouldn’t be too different from the consumer confidence index but the name ’employee confidence’ might indicate what the problem is. And that problem isn’t solved by easy credit to,for and by banks.
It’s almost time to raise interest rates…
Why do you hate our freedom?!?
I have studied demographics for 28 years, and first warning I had of the housing debacle of 2007 was in 1987. The research I did back in 1987 uncovered the fact that housing would be take a serious hit from the first wave of boomers starting to retire in 2006. The boomers who were starting to retire would cut their spending as they would have passed their peak earning years. I started focusing in on housing again in early 2002 and began to build a massive database to watch the housing market as MERS, and corrupt titles began to surface. I watched it unfold in real time as the propaganda by the real estate pimps pumped up the volume to shout out anyone who cast a shadow of a doubt on ever increasing home values.
Fast froward to 2010 when built a massive economic and demographic database that looked at 400 aspects of the American economy, only to shut it down in 2012 because it pointed in only one direction, collapse. The parasitic nature of this economy is only hidden by the Federal Reserve’s pumping of money to the top 1%, and a hideous amount of propaganda on every form of consumer infotainment. The American public has absolutely no clue about how fragile the economy really is, denial is king in the land of the Koch brothers.
I have multiple sources that download to me on a regular basis just how fragile, and harried families are that send their children to the best schools in the state. The lack of focus, follow thru, consistency, and preparation on the part of parents is something that conservatives can never acknowledge because they can not criticize the voting publics stupidity. The horror stories of teachers in average schools would be enough to wake the dead, if only the public was not completely blinded by the growing power of dark, and dirty money.
One final note, the consumer sentiment charts were bought out by more connected entities about 6 or seven years ago and have connection to reality. I am constantly amazed how conservatives and liberals are bamboozled by graphs that are created by special interest groups to propagandize the public. You can never accept anything at face value, it takes work to find any semblance of the truth, and in the end no one will believe you.
Thank you for your post. It is indeed frustrating to have any sense of what is going on, because you know it’s bad and yet you feel powerless to do anything about it. When I was a kid I read Asimov’s original Foundation trilogy and never forgot one section in which he describes how those who knew nothing were very optimistic, those who knew a little were worried, and those who knew the most were not optimistic at all. I’ve noticed from 13 to 50 that his pattern holds true in most instances.
Jack, I agree with all you have said, but this is the first time I have seen someone draw a parallel between dark, dirty money and what is happening in our schools, both private and public. Could you explain your thinking in more detail?
Yes, I agree as well but would appreciate more insight on the parallel between dirty money & the decline in our educational system. I can believe a parallel exists, but… would like more insight.
I don’t know precisely how Jack would respond, but I can speak to my own experience in public schools at the secondary and post-secondary level. It is death by a thousand cuts, mostly budget cuts, but also the way in which an entire ideological infrastructure has wormed its way into education over the past few decades. The most recent insurgent would be standardized testing, which is pushed by an industry that has existed for some time, developing tests for college entrance and for a more limited testing framework in a few states, but has ballooned exponentially in recent years with both No Child Left Behind and Race to the Top. In addition to transforming curricula–there is intense pressure to teach to tests–it has also instituted a competitive ethos that is entirely counterproductive. Ideally, schools should receive maximum investment to lift everyone up. In practice, schools within and between districts are made to compete for an ever increasingly limited pool of funds in accordance with their performance on said tests. Then there are the charter schools. All this “competition” is being driven by corporate interests, 1) who want to extract money from the public sector and 2) who seem to want gleefully to institute a set of values within the public school system itself that are far from democratic and certain not communitarian. Case in point, Michelle Rhee, who, after being caught red-handed manipulating her own testing regime in D.C., went on to become a well-paid shill for the usual suspects (Koch et al.) who want nothing more than to dismantle the one egalitarian institution we have left and turn it into a factory for mindless worker bees (I apologize for the metaphor–bees are lovely creatures).
At the collegiate level, so much money has been shifted toward administration, and so little money comes from the state, that while the admins chase after every last private sector dollar they can get their hands on, the people who have to do the actual teaching and staffing languish. The reason for this is wealthy donors don’t want to fund x number tenure tracks lines or career counselors, but want their name on a thing, preferably a building. The impulse among admins, then, is to build more attractive junk to appeal to the vanity of alumni than to invest in real educational services and the wide variety of PEOPLE needed to perform them. This leads to the perverse fantasia one encounters like when I was at Michigan, where there always seems to be enough money for massive life science/biomedical research buildings but no money to hire the very researchers who would fill it. If you can’t even get admins to put money toward STEM professors, imagine how pie-in-the-sky it is to suggest you hire more English or History or Music faculty.
False history. The Prussian educational model, on which the US settled quite early in its drive for mandatory schooling, is explicitly designed to instill the values of hive-creatures into, and thus reproduce, a subordinate, compliant, exploitable working class.
The entirety of Western culture is dedicated to reproducing inequity, and the wistful blather on the part of the management class is an essential component of that end. The system simply doesn’t allow for any other steady state.
Pretty much. If egalitarian and democratic schooling was wanted it seems it would have to go back to Free Schools and other 60s movements which attempted student governance etc.. They might not have worked, especially as schools these days are asked to deal with social problems, but at least they wouldn’t have argued there wasn’t inherent authoritarianism in the existing system.
But I can certainly accept existing trends are getting worse, that’s always easy to believe. Just if the past was such an eden, when exactly do we mean? In ANY of our lifetimes? I mean if schools were really egalitarian and communitarian would they really have the bullying problem they’ve had for at least a few decades etc.? And besides those economically well off don’t send their kids to public schools anyway.
The only egalitarian institutions we have left are probably libraries.
I also think the excess administration problem exists even in states that aren’t primarily funded by rich donors, the administrative salaries in the university of California system are legendary.
Maybe so but residential segregation plays a huge part. Here in Wisco, both the reds in Waukesha and the blues here in Madison are mostly happy with their public schools – the excessive testing generates an eyeroll sometimes but us middle class-ites would strongly dispute the view that our kids are being taught to be automotons. The fact is the districts with the good students still attract really high quality teachers (yes, our education schools still turn out a fair number of really good and inspired ones). It’s in the big cities, the non-college cities and especially the rural areas where the really pernicious consequences of defunding and bureaucratic schooling show up.
You and “Uahsensaa” are both correct. That said, there is more, and there is no room in these response boxes on this great blog to detail all that has gone wrong with education.
Very good cognitive research shows that our testing regimes – and teach to the test – are all wrong, but we do it anyway. Education has become a commodity – and thus, commodified. Like any commodity, the producers begin to see a race to the bottom (compensation, quality, etc.) while those who run the system and promote the system and game the system get most of the benefits.
As one example, look at the administrative bloat in K12 and post-secondary education. It’s unreal. Look at California, with 1000 school districts. Every one of those districts has a District Superintendent who is well into six figures (more than $200K + benefits like underwritten mortgages, a car, etc. are not unusual). When was the last time anyone heard of any one of those districts working with any number of other districts to create inter-district efficiencies that would save money? Why does every district have its own HR department? Payroll department? etc.
In addition to local districts, CA has County Districts that manage the local districts.
Look at California’s post-secondary system – USC, UC, and CCC. These instutinos are under constant money pressure. Their respective administrator’s answers to financial constraint is to raise tuition, or cut out programs, etc. etc. Why don’t these three institutions merge, to create one post-secondary education administrative group? Most people reading this blog (and elsewhere) know the answer to that – i.e. “efficiencies” mean less administrative turf.
Heck, 70% of all new post-secondary hires are adjuncts who have no health care (until ACA), no vacation time, no nothing.
I could go on, but I don’t have time. Education, like so many other social goods have been made into political footballs. It’s a sad thing to see. I have hope for renewal in America, but the more I look into these matters, the more I think we’re looking at social experimentation as the answer – i.e. may a thousand sustainable ideas bloom, as adaptations and creative alternatives to the decay of once proud American social institutions.
The problem is not money. The problem is the lack of a common culture, lack of parent support, lack of student respect for teachers, and the absence of a widespread view that education is important for its own sake (and not just to make citizens more economically productive).
The problem in some places is money, but overall money is a problem because this is America and if the teachers don’t make good money they are not respected. We have no historical means of distinguishing people (no ceremonies, no titles, no special forms of address built into the language like in Romance languages). We have money. That’s the signifier for status and importance. Not a great thing, in my opinion, but there you have it. Don’t pay the teachers well above average wages and the parents and students won’t respect them.
Dear Trinity River, in Arizona the voters approved an increase in funding to the state funded public schools back around 2003, in the severe recession that followed the republican administration in Arizona reduced funding by the most of any state in the union. A ruling last spring by a state judge ordered the legislature and incoming administration of Doug Ducey to increase K-12 funding by $360 million a year, and to pay a undecided percentage of withheld funding from previous years to be tacked on top of the $360 million.
Doug Ducey has only increase funding by around $13 million, and slashed $75 to $90 million from state universities for the next state budget. He has totally ignored the judges order, and has surrounded himself with charter school owners who are aligned with his Koch Brothers funded goal of decimating the funding and support for state public schools, which have elected school boards unlike charter schools. In his fight to ram thru his fiscal cuts to K-12 and the state university system he is being aided by charter school owners, and dark money advocates with extremely deep pockets. These dark money sources are robocalling voters in the Mesa school district and outright lying about the percentage of funding that goes in the classrooms, and Doug Ducey approves of their fascistic propaganda. Administrators that tell the truth in this state will be flogged in the public square, and be forced to quickly learn that if you tell a lie often enough the public will believe it.
Doug Ducey was vetted by the Koch Brothers over a year ago, and he has been supported from day one by dark money that is being utilized to destroy public education at the elementary, middle school, high school, community college, and State University level. The Koch Brothers and their sycophantic followers love parasitic economies where the general public is squeezed on their utility bills, rent, cable & internet bills, insurance, and food until the host is completely drained of the will and intelligence to fight back.
The level of propaganda on the local media here in Arizona is so thick and pervasive that it is almost impossible to avoid it, and during the election season it was like living in fascist Germany, circa 1936.
The average and even highly motivated parent in this state is almost at a loss to find out anything close to the truth about the blitzkrieg that charter school owners have been waging on public schools in this state for over 18 years. Parents as a whole are stretched far beyond their ability to function in a reasonable capacity as parents for their children, and maintain a viable job that comes close to paying the bills. In this state it is like watching a juggler increase the objects he is handling until the point where everything crashes to earth.
Jack, my state has had a similar trajectory. More charter schools funded with public school monies have resulted in lower teacher salaries and more autocratic governance. Pearson, the testing company, gives out-of-work college grads 90 seconds to grade two page essay questions. Teach to the test has encouraged cheating. Principals have encouraged the cheating for self preservation and bonuses. It’s less expensive to give a $10,000-30,000 bonus to a principal than to raise teachers’ salaries. The state, after being chided for ignoring cheating, found they & their consultants were incompetent at rooting out the fraud, so they finally stopped trying after a new round of state budget cuts. After all, what state or school systems wants the publicity that Atlanta got?
Teachers are constantly kept off balance as to what to do since each year there is a new emphasis on what is important. All of this is a vicious cycle that results in stressed students, stressed teachers and stressed parents.
Lies, lies, and more lies all the while more and more funding cuts imposed. G Bush’s first Secretary of Education came out of a school that graduated only 50% of the students entering his high school. Has this led to “no child left behind?” or all children left behind?
Deming has fourteen points for improving quality. One of them is ‘drive out fear.’ You can’t build a quality product or student if everyone is afraid of getting fired. Understanding what a system is and is not is central to improving quality. Setting goals that are not reflective of the system’s true potential encourages cheating. In my opinion, Six Sigma, which is supposed to be the next step after Deming, misunderstands Deming. Deming is fundamentally against goal setting. If you don’t understand that, you don’t get his point.
Every year teachers experience an increase in the speed of what I call the “Hamster Wheel of Death”, teachers hold on to the wheel until one day they lose their grip due to exhaustion, and fly off into the ether that hovers above the sawdust below. The burnout rate of teachers is something to behold, and only those who love them can know the toll this process takes on them. The attrition rate is frightening.
Glad to hear what you’ve researched. This matches with all my research (which I did for personal reasons and did not publish): the vast majority of evidence points towards collapse.
Let me tell you, just so you know, what the countervailing forces are:
(1) the explosive growth in the solar power industry. This is a new force. It’s a real industry. It’s booming. It’s employing lots of people. And it’s destroying a large number of the existing parasitic industries (utility companies, coal, gas, oil).
(2) enlightened self-interests in the corporate execs of the tech companies. Many of them recognize that their wealth depends on having a functioning ecology and a functioning civil society and a functioning government — that the totalitarian, arbitrary, polluted dystopia being backed by the bank and oil CEOs leaves them with nothing.
These are the economic powerbases which can harness public discontent in order to break the pro-collapse caucus. We may yet get our FDR, or better, our Clement Attlee.
Solar power industry is so SMALL compared to the oil industry that it will have no affect on the economy. It’s also one of those industries reliant on government spending, which has been decreasing.
Also, solar power technology, though getting steadily better, has major problems in power distribution and will not be likely to take over any part of the energy sector for at least another few decades.
As for the enlightened execs, there is one thing to be enlightened and another to enact change. The top execs are desperate to get their hands on as much wealth as possible BEFORE THE SYSTEM FAILS. It’s biologically akin to rats fleeing a burning building, and we are, after all, animals. History has also shown that society doesn’t really get better until catastrophic events shake the foundations of the majorities reality. It will take more than milk going to $4 a gallon and working temp jobs to shake the altogether indoctrinated American public to demand change in a way that brooks no argument.
I wish I could be optimistic, but my parents have seen firsthand how long and tragic revolutions are. I really don’t think an enlightened exec making $300k + a year is going to bother or even have the power to enact change in a system bogged with bureaucracy and mired in totalitarianism/corporatism.
I think Hawaii is the only state where oil is used to produce electricity.
Ok thanks for the non sequitur…
What does the “energy sector” have to do with an end user generating electricity for internal use? You should acknowledge your bias toward centralization more explicitly.
To my eyes, it’s not dollars they care about — once the music stops, they’re as good as bath paper. What they, or at least the far-sighted ones among them, care about is accumulating exclusive *claims* on excludable real resources, which are in a sense more concrete and more defensible than claims on tokens. In short, they’re arranging to preserve the crypto-parasitic role to which they’ve become accustomed.
The most deeply entrenched biases are not even self-known to the afflicted biasee. Unless one has read extensively about onsite electrogeneration for onsite electroconsumption, how could one think of anything else except generating into the grid?
Renewable energy engineer/bussinessman Steve Baer wrote an article about this problem, and why the centralized energy-supply companies foster this kind of thinking-failure on purpose. That article is called The Clothesline Paradox. But since I can’t find it anywhere on line in the time allotted just now, I will offer two other little Steve Baer articles which touch on elements of this same perceptual problem.
http://www.redrok.com/sameshin.htm
good stuff that link.
I doubt your parents have seen anything, much less long revolutions. Long is for evolution, overnight, like 7 days that shook the world, is the very definition of revolution. Like Haiti, one day enslaved, next day lots of dead white people. Solar is already past the all but buried dead coal biz, but you already knew that. It is overtaking the decrepit nukes, that will shut down one by one just like coal mines. Over 30 years ago, wood stoves produced more energy than nukes, but that is something you also know.
I wouldn’t count much on so-called “enlightened self-interest” of billionaire tech execs. Yeah, maybe some of them will look into & invest in newer technologies of various sorts, but their enlightenment only ends where their bank account begins. They are no more “enlightened” than the Koch brothers, and they are every bit as divorced from the reality of the average rube as any other outrageously rich exec is, like those on Wall St, in the banks, the Kochs, etc.
They’re in it for how much money they can siphon off to themselves while playing the usual tax avoidance, etc, games. Not much interested in how society or this country fairs, much less giving a crap about the proles.
Yes, the fundamental difference between investing and doing are lost to almost everyone today. In World War II we didn’t invest in tanks, planes, and the A-bomb, we made them. It was not a question of “a nice idea” or “may turn out to be lucrative one day.” It was “get it done, now, no questions asked.” If we are to alleviate the worst effects of climate change, we have to do things, not invest in things. We need people with the guts and the mandate to get shit done, as in, every American home that wants solar panels gets solar panels, or every community that wants to be hooked into a nation rail system gets hooked into the national rail system. At some point we started imagining that start-up money with possible big-time returns to private investors was the same as making things and getting things done. If we don’t wake up fast, there won’t be an opportunity left to do anything but triage.
“The American public has absolutely no clue about how fragile the economy really is, denial is king in the land of the Koch brothers.”
of course that could be rationality. If things are going to end badly and there’s very little you can do about it, living for today is rationality period. Yes, have an emergency fund (but unless your pulling in at least top 20% income, it won’t last you through a LONG emergency). So give the finger, or better the pitchfork, to those who will blame you for your eventual impoverishment. Almost nooone can survive indefinitely without JOBS unless they’ve gone 100% survivalist or unless there was a .B.IG.. Yes, be ethical, protest when you can, but mostly you didn’t build that (that being the social system you live under).
@Jack: Thanks for sharing your info. I too have been a demographic/psychographic researcher over the past 30 years (for marketing) and have arrived at about the same conclusion you have. We’ve arrived at a point with so much obfuscation and lying that I doubt anyone actually has a grasp on what’s really going on. From what I’m seeing it’s not good.
Intresting,
Then perhaps you can answer a question I have been looking into and been unable to answer. Why Kansas was spared the housing bubble and subsequent crash. There are no regulatory elements I know of that prevented the boom cycle. All the banks that can be found in the hot spots, can also be found here in Kansas. Regional boundaries is not much of an explanation either as Oklahoma was hit hard as well.
The only explanation I have is “fly over”. Kansas just wasn’t sexy enough for the market to flock too. But I am not sure how one would go around proving that. All though I have been told that once other markets start heating up, they attract any speculative money to then, drawing it away from reasonably healthy markets and preventing them from inflating.
Hi-
I’ve attached a paper that I think answers your question from Case and Shiller from 2004. They found asset bubble like movements in “hot” housing markets and none in the sleepy housing market of Milwaukee as the control city. You can find specifically in their second table that Kansas has relatively low volatility in homes prices to income over 1985-2002 compared to other states. So while there may even have been the fraudulent mortgage practices in Kansas, the fact that housing prices were not completely overvalued means it was easier for people to stay in their homes and refinance during the crisis, dampening the impact. Definitely read the paper for more detail.
http://www.econ.yale.edu/~shiller/pubs/p1089.pdf
Actually its fairly simple in Kansas there are no natural or artifical barriers to expanding the area devote to housing. If you look in Ca its both natural barriers, (water, mountains etc), nature reserves and federal land, Phoenix is mostly federal land limits as was Las Vegas. In the east its natural barriers. (water etc). the same is true for Tx which again most cities don’t have significant barriers to growth.
Outside of boom markets which are inherently unstable, I have not understood why there was any consumer confidence. People don’t have work. When they do it is often part time and low paying. So many people are working several jobs simply to survive. Groceries are extremely expensive and the price of them keeps rising.
I have assumed that consumer confidence had the same reliability as unemployment numbers. Really, the US population is in a desperate state. There are some people for whom things are working out very well. I notice that people who rely on investment income feel better and spend more, but I have also seen the ability to spend go down some in the past two months or so.
I think we will see another crash. This system is being propped up because of the elections but I don’t know how long this can keep going. Money is being stripped out of the system and given to the few. This isn’t a real system where people can make living wages. People have to pay more for things that we can’t do without-food, medical care and housing (for example). The ability of people to pay for necessities is under severe strain and I see no help in sight.
cabin fever
the coldest recent winter was 1976-1977
inflation in 77 was 7 percent and then 9.25 in 1978
gasoline effects the lower end of the economic spectrum, which has a buzz buzz effect on the rest of the economy…humans are not rational…inflation is not based on the spending habits of people who care about inflation…spending by most people who think about inflation does not match up with the average “consumers” idea of daily life…for about 25 to 35% of the population, that extra 10 to 20 bux per week is the cost of that minor treat they want to give themselves to help ameliorate what they might perceive as a not so great existence right now…
although it is probably smart to not really believe much in respect to “data”…
most real estate data is still done by “survey” when we have massive amounts of data available from county recorders offices (and no one dares ask utility companies about their level of service in respect to active vs inactive meter installations)…
and at least in politics (dated someone for a while who was paid well since she was a “star” phone survey taker), the same set of questions will be asked to a regularly contained set of individuals till “one” group of 575 consumers answers the survey in the way the paying party wants to be able to project…and the other 12 groups of 575 consumers who did not quite “pass the conclusion needed test” were discarded and never talked about…
all will be well in the garden…
Sorry, but that extra $20 a month from lower gasoline means zippo when I am facing a $100 phone/internet bill, $75 for satellite TV, $400 for electricity, $500 for heating, $275 for a car loan, etc.–all thanks to deregulation, the removal of caps, and the non-enforcement of monopoly laws. Like most of Americans, my income will not cover these expenses. My clothing and shoes come from thrift shops and I only buy food on sale. I did splurge $7 on a Chinese buffet this week, but that’s hardly likely to rescue the economy from the toilet. If someone would start the revolution, I would gladly join in.
It’s pretty easy to understand really. People I talk to who have money and/or jobs think things are peachy. Those outside that lucky group are desperate. That’s all the data is reflecting.
Most of my friends are Democrats who voted Obama. They think the economy is roaring and better than ever. They don’t want to hear anything bad about anything. Obama is for peace never mind he’s bombed 7 nations and escalating on several fronts, it’s Russia’s fault. Triumphalism about the awesome success of Obama’s economic recovery is pervasive on FB among these people. All is well, better than ever. “Occupy Democrats” and NPR is cutting edge cool for these folks.
Sadly have a very similar experience. My friends and I are boomers, who are doing “ok” and mostly have been reasonably frugal throughout the boom years, so managed to put some $$$ aside, etc. This is all good, but my friends insistent allegiance to Obama (esp Obama) uber alles is matched only my conservative dittoheaded friends & family’s authoritarian allegiance to all things Republican.
While the 2 sides of the same coin will give passing lip service to the crooks in Congress, they still cling and grasp to their “Team” and how very very fabulous their “Team” is, and most esp evident amongst a legion of Obamabots who STILL are willing to say it’s “all the Republicans fault,” or “Obama never had a chance,” or my personal favorite “Obama is good guy who’s just naïve” (why would I want to “believe in” someone who’s “naïve”).
Propaganda works, sadly. All brainwashed. All desperately clinging to the notion that somehow our system “still works” against all evidence that it’s not. Attempting to talk to either side about reality immediately results in pursed lips and a big fat shut down & stop listening.
I think the job market has improved a bit (from the 12% + unemployment here at peak, well yes, and some people are able to find better jobs). But OTOH how can they not see all the homeless people everywhere? Maybe a bit down from peak maybe 6 months ago too but …
I guess it’s not even worth discussing Peak Oil or Peak Natural Gas anymore, let’s just talk about Peak Homelessness, the new normal.
Peak homelessness, indeed. From where I sit, I don’t see any decline in homelessness, and what I read in the nooz is that more are having issues. Some are doing better, but those at the bottom are probably doing worse than ever, sadly.
However, most citizens are very good at not seeing the homeless, and if the do see them, blaming them for their status. It’s the American way, doncha know.
There are intersections in Charlotte that I avoid because I don’t want to be hit up by homeless people. Watching a homeless person the other day, however, I realized he had to be making far more money than he would have made working, even if the motorists were handing him ones rather than fives or tens.
If you listen to NPR, you’d think we were in 2006.
Pretty much, even though I have a number of friends, acquaintances and family members who are all working well into their 70s, mostly due to a variety of financial constraints (ie, one spouse got laid off work years ago, so the other spouse – sometimes working 2 jobs – has to work to 72 or 75 to make sure they have enough for retirement, etc). This is happening to R & D voters. With a few exceptions, many I know are having to tighten belts, even if they have pretty good jobs with good salary & benefits. Everything has gotten more expensive, and who knows what kind of money you might get when you sell your house (the former “fail safe” option).
Most consumers I know are living life more frugally and watching how they spend their pennies, including being willing to take public transport at least some of the time if will save on gas, etc.
Some are in complete denial about the state of our economy, but even those who are doing somewhat better than the rest are at least aware, on some levels, that they need to be more thrifty.
“it takes work to find any semblance of the truth, and in the end no one will believe you.”
My experience also.
A pleasure, reading your thoughts.
–Gaianne
I watch CNBC at lunch for entertainment purposes. My wife asks, “Why do you watch that stuff?” I reply, “Know your enemy.”
Our enemy, in this case, is the delusional Mr. Market, who makes nothing and speculates on everything.
We have raised two adult sons who know how to use machines to make things, they know how to repair engines, weld, operate metal lathes, and fabricate stuff. They can also carry an intellectual/philosophical conversation coherently and are socially well adjusted.
People are stressed out and bewildered. They feel helpless and are indebted to the max. Gas dropping in price is not going to fix this problem, hence the lack of “consumer confidence.”
The deeper problems of our financial culture will not be resolved easily.
Let me give another reason the constant apocalyptic talk of the news media without coverage of things that improved for example recall the high level of coverage about Ebola 6 months ago, now that it is coming under control, there is little mention. It is the idea that blood and guts sells eyes to advertisers.
Now if you keep hearing that the end of the world as you know it is nigh you might think differently about the world. But I would posit that the possiblity of an apocalyptic event is less than the 1980s and earlier when full scale nuclear war was a real possibility .
It is the idea that blood and guts sells eyes to advertisers.
Big media pimps for war and has endless feelgood stories about returning “veterans”. It’s about one thing. Money. Money Money.
It is absolutely absurd to base an economy (almost) solely on housing purchases (via debt) and on mere consumption (based on debt). People are supposed to consume at an ever-growing rate to keep the economy going but NOT using actual income as a pay source, but credit (debt). The Fed and economists moan and groan that people aren’t saving and then moan and groan if people aren’t consuming via debt! You cant have both. It’s all part of the probllem of falling wages (cheered by economists as an increase in “productivity” because slaves are doing the same (or more) work for less)…but then are required/exepected to buy shit to feed the economy, buy homes, ad infinitum. House of cards.
I don’t have a cite, but I read several months ago that something like 80% of new employment is paying $7-$13 per hour. There are many Americans who can remember boom and bust cycles that our country was always able to find its way out of. These cyclical recovers (after busts, or recessions) could be counted on – after all America was still being “caught up to” by the rest of the developed/developing world. The latter group of nations have been at a material and capital disadvantage since WWII, but that advantage is gone.
Now, we’re discovering more and more what it’s like to play on a more level playing field – made more “level” by corporate interests (and those that corporations pay off, in multifarious ways) who have been gunning to reduce any “cost of doing business” that they can, starting with labor.
American consumers are beginning to get what’s happening, especially the ones that remember how easily – after a few years of tough times during past busts – we recovered. This time it’s not happening. Add to that structural changes in the labor markets; the downsizing of upward mobility; the loss of hegemony, etc. and we start to get a downward movement in consumer confidence.
Government is running out of ways to spin the numbers. Corporations are busy keeping people at each others throats, helping to stimulate the blame game (this includes much of the media, another corporate group.
I don’t see conspiracy. Rather, what I see is passive complacency and slowly rising anger/hopelessness. Maybe this is why Homeland Security/Obama are so anxious to give certain groups of illegal (mostly longer-term Latinos) and legal (H1Bs and their spouses) immigrants a break – after all, they’re new blood, ready and willing to work for less in a race-to-the-bottom labor market, in a country (America) that is still far better than from they came, in terms of material wealth and opportunity. It’s all relative.
Hang on! It’s going to be a rough ride for anyone who can’t adapt to these structural changes. I don’t like most of what I see, one bit, but I don’t see us coming back to the old days of sustainable wages and “feel good about America” anytime soon – not unless one if a 5%-er.
I doubt that the market research is so concerned about existential issues—whether there will be any economy to speak of in a few years.
They are just wondering why nobody is out throwing money around.
Off the top of my head: heating bills, leaking roofs, and the incredible Obamacare tax snafu. It’s too cold to go out, even for shopping. It’s 9AM, and just got above ZERO. I’m not the only one…a neighbor remarked how she doesn’t go anywhere, but her home projects are coming along nicely….
After 2 solid months of this unnatural season, the season of OMG, and more to follow (there are no bets as to when it will get up to freezing in Michigan and stay there….last year it took until late June), I am not surprised that people aren’t shopping. Jacking gas prices up 75 cents from their recent bottom on the spurious notion that a California refinery blew up and limited local supplies doesn’t impress us, either.