Wall Street Journal Mystified By Public’s Sour Mood Despite “Booming” Economy

It takes a peculiar sort of blindness to be unable to understand that having more stuff doesn’t make people happy, or at least not for very long. Studies have repeatedly found that once a basic standard of living has been attained, along with a safety buffer, more does not result in more contentment.

Of course a wee problem in America is that large swathes of the population aren’t even at that level. Nearly 12% of Americans were unable to afford a nutritious diet. Nearly half can’t pay for a $400 emergency expense (which is nothing in terms of what can go wrong with a car…but no wheels often means no work).

And even those who are over that level aren’t necessarily very secure. They might be juggling jobs or otherwise subject to changing schedules. Bringing up children is costly and stressful.

Covid has added a new level of underlying pressure. For parents, having their kids go to class might seem unduly risky for the child (and them) but they might find it too daunting to try to manage distance learning (even if that were still on) or home schooling. If they are front-line workers, they could well be expected to pick up the slack for thinned ranks for no/not enough extra pay…and could also be exposed to more-abusive-than-ever customers. If they are managers or business owners, shortages and other supply chain woes are a new source of hassle and business risk.

And that’s before getting to the elephant in the room, Covid contagion, and for those who recognize it, the danger of suffering lasting damage even with a mere mild or asymptomatic case.

Even though the Wall Street Journal focuses on the money part of the equation, it recognized that This Time Thing Are Different, and not in the usual presumed-positive way. From Why This Economic Boom Can’t Lift America’s Spirits:

Americans normally are happiest when the economy is growing rapidly….

But the record job growth followed record job losses in 2020, due to the Covid-19 pandemic and lockdowns. Inflation at 7.5% is eating up those wage gains for many Americans. And the unsettling effects of the pandemic, such as product shortages, are still playing out.

That explains why consumers say they feel as bad as they did in the financial-crisis year of 2009, a recent Gallup poll showed. For the first time, Americans who say they are “not too happy” outnumber those who say they’re “very happy,” according to a survey from the nonprofit group NORC at the University of Chicago.

Unlike the country’s last big inflation bout in the 1970s and early 1980s, when price pressure built over a decade, this time a cost-of-living runup unfolded in months…

The latest phase of the pandemic has further eroded faith in leaders and institutions, leading to feelings of frustration, aimlessness and helplessness, polling shows, even among some who are doing well in today’s economy…

“You listen to these Fed guys—Powell right now. ‘Oh, we think we’ll get inflation under control this year.’ Fine, but do you really think these food companies are going to lower prices once the supply chain gets settled?” [retiree] Mr.[Paul] Remick asked. “Do you think eggs are going to go down? These prices are here to stay.”…

While today’s inflation hasn’t hit double digits, as it did in 1974-75 and in 1979-81, with a peak of 14.6%, it is in some other respects more corrosive. It is accompanied—and, in part, caused—by shortages of goods such as computers, cars, and even soup and cereal. A July Gallup poll found that seven in 10 Americans had been unable to get a product or had faced delays in getting one.

Remember that in the past, strong economies meant labor bargaining power. If nothing else, many could quit and find similar work quickly. But now, in entire swathes of occupations, that isn’t necessarily so. Nurses on reddit describe terrible working conditions and meager pay increases, while the higher ups see fit to give themselves much bigger percentage pay rises. Teachers are also resigning to go into other fields entirely.

On the shortages front, the Journal points out that that is happening a lot in food, and is more frustrating that it ought to be because consumers become attached to particular brands and products (that is the point of differentiation!). The gaps might have a secondary “pantry is bare” downer effect. During 9/11 (recall I was in Manhattan and the city was cordoned off for four days) I found it weirdly comforting to walk into a grocery store and see everything look tidy and normal.

Another source of unhappiness is the increase in inequality, which of course the Journal did not acknowledge. As we pointed out in a 2007 post:

In fact, income inequality not only makes people unhappy but actually reduces their life expectancy, and not for the reasons you would think. The Financial Times’ Michael Prowse explains:

There are good reasons to believe that policies that promote greater economic inequality – such as budgets that slash top tax rates – cause higher rates of sickness and mortality….

In Britain, these new arguments are most closely associated with Richard Wilkinson, a professor at Nottingham University’s medical school. Wilkinson has spent much of the past two decades painstakingly assembling the evidence for a link between inequality and sickness. But researchers elsewhere, such as Ichiro Kawachi and Bruce Kennedy of the School of Public Health at Harvard University, have independently confirmed many of his claims.

Those who would deny a link between health and inequality must first grapple with the following paradox. There is a strong relationship between income and health within countries. In any nation you will find that people on high incomes tend to live longer and have fewer chronic illnesses than people on low incomes.

Yet, if you look for differences between countries, the relationship between income and health largely disintegrates. Rich Americans, for instance, are healthier on average than poor Americans, as measured by life expectancy. But, although the US is a much richer country than, say, Greece, Americans on average have a lower life expectancy than Greeks. More income, it seems, gives you a health advantage with respect to your fellow citizens, but not with respect to people living in other countries….

Once a floor standard of living is attained, people tend to be healthier when three conditions hold: they are valued and respected by others; they feel ‘in control’ in their work and home lives; and they enjoy a dense network of social contacts.

Economically unequal societies tend to do poorly in all three respects: they tend to be characterised by big status differences, by big differences in people’s sense of control and by low levels of civic participation….

Unequal societies, in other words, will remain unhealthy societies – and also unhappy societies – no matter how wealthy they become.

The Journal also reports that Americans have gotten the message that Covid is here to stay….and don’t seem cheered by that:

About three in four adults are “frustrated” and “tired” of the pandemic and believe most people will get Covid-19, according to a January poll from the Kaiser Family Foundation. More than half of adults, 56%, said they were more worried about the economy now than they had been during prior surges.

Many of the comments at the Journal were of the “It’s the inflation, stupid, what about falling real wages/real savings don’t you understand?” sort. A few were heartfelt:

willam henning
When you get a raise of $200 a month and taxes, rent, rising grocery costs, and rising costs of everything else eats that up plus some it just makes you feel hopeless. Just when you thought you were getting ahead you find out you’re just treading water. It’s like your pocket got picked.

The article also largely misses the fact that most people feel less and less in control of their lives, and Covid whipsaws only made that worse. Having to schedule what your kids do. Having your company monitor you and/or have you on call pretty much all the time. Facing the tax on time of unwanted unfun shopping, like being told you should look for new Obamacare or Medicare policies every year. Having to fight with your HMO/PPO/hospital to get treatments and meds covered.

And if the affluent-leaning Journal readers are in a sour mood, imagine how the rest of America is faring.

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  1. Louis Fyne

    at the local grocery store, the pay listed on the sandwich board for entry-level jobs rose from $11.50 pre-Covid to $16+ now.

    Sounds great until you factor in that housing/rents have gone up even faster, assuming that one can even find an entry-level rental unit as my neck of the woods doesn’t have the rental supply or rental turnover that is common among neighborhoods where under-35-professionals live (say like a junior staffer at the WSJ).

    (gasoline, used cars, car repair, car parts, too)

    When the two most essential items, roof and transport, are more expensive in real terms, people notice.

    There will be lots of angry disillusioned 2020 Dem. voters, if they show up at all. And the DNC thought 2010 was bad when “Hope and Change” evaporated.

    1. NotTimothyGeithner

      Even then, I’ve noticed those signs have dropped starting pay.

      But isn’t the short answer wealth inequality? It might look great on paper, but people paying higher transportation taxes to car companies doesn’t mean people feel great about the economy.

      Don’t forget healthcare costs.

    2. Yves Smith Post author

      Cars are nuts. Two of our aides had to buy used cars in the Covid era and the prices were terrible. They could only afford cars with somewhat beaten up bodies, which make you worry about the chassis.

      1. jeff

        The bottom of the used car market has been ravaged, but the entire market has been inverted. Ford and Hyundai/Kia have sent warnings to their dealers that if the markups above msrp continue for new cars/suvs, they risk future allotments. The manufacturers know that while dealers will be blamed, so will they.

        Used cars that were $25k last year are over $35k now. It’s absurd.

    3. Canadian Canuck

      Things are completely nuts.
      Ferguson, our plumbing supplier sent us notice of price increase across the board , 86% increase on all their products starting April 1st. Don’t know how they came up with that precise number. The inflation genie is out.
      I used to go to Key West for spring holiday every year, I tried to book the same hotel as I do each year, price is up 225% and fully booked. So are the others. For first time is so many years I am considering cancelling the trip. I dont know how they come with 7.5% inflation number, people are being lied to.
      Two of the bloodiest periods of our history, the French revolution and the raise of Hitler were direct results of inflation wiping out people’s savings. One has to hope that sounder minds will prevail in our government and make the hard choices as we are heading into stormy seas. Sound money is crucial for a society to function in peace.

      1. Wukchumni

        When I was a kid, Mexican immigrants were largely limited to Ca/Az/NM/Tx-the border states, but now you’ll find them in every state of the union.

        The exchange rate for Mexican Pesos went from a solid 12.5 to the $, to 3,300 to the $ in a dozen years from the late 70’s to early 90’s.

        Luckily, Mexican immigrants had an out in that they could come here to live and work, where will we go when similar inflation comes calling? (as it has twice in our nation’s history with Continental Currency and Confederate Currency)

        1. Wukchumni


          I was in Mexico during their inflationary period in the 1980’s, and one thing you’d see that was incredibly laborious was the retailers who had to physically change price stickers on everything as inflation came calling, you might be selling something for less than replacement cost a fortnight after you bought the same from a wholesaler.

          Our situation will be a heck of a lot easier in that there are no price stickers or prices for that matter on anything. To adjust prices on a computer requires almost no effort, in comparison.

          Thus, retailers can easily maneuver and i’d daresay, anticipate higher costs/retail prices.

      2. lordkoos

        We needed to have a new roof put on our house last year, it’s a medium sized house but not huge. We were lucky in that we didn’t need any of the plywood underneath the shingles replaced, as at the time it was selling for $100 a square. The bill still came to $22,000. The last time I had a roof done was in Seattle in the early 2000s (a slightly smaller house). and it was well under $10k.

        The official stats on inflation are gamed anyway, as the gubmint no longer uses the same calculation as they once did. To see a number that is closer to the real rate of inflation I look at shadowstats.com.

      3. russell1200

        I am an electrician. We work on long lead time projects. It’s fun.

        Ferguson seems to have a stronger position in the plumbing field than any electrical supply house does in theirs. I wonder if they are just trying to push through on their pricing power figuring the smaller houses will follow their lead.

  2. griffen

    I am not sure if it is more angst that the costs of everyday items will just continue higher, or legitimate anger at the absolute tone deafness of our leaders and leading lights of the world. A healthy combination makes the most sense. Personally, the anxiousness of what the heck follows in 2024 on the horizon is concerning.

    Americans have been comforted for the seemingly low level of everyday inflation for the past three decades, give or take. Ignoring the absurdity / realities of higher education and healthcare in the above timeline, today at long last the cost of every damn thing I need to live or want to replace is much higher compared to 24 or 36 months.

    Excepting for flat screen televisions, I suppose, or some other relatively benign example.

    1. PatriciaStewartMenzies

      Inflation is killing our family’s ability to do more than just survive, and that’s with Mother in Law, daughter and her husband moving into the rumpus room and paying 1/4 the rent they did elsewhere.
      Grandpa is reaching for his shotgun, the problem as he puts it,
      “I don’t know who I should shoot without a long drive to D.C.”

      F*** Bidenflation and updating a 1980s slang saying:

      F*** Kamala, the whore he rode in on..

    1. Questa Nota

      Comms these days, a paean to peons comes across to the latter as a pee-on.

      The Proposition Nation of Old Monticello Tom morphed, with a lot of help, into propositioning streetwalkers, and corporatewalkers*, where either one could land you in jail with unmentionable afflictions.

      People stopped believing in Team Dem, and Team Rep, as they saw and lived the two or more tier futures that those grifters rented to them. This year is drifting toward an inflection point, or perhaps a saddle, where one side is fire and another ice. Choose your path dependency wisely.

      * see also private equity, private banking, private everything to evade publics

      1. JBird4049

        >>>Choose your path dependency wisely.
        And just how does the average person do that? The media is made of liars, mental midgets, and fools. There are some good sources online and across the political spectrum who are honest, if nothing else, but they are being hidden; wherever you live, your friends and family are like call-and-response music: Pelosi is Evil, Pelosi is Evillll, or whatever. It does not matter your politics or area. The resources needed to get the information to decide or to do once that is done is getting severely limited and more so everyday.

        When I see articles just baffled as to why people are having fewer children or despair and unrest is growing, I think either they are gaslighting or they are just delusional. It is just like across the homeless in the Bay Area. They were not there fifty years ago and have been a growing problem for forty as housing costs keep going up and income does not. Yet, too many people keep saying lazy, moochers, drugs, insane people all while refusing to see the cost and income disparity or that, as studies have shown, becoming homeless often makes people ill, including mentally as well as rapidly aging them.

        Everything the commenters and the site’s owners talk about is easy to see even, if the details are arguable, but too many do not want to see it.

  3. ChrisFromGeorgia

    Just an anecdote but in my social network, I am hearing more stories about folks having a hard time making ends meet.

    I suspect that the COVID stimulus money is now fumes having largely run out. September 6 was the last enhanced UE check and it takes about 6 months for policy changes to work their way thru the economy. Presumably most of the $$ in the big infrastructure bill from last year has been delayed or grifted away by the usual suspects.

    1. Turks

      I refuse to file anymore income taxes until I get a check for $600 that was promised to me. Smartest thing I ever did financially was file an exemption from withholding. Now I owe the government, not the other way around.

      To be exempt from withholding, both of the following must be true:

      You owed no federal income tax in the prior tax year, and
      You expect to owe no federal income tax in the current tax year.

      “Truth” is as malleable as is “The check’s in the mail.”

  4. The Rev Kev

    I can see how this is going to play out. So it is January 20th 2025 and once more President Donald Trump is sworn into Office – with even more swearing heard in DC offices. President Trump says that yes, the inflation under President Biden was bad but not as bad as that under President Harris. But the hyperinflation under Acting Pro Tem President Neera Tanden was the final straw for most Americans. However, under his leadership he once more looks forward to making America Great Again – by removing all taxes on America’s billionaires.

    The truth of the matter is that there are two economies in the US. The economy of Wall Street and the elite and the economy that the rest of the country has to endure. But for the past few years they have become dislocated. That is why under the Pandemic, the former economy has been making out like gangbusters while for the later it has totally sucked. Guess who the readership is for the Wall Street Journal?

    1. Canadian Canuck

      And sending indiscriminately $1 trillion in forgivable and non taxable PPP to businesses who mostly didnt need it only helped to make the chasm deeper between the plebs and the bourgeoisie

      1. Turks

        And s(p)ending 30 billion to Ukraine after they gave your son 100 million in some shady deal is a cat that’s out of the bag.

  5. Jason Boxman

    It’s interesting that we haven’t heard about breadlines in it seems at least a year now. For awhile there dire stories about long lines, lack of funding, and lack of food stuffs to buy being available for pantries anyway, as traditional sources had run dry due to pandemic closures and behavior changes.

    I haven’t seen any such stories in quite a while now.

    So there’s no visibility into this once highly visible sign of household distress in the form of potential or real starvation.

    1. anon y'mouse

      the enforcers of our reality didn’t want to heighten any of those humane issues because it was too busy trying to demonize the proles to “hurry up and get back to work (make massah $$)” and saying we were living it up on stimmy checks and rent moratorium, thus Greatly Resigning our posts in droves to sit on our couches playing video games at the cost of the “taxpayers”.

      you can’t do both. talking about food pantries and genuine financial hardships would betray all this lying.

      1. JBird4049

        I haven’t had to go to a pantry in awhile, thank God and family, but nothing has changed since then, except in getting worse. Maybe I should go out and check. I might be able to kick in a twenty or two.

        I suspect that the first year of the Great Depression was the last time hunger was great. After that, all levels of government everywhere with a lot of churches and many private people capped it. However, government functioned as did the many churches and charities. Politicians both saw it as their duty and as a way to keep in office.

        Today, pffft.

        If food costs keep going up, Summer might be hotter than anticipated. Maybe as hot as 1967 or 68.

  6. Alex Cox

    Randy Newman’s song ‘My Life is Good’ sums up the fortunate position of the WS journalist who wrote this.

  7. Steve Ruis

    Of course, the fundamental question is “how can the economy be booming when people are not experiencing any kind of economic increase”? And the reason is that “The Economy” is gauged by measures that only rich people recognize. Who cares if the stock market is growing in leaps and bounds when I am living paycheck-to-paycheck?

    Why are there no gauges of The Economy that have to do with the experiences of ordinary citizens? Why are they all based upon things rich people look at? Who cares about the levels of employment or unemployment when the jobs are mostly shitty jobs? Why are all the measures of The Economy based upon quantities and none on qualities?

    1. JBird4049

      As noted at the top, what is interesting is the contrast between the blather of Pravadas and Izvestia s of the media and the people (I assume increasingly higher up the class scale) who do not feel all warm and fuzzy on the economy. I would guess that over half of the nation is being crushed and half of the remaining people are merely treading water very and rapidly too.

      The comedian Richard Pryor had a routine (about philandering or drug addiction) where he would say “Who are you going to believe? Me or your lying eyes?”

      They keep shouting this more loudly all the time as if that will convince people to believe them despite the military defeats, the economy slowly collapsing over the decades, wokeism, the incompetence, the deaths, the decay of everything. Who are we going believe? Their credentials or our lying eyes?

  8. russell1200

    “The article [the WSJ one] also largely misses the fact that most people feel less and less in control of their lives, and Covid whipsaws only made that worse.”

    You could have lead with this and stopped, and I think you would have nailed it.

    But seriously, very good points.

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