With the job market softening and economists hammering on about the negative consequences of tariffs, some people expect the US economy to slow down and eventually drop into recession.
Yes, of course. When right-wingers broke into Democrat leaders' homes and attacked, recently even assassinated them, it was business as usual, and mostly just grounds for scorn towards the victims. But when a Republican demagogue gets shot, by a still-unidentified assailant, it's grounds for civil war. Of course. Yes, let's normalize that.
The study tells us that American society is becoming increasingly divided, primarily in terms of financial opportunities.
I am Italian and I am familiar with my country's contemporary history and what happened in the 1970s, when the right wing sought to create tension and direct confrontation by fomenting street protests. Civil society was able to oppose thanks to a very fresh memory of what had happened a few years earlier during fascism and, above all, a process of civil reforms that had created a satisfied and balanced middle class at the time.
There have been more than one failed fascist-style coups (including the Borghese coup, which Nixon knew was being planned).
I agree that the statements made by radical influencers are ridiculous, but the real problem is economic polarization and the destruction of the middle class, which the study provides some evidence of.
'They show that low-income households did indeed feel the pinch from the higher cost of living. Lacking any meaningful savings, they made up for the shortfall by using buy-now-pay-later schemes and – more commonly – racking up credit card debt.'
Didn't Krugman accuse them of having a false consciousness? Which prevented them from acknowledging the glorious Biden economy thus explaining their vote for Trump.
I broadly concur with your view. However, the wild card is the markets (and broadly asset prices). High-income households are very exposed there, so any sustained drops in (equity) markets could have an outsized effect on the US economy.
You know, as someone who is not wealthy but is a firmly middle class long-time professional who has been unable to find work for two and a half long years now, and is wrapping up a long career by sliding into destitution and homelessness, and has watched dozens of others ahead of me on that trajectory in the last two years with hundreds more who I personally know in the same precarious situation, I'm far beyond tired of people refusing to acknowledge the truth:
America doesn't have "an economy". We have several side-by-side economies:
1.) An economy for the upper quintile, decile, or smaller, which is currently booming as it has since 1980;
2.) Another economy for the rest of us, right alongside it, which has been mired in a major substantive, if not technical, recession for at least two years now.
Career professionals, if they can find job opportunities at all, are now regularly offered lower pay than the same jobs paid 25 years ago, while food and bills cost four times what they did then. Too many people have already slid from white collar careers into actual homelessness in just the last two years. And I've heard of too many directly related suicides.
LinkedIn is more full than I've ever seen it of people, formerly able to support themselves, lost in despair and hopelessness. You can't even get a job at McDonalds or Home Depot.
Meanwhile, the rich are doing well, so everybody pretends it's not happening.
And we've developed a new rigid caste that ensures you can no longer move from one of the lower economies to the upper. Remember when America used to be called"The Land Of Opportunity"? Have you noticed you haven't heard that phrase in a while?
And after two long years of this, we get to sit and watch people still continue to publish pieces about what good shape we're in.
Wait until these chickens come home to roost. I just don't believe you can put this many skilled people out of work for this long without consequences, no matter how well the wealthy are coasting above it all.
The future is terrifying to many of us who spent most of our lives believing we had, if not job security, at least opportunity. And we've been brutally disabused of that misconception.
But the inevitable fallout from this still won't touch the top economic strata, so people will still write pieces about what good shape the US is in.
First of all, I hope you will find a good job soon and will get back on your feet. I mean it.
I lost my job twice within two years, and each time it took me between six and twelve months to find a new one. And each time, my salary was lower than the previous one. I know the toll it takes on your mental health, especially if you are the sole breadwinner in the family.
My advantage compared to your situation or the situation of 80% or more of Americans was that while I didn't collect unemployment benefits or any other government benefits, I knew that if I ran out of money, I would have a decent safety net available because I live in the UK. I didn't have to worry about healthcare or similar things, which was important during those days. I knew, ultimately, the worst case situation would be I lose my house, but I wouldn't become homeless because I would be able to afford a rental flat even if I was long-term unemployed.
I am fully aware that the US is not just one single economy, but indeed several. And the headline news and national data are dominated by the few rich people and what they do, just like the US stock market is dominated by a handful of superstar companies that are doing great, while the rest of the economy and the stock market are doing worse than Europe.
This is, in fact, why I am growing more and more distant from the US and Americans (I am generalising, my wife is American, after all). It seems to me that the US is a country with many more problems than Europe or the UK, yet Americans, broadly speaking, seem to think that their country is doing much better than the rest of the world. And as long as they don't realise how badly they are doing, they won't change anything about their economy and their system.
Of course, this difference in perception of the economy and the country is what is at the heart of the political divide and what has led to the rise of Trump, etc., who promised easy solutions to complex problems.
But I don't know what will become of the US. I grew up, like so many Europeans, with great admiration for the US. I loved the country and wanted to live there. As I said, I married an American, but honestly, by now, I pity the US.
That stories like yours exist in the world's richest country is a disgrace, and politicians and businesses should be ashamed for letting something like this happen. I don't know where this will end, but I fear it will continue to get worse.
Again, I hope you will get back on your feet quickly and I wish you all the best.
Thank you so much for the thoughtful reply. I should probably apologize a little for my knee-jerk reaction; in the back of my head, having been a reader for quite a while, I didn't seriously think you are unaware of what's going on. It's really just that it's getting very hard to watch this happen on a personal level for years now, not just to myself but to many people I know, and see nothing in the media, nothing online. Everything I'm seeing is contrary to what I've experienced firsthand. I'm old enough to remember quite a few recessions and I've never myself seen financial devastation like I have in the last two and a half years, so I suppose I had a bit of a knee-jerk reaction to your headline.
As to the rest of your comments, not much to add except that I agree, across the board. If I'd grown up in Europe I'd probably be saying those same things.
And you're right, the politicians and business *should* be ashamed, which is probably the reason nobody anywhere is talking about any of it, outside of the people directly affected. It's really amazing. I find myself wondering how bad this is going to have to get before Joe Average finally notices.
As I said, though: I can't imagine these chickens aren't coming home to roost at some point. Too much damage has been done. I don't know what's going to happen, I can't even conjecture, but I'm scared of it.
I also appreciate your well-wishes for finding work. Unfortunately, and I tell you this only because I want people to know this is the kind of thing that is happening in our country, but, after two and a half years of this, the hard reality is: at this point I'm not able to keep hoping for a job. I just don't have the emotional resources to keep hoping. I do still send out applications, but I figure that realistically, unless I have a stroke of luck on the order of winning the lottery, in a few more months my life savings will finally be completely spent on rent and food and I'm going to wrap up a successful decades-long career in IT by becoming a homeless person, as I've seen happen to too many other professionals already. It's a bad situation. I'm actually planning on transitioning to homeless sooner than necessary, so at least I'll be homeless with a little money left in the bank, not homeless and destitute.
It's ugly. The fortunate thing for me is I don't have a family, no mouths to feed—I'm not dragging anybody else down with me. But either way, transitioning to homelessness in my 50s was not what I was working towards. I'm not a terribly materialistic person, but I have a few things I enjoy having, and I'm looking at all the stuff I worked a lifetime to buy and trying to decide if and what I can keep, or if I'm going to need to get rid of all of it. And I'm not happy about that.
And I have it better than most. I used to make enough money that I started this with a far bigger emergency fund than most people I know. I thought having 2-3 years of living expenses banked was an adequate safety cushion, and, incredibly, it wasn't.
It also points out that U.s. is likely to drop into civil war.
Here's even a casus belli:
https://edition.cnn.com/us/live-news/charlie-kirk-shot-utah-09-10-25
Yes, of course. When right-wingers broke into Democrat leaders' homes and attacked, recently even assassinated them, it was business as usual, and mostly just grounds for scorn towards the victims. But when a Republican demagogue gets shot, by a still-unidentified assailant, it's grounds for civil war. Of course. Yes, let's normalize that.
https://x.com/realalexjones/status/1965871344979226838?s=46&t=fPtHymA_LwUFKhdSgZcFsw
https://www.thedailybeast.com/they-are-at-war-with-us-jesse-watters-responds-to-charlie-kirks-death/
I couldn't be less interested in whatever Alex Jones or The Daily Beast have to say.
The study tells us that American society is becoming increasingly divided, primarily in terms of financial opportunities.
I am Italian and I am familiar with my country's contemporary history and what happened in the 1970s, when the right wing sought to create tension and direct confrontation by fomenting street protests. Civil society was able to oppose thanks to a very fresh memory of what had happened a few years earlier during fascism and, above all, a process of civil reforms that had created a satisfied and balanced middle class at the time.
There have been more than one failed fascist-style coups (including the Borghese coup, which Nixon knew was being planned).
I agree that the statements made by radical influencers are ridiculous, but the real problem is economic polarization and the destruction of the middle class, which the study provides some evidence of.
'They show that low-income households did indeed feel the pinch from the higher cost of living. Lacking any meaningful savings, they made up for the shortfall by using buy-now-pay-later schemes and – more commonly – racking up credit card debt.'
Didn't Krugman accuse them of having a false consciousness? Which prevented them from acknowledging the glorious Biden economy thus explaining their vote for Trump.
It's always the others who are dumb...
Increased wealth inequality is a better outcome than recession for this administration.
For this one, yes.
I broadly concur with your view. However, the wild card is the markets (and broadly asset prices). High-income households are very exposed there, so any sustained drops in (equity) markets could have an outsized effect on the US economy.
Just wait till the AI and crypto bubbles pop. The housing market also may collapse soon.
You know, as someone who is not wealthy but is a firmly middle class long-time professional who has been unable to find work for two and a half long years now, and is wrapping up a long career by sliding into destitution and homelessness, and has watched dozens of others ahead of me on that trajectory in the last two years with hundreds more who I personally know in the same precarious situation, I'm far beyond tired of people refusing to acknowledge the truth:
America doesn't have "an economy". We have several side-by-side economies:
1.) An economy for the upper quintile, decile, or smaller, which is currently booming as it has since 1980;
2.) Another economy for the rest of us, right alongside it, which has been mired in a major substantive, if not technical, recession for at least two years now.
Career professionals, if they can find job opportunities at all, are now regularly offered lower pay than the same jobs paid 25 years ago, while food and bills cost four times what they did then. Too many people have already slid from white collar careers into actual homelessness in just the last two years. And I've heard of too many directly related suicides.
LinkedIn is more full than I've ever seen it of people, formerly able to support themselves, lost in despair and hopelessness. You can't even get a job at McDonalds or Home Depot.
Meanwhile, the rich are doing well, so everybody pretends it's not happening.
And we've developed a new rigid caste that ensures you can no longer move from one of the lower economies to the upper. Remember when America used to be called"The Land Of Opportunity"? Have you noticed you haven't heard that phrase in a while?
And after two long years of this, we get to sit and watch people still continue to publish pieces about what good shape we're in.
Wait until these chickens come home to roost. I just don't believe you can put this many skilled people out of work for this long without consequences, no matter how well the wealthy are coasting above it all.
The future is terrifying to many of us who spent most of our lives believing we had, if not job security, at least opportunity. And we've been brutally disabused of that misconception.
But the inevitable fallout from this still won't touch the top economic strata, so people will still write pieces about what good shape the US is in.
First of all, I hope you will find a good job soon and will get back on your feet. I mean it.
I lost my job twice within two years, and each time it took me between six and twelve months to find a new one. And each time, my salary was lower than the previous one. I know the toll it takes on your mental health, especially if you are the sole breadwinner in the family.
My advantage compared to your situation or the situation of 80% or more of Americans was that while I didn't collect unemployment benefits or any other government benefits, I knew that if I ran out of money, I would have a decent safety net available because I live in the UK. I didn't have to worry about healthcare or similar things, which was important during those days. I knew, ultimately, the worst case situation would be I lose my house, but I wouldn't become homeless because I would be able to afford a rental flat even if I was long-term unemployed.
I am fully aware that the US is not just one single economy, but indeed several. And the headline news and national data are dominated by the few rich people and what they do, just like the US stock market is dominated by a handful of superstar companies that are doing great, while the rest of the economy and the stock market are doing worse than Europe.
This is, in fact, why I am growing more and more distant from the US and Americans (I am generalising, my wife is American, after all). It seems to me that the US is a country with many more problems than Europe or the UK, yet Americans, broadly speaking, seem to think that their country is doing much better than the rest of the world. And as long as they don't realise how badly they are doing, they won't change anything about their economy and their system.
Of course, this difference in perception of the economy and the country is what is at the heart of the political divide and what has led to the rise of Trump, etc., who promised easy solutions to complex problems.
But I don't know what will become of the US. I grew up, like so many Europeans, with great admiration for the US. I loved the country and wanted to live there. As I said, I married an American, but honestly, by now, I pity the US.
That stories like yours exist in the world's richest country is a disgrace, and politicians and businesses should be ashamed for letting something like this happen. I don't know where this will end, but I fear it will continue to get worse.
Again, I hope you will get back on your feet quickly and I wish you all the best.
J
Thank you so much for the thoughtful reply. I should probably apologize a little for my knee-jerk reaction; in the back of my head, having been a reader for quite a while, I didn't seriously think you are unaware of what's going on. It's really just that it's getting very hard to watch this happen on a personal level for years now, not just to myself but to many people I know, and see nothing in the media, nothing online. Everything I'm seeing is contrary to what I've experienced firsthand. I'm old enough to remember quite a few recessions and I've never myself seen financial devastation like I have in the last two and a half years, so I suppose I had a bit of a knee-jerk reaction to your headline.
As to the rest of your comments, not much to add except that I agree, across the board. If I'd grown up in Europe I'd probably be saying those same things.
And you're right, the politicians and business *should* be ashamed, which is probably the reason nobody anywhere is talking about any of it, outside of the people directly affected. It's really amazing. I find myself wondering how bad this is going to have to get before Joe Average finally notices.
As I said, though: I can't imagine these chickens aren't coming home to roost at some point. Too much damage has been done. I don't know what's going to happen, I can't even conjecture, but I'm scared of it.
I also appreciate your well-wishes for finding work. Unfortunately, and I tell you this only because I want people to know this is the kind of thing that is happening in our country, but, after two and a half years of this, the hard reality is: at this point I'm not able to keep hoping for a job. I just don't have the emotional resources to keep hoping. I do still send out applications, but I figure that realistically, unless I have a stroke of luck on the order of winning the lottery, in a few more months my life savings will finally be completely spent on rent and food and I'm going to wrap up a successful decades-long career in IT by becoming a homeless person, as I've seen happen to too many other professionals already. It's a bad situation. I'm actually planning on transitioning to homeless sooner than necessary, so at least I'll be homeless with a little money left in the bank, not homeless and destitute.
It's ugly. The fortunate thing for me is I don't have a family, no mouths to feed—I'm not dragging anybody else down with me. But either way, transitioning to homelessness in my 50s was not what I was working towards. I'm not a terribly materialistic person, but I have a few things I enjoy having, and I'm looking at all the stuff I worked a lifetime to buy and trying to decide if and what I can keep, or if I'm going to need to get rid of all of it. And I'm not happy about that.
And I have it better than most. I used to make enough money that I started this with a far bigger emergency fund than most people I know. I thought having 2-3 years of living expenses banked was an adequate safety cushion, and, incredibly, it wasn't.
Can't imagine what you are going through. Hope you will get out of this situation soon.
Wealth effect if the stock market sells off?
If 80% of the population feels they are in a recession, it IS a recession. Doesn't matter what the data 'technically' says!