A follow-up to Hexapodia LVII: "The 'Vibecession' Is Losing Its Vibe". In which I demand that many—perhaps especially the Financial Times & Bloomberg Editorial Boards—shape up & do better...
"The Bloomberg Editorial Board would be well advised to look very hard at the Conference Board’s actual numbers before it writes again. Individual anecdotes do not trump actual data:"
Bingo! And before writing off editorials like that one, they should also study other surveys, and not for top line "optimism" or "sentiment" types of data. Those can be off the mark, often widely off. Look also at what people and businesses in the surveys say they are DOING.
Re your reference to Bloomberg Editorial Board, you might have referenced this column from Bloomberg Opinion last November by yours truly which precedes your commentary on vibes and assails the disingenuousness you decry:
re: Ryan Cummings & Neale Mahoney: Digesting inflation
A possible example of behavioral economics - but in this case measuring the sentiment rather than actions. Psychological Economics?
In any case, it neatly shows why consumers, like me, qwetch over high, but now relatively stable prices, whilst economists insist all is good because inflation indices are low and complain about consumer sentiment. BTW, as a reminder to economists, those on SSI have fixed incomes whose inflation adjusted increases are annual, after the fact, and not actually adjusted to the rising prices of things senior citizens experience more of - e.g. healthcare.
SSI fixed incomes: Those first big adjustments happened in January 2023. Various minimum wage adjustments happened too. Your point is well taken though. Meanwhile, there's a long tradition in macroeconomics of staggered wage/price contracts because of which the adjustments to evolving conditions aren't instantaneous. Google, for instance, John Taylor's and Stanley Fischer's papers circa 1970s, 1980s. People are now applying those, roughly speaking, to consumer sentiment. Hence, the lags in "digestion." But the paradox here is that consumer behavior has been just fine. What is at issue here is what they say to surveys about touchy-feely things like sentiment. The Media Machine, to use Brad's term, has been terribly irresponsible.
"The Media Machine, to use Brad's term, has been terribly irresponsible.". No argument there.. However, I would say that what this really is, is large, higher circulation media. Despite the constant failure of local newspaper outlets, other media, mostly internet based, are proliferating, and do offer different perspectives, but to small audiences. Krugman has a larger megaphone in the NYTimes, but when are any of his opinions noted when they conflict with the "big names" opinion columns in the paper?
In my "city" (popn ~ 90,000), the local social media "Nextdoor" has commenters who demonstrate extradinary ignorance about the real world, perhaps informed by biased media and echoed by social groups. Posting links to facts rarely seems to modify their opinions. There are times when, "holding a candle in the dark" seems to be fraught with others trying to blow it out.
A solution could be to start local media "nextdoor" channels to counter the disinformation/ignorance. People seem to grasp the spoken word or visuals better than the written word. Reading and writing is very recent in human history. it is taxing, or at least more taxing than seeing, speaking and hearing. I could be wrong.
Journalists should report equity prices, profit, employment, etc. only in % YOY terms. That way 1) predictions on the next data point are eerily accurate, and 2) they can write that the data is 'stubborn'. In other words, the lazy, innumerate twits can mail-in every single article,
It's fine to point out that the economy is doing fine. It's a tricky question of economic ethics whether it is proper to give undeserved credit to Biden for growth and low unemployment because he gets undeserved blame for inflation.
I'll admit that, "My economic policies may have been mediocre, but Trump's were and would be much worse." is not the best re-election campaign slogan one can come up with. If Biden had not tried to mimic a Sanders-Warren administration, he would have a lot more to have boasted about.
"They see their own financial system as good, but they hear from the Media Machine that there are lots of things going very wrong elsewhere, and they are concerned because they are not without empathy—at least, not without empathy for the right kind of people."
This quote exemplifies CEOs of companies as well. For a while, they have expressed concern that others weren't doing well while their own companies were just fine. This is what happens when analysts latch on to,"forward-looking" variables like the yield curve and announce that a recession is coming. It becomes an echo chamber. CEOs hear it from their advisors, and so on. Others are in trouble, we are not. Meanwhile, if you look at business investment, that's been OK.
"The Bloomberg Editorial Board would be well advised to look very hard at the Conference Board’s actual numbers before it writes again. Individual anecdotes do not trump actual data:"
Bingo! And before writing off editorials like that one, they should also study other surveys, and not for top line "optimism" or "sentiment" types of data. Those can be off the mark, often widely off. Look also at what people and businesses in the surveys say they are DOING.
Since the Republicans want to live in the Hellscape of Earth IV, can we send them there? Asking for a friend.
Re your reference to Bloomberg Editorial Board, you might have referenced this column from Bloomberg Opinion last November by yours truly which precedes your commentary on vibes and assails the disingenuousness you decry:
Biden’s Bad Economic Polls Come With An Asterisk https://www.bloomberg.com/opinion/articles/2023-11-22/joe-biden-s-bad-economic-polls-should-come-with-big-asterisk
re: Ryan Cummings & Neale Mahoney: Digesting inflation
A possible example of behavioral economics - but in this case measuring the sentiment rather than actions. Psychological Economics?
In any case, it neatly shows why consumers, like me, qwetch over high, but now relatively stable prices, whilst economists insist all is good because inflation indices are low and complain about consumer sentiment. BTW, as a reminder to economists, those on SSI have fixed incomes whose inflation adjusted increases are annual, after the fact, and not actually adjusted to the rising prices of things senior citizens experience more of - e.g. healthcare.
SSI fixed incomes: Those first big adjustments happened in January 2023. Various minimum wage adjustments happened too. Your point is well taken though. Meanwhile, there's a long tradition in macroeconomics of staggered wage/price contracts because of which the adjustments to evolving conditions aren't instantaneous. Google, for instance, John Taylor's and Stanley Fischer's papers circa 1970s, 1980s. People are now applying those, roughly speaking, to consumer sentiment. Hence, the lags in "digestion." But the paradox here is that consumer behavior has been just fine. What is at issue here is what they say to surveys about touchy-feely things like sentiment. The Media Machine, to use Brad's term, has been terribly irresponsible.
"The Media Machine, to use Brad's term, has been terribly irresponsible.". No argument there.. However, I would say that what this really is, is large, higher circulation media. Despite the constant failure of local newspaper outlets, other media, mostly internet based, are proliferating, and do offer different perspectives, but to small audiences. Krugman has a larger megaphone in the NYTimes, but when are any of his opinions noted when they conflict with the "big names" opinion columns in the paper?
In my "city" (popn ~ 90,000), the local social media "Nextdoor" has commenters who demonstrate extradinary ignorance about the real world, perhaps informed by biased media and echoed by social groups. Posting links to facts rarely seems to modify their opinions. There are times when, "holding a candle in the dark" seems to be fraught with others trying to blow it out.
A solution could be to start local media "nextdoor" channels to counter the disinformation/ignorance. People seem to grasp the spoken word or visuals better than the written word. Reading and writing is very recent in human history. it is taxing, or at least more taxing than seeing, speaking and hearing. I could be wrong.
True, true.
If you want to know how stupid it is, I refer you to, https://www.youtube.com/shorts/ivG2cnMLPBo.
"I think I figured out why they are crashing the economy...."
Journalists should report equity prices, profit, employment, etc. only in % YOY terms. That way 1) predictions on the next data point are eerily accurate, and 2) they can write that the data is 'stubborn'. In other words, the lazy, innumerate twits can mail-in every single article,
It's fine to point out that the economy is doing fine. It's a tricky question of economic ethics whether it is proper to give undeserved credit to Biden for growth and low unemployment because he gets undeserved blame for inflation.
I'll admit that, "My economic policies may have been mediocre, but Trump's were and would be much worse." is not the best re-election campaign slogan one can come up with. If Biden had not tried to mimic a Sanders-Warren administration, he would have a lot more to have boasted about.
"They see their own financial system as good, but they hear from the Media Machine that there are lots of things going very wrong elsewhere, and they are concerned because they are not without empathy—at least, not without empathy for the right kind of people."
This quote exemplifies CEOs of companies as well. For a while, they have expressed concern that others weren't doing well while their own companies were just fine. This is what happens when analysts latch on to,"forward-looking" variables like the yield curve and announce that a recession is coming. It becomes an echo chamber. CEOs hear it from their advisors, and so on. Others are in trouble, we are not. Meanwhile, if you look at business investment, that's been OK.