You know what I'd love to see from Decode Econ? One newsletter arguing that the economy is really strong, and another one arguing that it's really weak. The strongest evidence from each perspective. Please please please?
I want to agree with Brian and Scott. A set of long-term trends (since WWII) of the top 1%, the top 10% and the bottom 50% of earners, including yearly income, savings rate, and debt level would be highly revealing. Certainly Reagan made a big difference in 1980 -- it's likely we have had another inflection point with the OBBB, but time will tell.
This is an interesting take, but I wonder how different the bifurcated economy is from the historical trend. Put another way, is the bifurcated economy a novel thing connected to this period of time, or is it a kitschy name for a normal occurrence in periods of economic slowdown? My instinct is that the wealthy have always been the primary spenders and that low income and seniors, especially those reliant on social security, would be those who face limitations. The real question in terms of the economy is what is happening in the middle. Is the point of the bifurcated economy that the middle is vanishing? If so, I would be interested in seeing some data to support this.
Good point. My kneejerk reaction is that yes, it has always been this way but we have an inequality situation, steadily worsening since Reagan, that has made the rich richer, poor poorer, and drastically shrunk the middle class.
Increased income inequality may lead to more spending inequality. A more concerning outcome is the impact on income mobility. That might warrant another post and discussion.
You know what I'd love to see from Decode Econ? One newsletter arguing that the economy is really strong, and another one arguing that it's really weak. The strongest evidence from each perspective. Please please please?
Oh this is a good idea.
Sentiments matter. Consumer Sentiments are what we reminds us that economics is a social science. People wont spend what they feel they dont have.
Usually, that is the case. Lately, sentiment and spending have been uncorrelated, and that is confusing economists.
I want to agree with Brian and Scott. A set of long-term trends (since WWII) of the top 1%, the top 10% and the bottom 50% of earners, including yearly income, savings rate, and debt level would be highly revealing. Certainly Reagan made a big difference in 1980 -- it's likely we have had another inflection point with the OBBB, but time will tell.
This is an interesting take, but I wonder how different the bifurcated economy is from the historical trend. Put another way, is the bifurcated economy a novel thing connected to this period of time, or is it a kitschy name for a normal occurrence in periods of economic slowdown? My instinct is that the wealthy have always been the primary spenders and that low income and seniors, especially those reliant on social security, would be those who face limitations. The real question in terms of the economy is what is happening in the middle. Is the point of the bifurcated economy that the middle is vanishing? If so, I would be interested in seeing some data to support this.
Good point. My kneejerk reaction is that yes, it has always been this way but we have an inequality situation, steadily worsening since Reagan, that has made the rich richer, poor poorer, and drastically shrunk the middle class.
Increased income inequality may lead to more spending inequality. A more concerning outcome is the impact on income mobility. That might warrant another post and discussion.