chapotraphouse

i'm reading the transcript, seems to be "but if the economy is actually great then why are americans big mad about it?" in the form of ezra klein interviewing his wife for 90 minutes, with notable insights like "actually things are pretty expensive, like healthcare and housing, so maybe people don't like that"

Back in September, the Economist put out this interesting model that pulled in a bunch of different bits of economic data, so things like the unemployment rate, inflation, gas prices, the S&P 500. And they used all that to predict how people would feel about the economy. And they showed that from 1980 to 2019. All these bits of data, they do predict how people feel about the economy.

And then the pandemic hits and the model completely falls apart.

By late 2023, the model is looking at low unemployment, it’s looking at falling inflation, it’s looking at a great stock market, and it predicts consumer sentiment. It’s going to be 98 out of 100, 98 out of 100. That is Joe Biden gets his face on a coin territory. Here, in reality, the actual consumer sentiment was 69. That is Joe Biden might lose re-election territory.

yeah turns out extrapolating weighted multivariable economic regressions isn't much more reliable than haruspicy

but it's funny, throughout the interview ezra klein keeps referring to "my theory"

And part of my theory of this, having been an economics reporter during that period, is we just weren’t paying much attention to prices. We were paying so much attention to unemployment. [etc] And then the pandemic hits and everything scrambles for a while. And then inflation comes. And inflation makes prices salient.

like the whole "theory" seems to be that people are simply noticing higher prices in a way that they (meaning himself, really) weren't before even though actually they're better off like the data shows

there's some fun quotes in here, though:

Sometimes, I think the problem with the greedflation thesis was simply the name. Greed made it sound like they were doing something evil, when what corporations do naturally is try to find the price at which they can balance market demand and the highest profits they can possibly make.

thanks, ezra!