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An economist offered an explanation for a paradox that has emerged in recent data showing that spending has remained robust even as consumers report feeling pessimistic.
Joanne Hsu, who is the director of the University of Michigan’s consumer sentiment survey, told CNBC on Friday that she thinks Americans have abandoned plans to save money as they see their financial goals look less attainable and are spending money instead.
“This positive spending is not a reflection of some sort of internalized secret sense of confidence that consumers have,” he explained. “And instead my interpretation is that consumers see that a lot of aspirational goals that we talk about as part of the American Dream—homeownership, paying for college, paying for college for your kids, having a comfortable retirement—with high prices and high interest rates right now, those aspirational goals just feel increasingly out of reach.”
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62% of Americans don’t earn enough to buy a house in the cheapest state in the country, the median wage is lower than the cost to buy that same house, and half of the people earn even less than the median. Of course people have no reason to save anymore.
↑ What decades of car-dependent NIMBY single-family zoning does to a MFer.
Yeah, anyone surprised by this just doesn’t know what poverty does to someone.
https://phys.org/news/2012-11-poverty-people-focus-short-term.html
We’re reacting exactly as we’re supposed to.
If you don’t know where tomorrows lunch is coming from, how are you going to save for rent?
If you don’t know where this rent is coming from, how are you going to save for a mortgage down payment?
When Maslow’s basic needs aren’t met, that’s what we devote all our attention to. Even in the brief periods where resources are in surplus, our monkey brains say we have to use all those resources ASAP while we still have them.
It’s not people saying “yolo” and intentionally blowing their money, it’s evolution being geared to survival in the present rather than the next decade. These people are acting rationally, it’s just on a very very small timescale.
It’s why the best way to incentive the economy is give poor people money. They’ll keep spending it immediately until their basic needs are met, then for a little longer, then finally they can break out of the poverty mindset and plan long term. Which is what’s best for the economy long term.
But if the wealthy keep them poor and distracted with day to day survival, they’ll never be able to plan far enough ahead to challenge the current system to benefit the wealthy.
Who’s going to “just give poor people money”? The monkey brain also applies to the people in power. Change will only happen if you can convince those in power that it is in their own self-interest to invest in the poor.
Yeah, every single time I see one of these articles, I’m just like, “Where have you been since 2008?” The “American Dream” has been dead a long time.
It’s literally why “adult” became a thing you do instead of something you are in the 2010s. Because the traditional hallmarks of middle class suburban lifestyle (the house with a white picket fence, 2.5 kids and a dog or cat) have increasingly become an impossible pipe dream for the Millennial and younger generations. When the traditional markers of the transition to adulthood become out of reach for the majority of people, what does adulthood even look like anymore.
There’s a very well researched video that goes over it that I stumbled across one day called the perpetual infantilisation of millennial women. It focuses on Millennial women (obviously), but goes into detail about how “adulting” became a word in the popular lexicon and how increasingly untenable a life like previous generations is for Millennials and Gen Z despite being the most well educated generation in history.
I mean, yeah, that’s intentional…
Everyone complains about inflation, but capitalism needs inflation or else average people save up money which takes it out of circulation.
Our economy would implode without it. Because as companies sell less they raise prices to maintain profits.
The problem is for the last couple decades, we only focus on the regular people and not the billionaires hiding wealth offshore or corporations not paying taxes.
They’re putting all the burden of maintaining this stupid economic system on average people, and we just can’t carry it anymore.
It’s not a long-term plan that works.
I’ve seen you around and I seriously disagree with a lot of your takes but this is so spot on it hurts. Excellent explanation.
Believe it or not, I’m supposed to be really intelligent… To the point I legitimately wish my IQ was lower, I’d be a hell of a lot happier.
It’s just that people reflexively defend “their team” these days. So complaining about an issue and explaining why it’s an issue gets up voted. But mentioning we need more from our politicians (and the parties themselves) gets down votes.
And that obviously doesn’t lead to anything good, but people refuse to plan long-term. Which is literally an effect of stress and poverty. The less resources available, the shorter we plan. Like all this shit makes perfect logical sense, there are reasons shit is like it is. But how the fuck do we beat the reach of billionaires who literally own the media, including social media?
At least on Lemmy it’s small enough people still see negative comments.
This is the kind of comment that the other dude was talking about. “I’m so smart I wish I was dumber” that’s cringe af. Use some of that intelligence to put a bit more empathy in your replies. Communication is about two people.
Even if it were true, telling someone you’re so smart you wish you were dumber says so many things that harm your ability to communicate clearly:
- it’s likely I’m smarter than you
- if you don’t agree with me it’s probably because you don’t understand. This is also supported by your statement that you’re happy people will see your downvoted comments
- It hints that you’re probably not willing to engage with other people’s ideas because you might feel they’re beneath you
- because you don’t see this discussion as being between peers (see the first point) you’re likely to be patronising
Even if you are so smart, and so right about these topics, the way you communicate actively impairs your message. If you read your messages through the eyes of a slightly insecure audience you’ll be able to fix these issues. Empathetic communication means you can say a lot of the same things and have people be receptive to your message instead of put off by your demeanor.
the way you communicate actively impairs your message
…
I look at this when I have a few minutes down time throughout the day.
If you think one person venting on a low traffic social media platform is going to have a substantial effect on anything regardless of how nice they say something…
I dunno man, but I feel like we don’t have to get into a “who’s smarter” argument
Take my silence as a victory, consider it a gift man.
They have nothing they can save. Every penny is vacuumed up.
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