It Was Never Just Vibes
The vibecession is back, or never really went away, or is now a “permacession.” Or so we’re told. But here’s a novel thought: What if it’s not just vibes? For years, economists and commentators have been trying to explain why American consumer sentiment and confidence in the economy have hit record lows while many objective measures of the economy remain solid. This alleged dissonance persisted throughout the Biden era, when the economy was recovering from the Covid pandemic, and has only gotten worse under President Trump. Still, commentators insist that public opinion is divorced from economic reality: Will Stancil, a University of Minnesota researcher and sometime political candidate, wages near-daily battles on Bluesky arguing that the available data belies the idea that the economy is bad, while others argue that the Democratic Party needs to determine why voters feel this way and propose ways to address it. “Democratic strategists loathe vibecession discourse, because positing that the public is factually wrong about what ails the country makes the job of pandering to voters ... much harder, no matter which party is in charge,” Brian Beutler wrote on Substack on Monday.The common takeaway is that voters are mad at price spikes in recent years of everyday goods like gas and groceries, and at the longer-term increase of housing and health care costs. It’s become the “affordability” crisis. But a new report from the Roosevelt Institute points to a simpler yet more profound explanation: Americans no longer feel that they can achieve a good life. Whatever the economy is doing, it isn’t delivering one. “If we are talking about the core goals of economic policy, yes, we want overall growth, but to what end?” said Elizabeth Wilkins, the president and CEO of Roosevelt. “To deliver the building blocks of a good life for people, right? We fundamentally believe that progress should be about people living better lives. So, what does it look like to actually deliver that for people?”The report, released Tuesday, digs deep into how people feel about what they can afford, what they want, and what they think the government should do about it. It’s a more complex picture than is often provided by simple surveys that ask how voters feel about their financial situation or the economy as a whole. Some of the biggest findings are that most voters feel like they have had to make trade-offs to afford what they needed over the past few years, don’t have enough to buy what they need and have a financial cushion left over, and that they would like to be free of debt. Just one in five said they were very secure in their income and confident they’d be able to retire comfortably. Almost 80 percent said they are worried about their finances now or in the future, and 35 percent have stopped putting money into savings in order to make ends meet.This points to two trends others have previously noted. For American households, there is no slack in the economy, and no feeling of security. The one or two breadwinners per household are already working all they can, and the number of people working multiple jobs to make ends meet is rising. The cost of necessities has risen, especially housing, electricity, transportation, and health care premiums, which people can’t easily cut out of their budgets. Sometimes when people pay more for these things it means they’ve moved into a bigger house or are receiving medical care they had put off and therefore improving their lives. But the base price of these necessities has gone up without people feeling like they’re moving up. Paying more for the same amount of goods doesn’t make people feel better, and sometimes people even end up downgrading or downsizing to try to balance their budget. The survey also showed that people feel the current political system is unfair. Confidence in the government is underwater by 41 points, and voters had more confidence in small businesses, their employers, and banks. That’s largely because people think the government is full of self-serving politicians working for billionaires and corporations. In the K-shaped economy—the term used to describe increasing inequality—most of the benefits of a “good” economy go to those at the top. While this trend has been growing for at least three decades, it has hit home in the second Trump term, as obscenely wealthy tech titans like Jeff Bezos, Mark Zuckerburg, and Elon Musk gave up any pretense of caring about inequality and democratic ideals and have cozied up to the administration instead.“People’s expectations are shaped by what’s possible in a world where people can buy their third yacht, and you don’t have the time to spend with your child because of the number of jobs that you have to work, even if those jobs mean that you can buy groceries for the week,” Wilkins said. “We ought to be able to do better by people than the basics when so much is possible based on the resources that we have.
