The chart included in the essay is a very helpful visualization.
The traditional Arthur Okun misery index, which includes inflation and unemployment, didn’t capture broad economic discontent, which is only partially explained by partisan survey responses (i.e. Trump supporters insisting the economy was terrible until the day after Trump won the election). The New Misery Index (NMI) includes perceived inflation, home price in years of work, difficulty of job search, and credit card delinquency rates.
>Most interesting of all, to me, is the strikingly high divergence of the NIM components during the Biden years. Perceived inflation and home prices got worse and then better, while credit card delinquencies and the difficulty of finding a job got better and then worse. We need to take loss-aversion into account here. The things that are going wrong at any given time have a much larger impact on the way people feel than the things that are going right. Throughout the Biden administration, there was always *something* going badly wrong. In the Trump years, the contrast between the good and the bad was not so great, so the memories of pain are not as sharp.
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The chart included in the essay is a very helpful visualization.
The traditional Arthur Okun misery index, which includes inflation and unemployment, didn’t capture broad economic discontent, which is only partially explained by partisan survey responses (i.e. Trump supporters insisting the economy was terrible until the day after Trump won the election). The New Misery Index (NMI) includes perceived inflation, home price in years of work, difficulty of job search, and credit card delinquency rates.
>Most interesting of all, to me, is the strikingly high divergence of the NIM components during the Biden years. Perceived inflation and home prices got worse and then better, while credit card delinquencies and the difficulty of finding a job got better and then worse. We need to take loss-aversion into account here. The things that are going wrong at any given time have a much larger impact on the way people feel than the things that are going right. Throughout the Biden administration, there was always *something* going badly wrong. In the Trump years, the contrast between the good and the bad was not so great, so the memories of pain are not as sharp.