On August 7, the Wall Street Journal showed results of a poll on voter discord. The Journal concluded “Voter Discord Isn’t Over Wages“.
The Journal noted that in 2008 and 2009, 80% of those polled cited the economy as the biggest issue facing the country.
In a recent WSJ/NBC poll, the number was down to 27%. Citing wage increases, the Journal concluded “[discord] isn’t really about pocketbooks anymore.”
I challenged that notion in Is Voter Discord Over Jobs and Wages?
There are more visible problems thus more problems for people to choose. Race relations have gone downhill. There have been more shootings.
Social discord is about something, most likely jobs and wages, not racial incidents. Give voters enough choices and many will pick the hot topic of the day.
Proof comes from the popularity of Trump in the US and Brexit in the UK. If voters really believed the economy was improving, Trump would not have won the nomination with his message “Make America Great Again”.
The Journal says “Thanks largely to falling gas prices in recent years, pay increases are well above inflation.”
Really? What about rent? Obamacare? Education? Student debt? Is the CPI remotely accurate? What about benefits? And how many people have to work multiple part-time jobs to make ends meet?
Are voters so angry about so many things they do not even know what to blame?
Pocketbook Theory
Please consider my ending paragraph vs. the ending paragraph of the Wall Street Journal.
- WSJ: For many voters there are very serious and grim issues in this election, but it isn’t really about pocketbooks anymore.
- Mish: People may cite race relations, police attacks, security, etc., but those concerns have their roots in something else: a feeling of slipping economically behind over a decade or longer, as the rich get richer and richer.
Why the Take II?
I bring this up because of two lines buried in today’s report on Productivity and Costs, Second Quarter 2016 by the BLS.
Due to a 4.7-percentage point downward revision to first-quarter hourly compensation, unit labor costs decreased 0.2 percent in the first quarter of 2016, rather than increasing 4.5 percent as reported June 7. Real hourly compensation decreased 0.4 percent after revision, rather than the previously-published increase of 4.2 percent.
Real hourly compensation declined 0.4% instead of rising 4.2% as originally posted!
Bear in mind that is on average, despite big increases in the minimum wage.
The Journal’s statement “Thanks largely to falling gas prices in recent years, pay increases are well above inflation” is pure hogwash.
Real Median Household Income
The above from Doug Short’s report Real Median Household Income Up Slightly in June written July 21.
The median household is worse off now than in 2000 using government estimates of inflation and Sentier Research data.
For a project I am working on, Doug Short produced the following chart of real income growth. Annual data comes out in September so the chart is a bit out of date.
Real Median Household Income Growth Three Ways
- PCE stands for Personal Consumption Expenditures. The PCE deflator measures the percentage change in prices of goods and services purchased by consumers throughout the economy. PCE is the Fed’s favorite measure of inflation. The above chart clearly shows why.
- CPI-U is the official measure of consumer price inflation for urban consumers. Many feel CPI is understated.
- CPI-U-RS is a BLS construct that allegedly attempts to estimate what the measured rate of inflation in the CPI for all urban consumers (CPI-U) would have been over the 1978-98 period had the methods now used been in effect since 1978.
As measured by the Fed’s preferred measure of inflation, households are doing well. As measured by CPI, the median household is no better better off than it was in 1968!
Mike “Mish” Shedlock
Of course the PREVIOUS quarter revisions NEVER make the headlines and everyone cheers the Obama Presidency – while their lives get worse!!
I guess THAT is why they call them SHEEPLE.
Revisions, revisions, REVISIONS!!!!!!!!!! This is why I ignore most government and private financial reports. One must do their own digging to seek truth or the financial stability of a corporation. Currently most reports are just lies and worse financial wizardry.
All allowed to fool the dumb people of the planet with joy, joy, JOY!!!!!!!!!
Mish, as a young pup in the real estate business in the ’70s there was a well respected adage, buyers are liars. I am going to be writing more about this in a LinkedIn series of posts, HiddenOpps Agendas and Clear Intentions. In the meantime, I think on this topic you have moved to the core. Thanks and keep digging. David
Should have read, Hidden Agendas and Clear Intentions!
Mish,
I think that at all levels there is a growing sense of dis-ease with the management if the country and the economy.
Confidence in Congree is at a deep low;
There is outright hatred for Obama and for both candidates;
The Fed has gutted personal savings income, bond income and pension plans at all levels;
Baby boomers have been told for years that there will be no money left for their retirements and now they whistle in the dark hoping for the best;
We have at least seven areas in which our military is involved now, and despite spending more than most if the rest if the world combined on fighting we are apparently incapable of winning a war anywhere, including the wars on poverty and drugs;
In the land of the free we have a huge number if people omprisoned and the prison business keeps growing;
Our vaunted FBI has demonstrated that it is fearless against small individuals and gutless against a Clintin;
Our go Government has given away our trade advantages, didn’t even get a hand ful of beads.
Basically our government is inept at everything except wasting money and opportunity. And then we have our mainstream media that no longer presents news, and has become incapable of distinguishing between truth and propaganda.
Trump is narcissistic and rough as a cob. He brings a businessman’s soul to the party that is trained to look for business opportunity and waste. He is a large barnacle on the ass if the wheels if the status quo and they want him gone. Should the status quo win they will find that there is not enough money, pork, influence, control or prisons to substitute for a shared vision of what it means to be free, honest, hardworking country. The powers that be may be becoming more aware of the national angst, but they cannot afford to face it.
Hatred for Obama? Maybe you need to climb out of your hole and talk to someone other than an old white man. His job approval is 55%. Of course you’re a guy who still believes Romney won the last election and McCain the one before that. How is denying reality working for you?
Cough – rigged – cough.
Billy Walrus – maybe he should have put it another way: if they weren’t blind sheeple, they would hate him. He has done absolutely nothing. Obama was hand-picked. He was the right color, he would give the elite whatever they wanted; in other words, he could be bought. He will go down as the most useless President ever, although he reads a teleprompter well.
Yes, Obama is popular with the 47% who don’t pay any taxes but get lots of money from the government…but not 55% popular.
People on the dole plus people profiting from the government. Yes. This could be 55%. But the hatred the rest of us feel is at a level unseen for any previous president. Yes the hate is real. And when it is this real you would be wise to pay attention. Think of this: when he is gone the hate will go on unabated, because conditions and policies will remain unchanged. Where will the hate be directed then? If not at a person, perhaps a system? Perhaps at those perceived to be running or profiting from the system? Will actions be taken? Or will people act like they did toward the fall of the Soviet Union, and engage in an unofficial slowdown (is this already happening?).
Harold Morley – private prisons are big business. There was even a story of a judge sending people to jail in exchange for money from the prison. War is big business too. Arms dealers, weapons manufacturers, the military-industrial complex. They “purposely” don’t win. I mean, how are you going to pay back your campaign contributors if you don’t have any more war?
They know exactly what they’re doing. This election is all about the elite versus the 90 – 99%. When times are good, the rabble don’t see the looting at the top. But when times are bad and they’re out of work, and they see the elite getting filthy rich and they’re dropping behind, they start to see the inequality.
So, yes, this election is about pocketbooks, but only because America is finally waking up. And they’re only waking up because the elite are looting like crazy while the rest twist. They got too greedy.
From the latest Gordon Long video, I see you’re going to the Grand Canyon north rim. I’ve been to the south rim twice, and the north rim once. I didn’t stay anywhere at the north rim nor did I travel much around it, but after visiting I didn’t feel it had any added value over the south rim and, at least at that time, was more out of the way.
I hope you visited Meteor (Barringer) Crater as part of your south rim visits. Spectacular. I’ve been there twice, too, and on the second visit hiked all the way around it. From what I understand, they no longer allow that although at the time I did it there were no restrictions against it _as far as I knew_ (there were no signs prohibiting it) and no one said a word to me when I got back from the hike. During it, I got a on-site look at Barringer’s drilling equipment left in pcae at the far (southern) end of the crater opposite the museum viewing area.
I’m a meteorite collector and kept my eye out for them although I would NOT have taken anything I found and didn’t expect to find anything anyway since fragments fell much farther away than at the rim. It was mostly metal vapor anywhere near the crater which condensed into tiny beads that have long since been completely oxidized. I’m also aware of the great Harvey Nininger’s efforts in and around the Barringer Crater and his long gone meteorite museum which was nearby. I own and have read his books and was aware in detail about what he had done at that crater even before my first visit.
“but after visiting I didn’t feel it had any added value over the south rim”
I visited it and the south rim always in the spring or fall, so I was never there during the major “tourist season” and that was by design. So, there might be an advantage to the north rim in the tourist season, that being much smaller crowds. I have visited every national park and monument I desire to visit, several multiple times, and I never go during the tourist rush. I saw signs in Yellowstone warning of “heavy traffic area” in beautiful, clear, 70F weather with not a soul around but me.
All the figures have one thing in common… the narrative of the prevailing propaganda.
Voters angry? Shocking!!! Could the unequal application of the Rule of Law have ANYTHING to do with this? HMMMMMM. Bad loans are promoted to families who cant afford their dream homes, then when the carpet is pulled out, families are broken, suicides occur, immeasurable psychological damage is done to fragile families (especially their youth), and the bankers get bailed out. No-one goes to jail after massive fraud is committed, and within 1 year of this catastrophe, massive bonuses are given to bankers and Wall Street, new ‘laws’ are passed which are selectively enforced, investigations of wrong-doing are put off until the statute of limitations makes then useless, “NO ONE BROKE ANY LAWS’ Bullshit is promoted by politicians who receive incredible financial support from these same predators!
Congress EARNED their crappy rating. They stopped working for ‘the people’ long ago (Hey, we can legally engage in insider trading! Isn’t that great!!!)
Hillary is an absolute two faced narcissist who just about everyone feels is evil to the core, is a certifiable Goldman Sachs whore, and is ahead in the election polls! Where is, or better yet, WHAT is the truth anymore???
RULE OF LAW. WITH EQUAL APPLICATION OF SAME! That is where to start.
Oh yeah, almost forgot. Those same families that were left on the curb? Yeah, they are part of the electorate who were stuck with the tab for Wall Street and Mozilla’s (etc.) bacchanalia.
Nice deal if you can get it. That is, if you are OK with selling your souls.
Hillary is a lying crook but we should vote for that other lunatic? Who will do and say anything? Who has no principles whatsoever? Ted Cruz was right about him.
Billy Walrus – Trump is not perfect by any stretch of the imagination, but he is the ONLY one who is going after the elite.
This is what the election is really about – the elite versus the 99%. Read what Mox Nix said above. It’s absolutely disgusting and people have had enough.
The elite are scared sh*tless. They are going after Trump with everything they’ve got, along with their bought-and-paid-for media helpers. Sure, Trump says stupid things. He’s not a polished politician. But we’ve had enough polished politicians who say absolutely nothing and do nothing. Sure, they talk a good game, but they could care less about us. It’s all about getting money from multinational corporations and other monied elite. With Trump at least you know what you’re getting, but with Hillary you don’t. She flip flops all over the place on issues. One minute she’s for the Trans Pacific Partnership, the next she isn’t, then she’s for it – no, no, she’s not again.
If she gets in, there will be more war. She is saber-rattling Russia. She has said she will go after Assad (with Russia already in there helping Assad). Wow, what’s going to happen there? I do not trust her. She is in the back pockets of the elites.
No principles at all, Trump ( 🙂 ) the principles of those who reek of sulfur and have horns in their forehead. And even those guys trump Hillary.
Maybe I’m reading the last graph incorrectly but it seems to me the dips in 1980 and 1990 are roughly in line with the Great Recession dip. Going back to a bit before 1980 I’d say I’m looking at a rather gentle upward trend when you smooth out the dips and peaks.
That would say despite the 2008+ recession, there’s no particular reason to assert all has gone to hell now. In fact one would be optimistic that an upswing looks ready to kick in soon.
Not gonna happen. You need to pay attention to demographics. Developed nations have no longer have population growth. Can’t grow the economy if you don’t have more people.
The chart is household income not total national income.
“The chart is household income”. Yeah, but the looters – I mean the elite – are skewing the numbers.
It’s median not mean household income.
Sssshhh. OK mean = average. Everyone can be poor but the mean could be decent if you get one or two super billionaires in the mix. Median means middle. Line everyone up from lowest household to highest and choose the household right in the middle. You can’t make the mean go up by just increasing the top 1% excessively.
You’re all nascent advocates of Wisdomic-Gracenomics.
wisdomicsblog.com
The WSJ has become part of the propaganda arm of the “Establishment”.
It is that simple. The “Journal of Record” is broken.
Like
They pee in my ear and they tell me it’s raining.
How about comparing what an actual employee costs now versus then, as opposed to just the percentage that makes it into wages? Health insurance, 401k contributions, workers comp insurance, unemployment insurance, etc, etc are all essentially earnings for the employees which don’t show up as wages.
$ 100 in 1968
Has the same buying power as:
$692.64
in 2016
http://www.bls.gov/data/inflation_calculator.htm
That is incredible, being off almost 5% on wages. Might be good for propaganda purposes, with upward revisions trumpeted by pro-Hillary mainstream media and downward revisions ignored. But what does this mean for a “data-driven” FED basing actions (which should be prohibited) on the original data? An economic decision-making model that can never work: 1) garbage in, 2) idiotic garbage interpretations and actions, 3) garbage output, 4) garbage no-growth economy. Get the data-driven FED and political interventions out of the real economy.
The positive: USA.gov dare not close down the Internet, as it is now entrenched as USA.gov’s Propaganda Voice, Orwell’s Big Brother, telling us (public) what to think and believe. I visited Google News today, and everything except the biggest mainstream media outlets was either filtered into the search engine hinterlands or altogether excluded. The economic garbage stream runs parallel to the mainstream media “news” sludge stream.
Top Google News: Trump calls on gun owners to assassinate Hillary Clinton (>90% of stories; Huffington, Washington Post et al.). Now that is indeed big news, when one candidate calls for the other to be assassinated. Of course, Trump must be a lunatic based on the mainstream media news, even if the stories and insinuations are false (Trump was talking about the second amendment, gun laws and 4 supreme court justices for the next prez). Conversely, sympathy votes are due poor Hillary, a hapless female victim of the white-trash males and their Trump-Putin Russian email conspiracy; and now a white male aggressor named Trump threatening her with gun violence. Better listen to Comrade Obama, the best-qualified prez in 21st century USA history, and vote against Brexit and Trump, support Black Lives, white-cop killers, and the Atlantic and Pacific trade agreements. Crazy Trump talk or lunatic “reporting?”
Mish, what do you think of this: http://www.wsj.com/articles/SB10001424127887323468604578249723138161566 ?
Does the chart indicate that we may be in a recession that hasn’t been recorded yet? (2015 TBD) Seems it would be an anomaly if it weren’t.