Please excuse my dishevelled appearance (this year has ended on an extraordinary busy note Flux Trends and I was up way past midnight scheming and writing and such - and it shows 😅😂).
Regardless - I hope you’ll find todays signal pair as interesting as I do as an Econs nerd.
The first challenges common sense, the second challenges the challenge. I won’t provide the answers but I will ask some questions that challenge both.
The first signal looks at how young people in the US are *much* (like twice as) more pessimistic about the *general* economy than they are about their own personal financiallives.
That’s a great big counter point to the “things are bad” narrative. Revealed preference says actual people (as opposed to “them”) are actually quite happy and doing ok.
The second signal adds even more complexity. This study shows that “doom spending” - aka spending savings and taking on debt even as those same individuals say they are pessimistic about the macro economy - is on the (very scary and unsustainable) rise.
So what gives?
Are people over confident in themselves? Do we have an excess of agency?
Or are we overly pessimistic about the macro world? - do we have a deficit of general optimism?
And why is there a gap between revealed and stated preference here?
Are we witnessing false self optimism? - or is this more like “eat drink and be merry for tomorrow we die” nihilism in the face of despair?
Or is Gen Z just Janus like - where some see apathy, others press on through the valley with agency.
And what about you? When you see things look bad “out there” - how do you respond? By prentending “this is fine” (like the meme) and spending like there is no tomorrow because you believe there is no tomorrow? Or do you invest in yourself and see opportunity in the chaos?
What deficits do you have? Optimism? Agency? And how can you better align the two with reality?
And do these signals - that action-opinion / agency-optimism gaps scare you? (They sure scare me. That degree of discontent from reality - whether things are really better or worse than we think - are destabilising.)
Let me know.
Read more:
Where do you stand : https://jfsdigital.org/articles-and-essays/2017-2/the-polak-game-or-where-do-you-stand/
Doom spending : https://www.creditkarma.com/about/commentary/forget-doom-scrolling-americans-now-doom-spend-to-cope-with-stress
Out of alignment with reality : https://iop.harvard.edu/youth-poll/46th-edition-fall-2023
Mind the gap