Drive Steven Kopits written in response to Are you better off than you were four years ago?:
I don’t think people are going to compare anything to the pandemic. Trump did not cause the pandemic and, frankly, most of the world has suffered some sort of economic shock. I don’t think that’s how voters will make comparisons.
They will make comparisons with 2019. The figures are mixed.
I’m not so sure… Let’s actually look at the data.
Figure 1: GDP per capita today (blue) and five years ago (tan), both in billions of 2017 SAAR dollars. Source: BEA.
Figure 2: Consumption per capita today (blue), five years ago (tan), in $ SAAR 2017. Source: BEA.
Figure 3: Personal disposable income per capita today (blue), five years ago (tan), in $SAAR 2017. Source: BEA.
Figure 4: Current unemployment rate (blue), four years ago (tan), in percent. The April observation matches the Bloomberg consensus. Source: BLS.
Figure 5: VIX now (blue), five years ago (bronze). Source: CBOE via FRED.
Figure 6: Economic policy uncertainty index (blue), four years ago (tan). Source: Policyuncertainty.com via FRED.
Figure 7: Poverty index now (blue), four years ago (bronze), in%. The unemployment observation in April corresponds to the Bloomberg consensus, inflation comes from the Cleveland Fed nowcast for 04/30/2024. Source: BLS, Cleveland Fed and author’s calculations.
Mr. Kopits also writes:
…it appears that the situation of the median household is not materially better than it was in 2019. Five wasted years.
I believe Mr. Kopits is visually impaired. Below I show the change in real median household income, with the red line now drawn from March 2019while the index stood at 111.6.
Source: Mobility research.
So, to summarize: GDP per capita, consumption, disposable income and median household income are higher than they were five years ago. The unemployment rate is the same. The VIX and economic policy uncertainty (bad things, I would say) were higher five years ago than they are today. The negative point is that the “misery index” is 1.7 points higher than it was five years ago (but it is certain that it is now lower than it was five years ago four years).
Finally, Mr. Kopits demonstrates a remarkable ignorance of terms. He writes:
Moreover, property taxes and home insurance have increased significantly since then, without any corresponding increase in tangible benefits that I can see, at least for most homeowners. On my current homes, my property taxes have increased by 37% since 2019. What are the presumptions on this from a “real world” perspective? Is there a presumption that services have increased as a result, therefore “consumption” has increased? Or is this simply treated as cost inflation?
Real consumption is private consumption of goods and services, in inflation-adjusted terms (figure 2). Disposable income takes into account federal, state, and local taxes (Figure 3).
