"Let's say you're moving, for whatever reason, and you own a home. You now need to sell your home and buy a new, comparable place at your destination. Once you've accounted for the costs of the real estate process, you've typically lost a bit of money, but all in all, you're in the same position you were in before: you have a home. If housing prices go up, you aren't any wealthier than you were before, because the price of the house you were selling went up and so did the price of the house you were buying; housing prices going down doesn't make you any less wealthy, for the same reason. And nobody who owns a home wants to sell their house and *not* buy another house to replace it; going from homeownership to renting, or to moving in with family, feels like the first slide down the slippery slope to homelessness."
This is true if you assume that nobody can ever use less housing than they currently do. That's obviously false -- if homes double in price in real terms, but the price ratio between large and small homes stays constant, you can extract real, usable wealth by downsizing your house. You imply that nobody would consider this because it feels like moving backward, but 1) many people downsize their homes, when they retire and for other reasons, and 2) if you make a bunch of money on something but refuse to sell it to realize the gains, that doesn't mean you haven't made money.
Similarly, if you buy a stock, but you have committed in advance to never, ever selling it, then yes, you cannot make money from that stock. Obviously, that would be a foolish committment.
Housing isn't a commodity. You can change how much of it you use, and where, and under what circumstances, and all of that offers a way to benefit from price increases.
"Nobody" is an exaggeration, but certainly most people don't really benefit from rising house prices, fo rthe reason Bob Frank said.
(And of course, there are a lot of people who might want to move into a larger house -- say, to have more children -- and they'd be especially screwed by rising prices.)
Not sure if thats true inside the US or not, but outside the US thats not true.
Anyone who has a mortgage on a short term (2-3-5yr) and where that mortgage is on less than the max LTV (usually 40%) benefits directly from house price inflation when they re-mortgage at the lower rate.
E.g. lets say I buy a £400k house on a 10% deposit. I'm a first time buyer so I get a short term mortgage on that of (say) 3 years and pay 5% interest on that loan (so £18k p.a. in interest).
Now lets roll forward 3 years, and assume the housing market has risen 5% a year. The house is now worth £463k. I've paid a small amount of principal as well, say £12k. Because of the house price increase I am now in possession of a 30% deposit (I require a loan only 70% of the house value). Almost all of that decrease in LTV is provided by the price of the increase in the house. I can now likely get a loan around 3.5% a year and so save £5,400 a year in interest costs on my outstanding loan as its a less risky loan for the bank.
In another 2 years I'll easily be in the 40% deposit range, even with only minimal house price increases and that'll drop again to maybe about 3%. So now I'm saving £7k per year in interest, about £550 per month. Thats a decent amount of money!
OTOH.....if house prices drop.....I can easily get stuck on that 5% interest rate FOREVER, so long as it drops roughly as fast as I am paying off that principal (about 0.5% a year house price drop would do it).
So.... all else being equal.... and assuming you live in a country where short term loans, frequently renewed, are an option... then almost every first time buyer/<10years buyer.... sees an immediate and substantial monetary benefit from higher house prices, and would lose that with lowering house prices.
Thinking some more.... this even extends beyond "early in their homeowning life" buyers, so long as they also have "other debt".
If we roll forward even further.... we're already at 5 years.... If I roll it to 8 years, and the house prices have still been rising I am now a long way past the 40% LTV (where mortgage rates are cheapest). Perhaps the house is now worth 600k and I've paid down to a 275k loan.
Well, now (due to the rising house prices) I have headroom. I can borrow another 85k and still stay at the 40% LTV rate (e.g. 3%).
So, if I want to buy a new car.... even an 85k new car.... I can take out the money against the house the next time I remortgage, and pay 3% on that loan instead of the rate I'd be charged for a loan on a car (say 10%). So thats another 6k per year I can save in interest payments with a little financial engineering. I now get the "new car" 6k per year cheaper than a non-homeowner (or a homeowner who has experienced falling house prices) can.
If I have credit card debt.... I can refinance that at 3% instead of the 15-20% the credit card company charges for the same money, and so on.
So, "rising house prices" far from being something that "rarely helps anybody, except some maybe retiring downsizers" is something that (with a little financial literacy/engineering) can make you richer at every stage of your life, equivalent to an extra 5k-10k a year of income received as reduced interest payments.
I'm not especially culturally literate, but it was pretty clear to me in 1994 at age 13 (though more so later) that the song was absolutely meant to express a zeitgeist that would be immediately recognizable by and sympathetic to most viewers.
I should clarify a bit. The song is referencing a classic Gen X apathy and angst that has a very different feel from the later, more militant Scanlon-era Vibecession vibes.
I was going to say the same, it very much fits in with the nihilistic feel you get in films like Office Space or Fight Club which are now mocked by online commentators.
Many other jokes in Friends revolve around how wealthy everyone is despite having chill jobs.
Joey chilling at the coffee shop until someone says "shouldn't you be at work right now?", nobody knowing what Chandler even does, Monica's legendary rent-controlled apartment that she inherited from her grandma, things like that.
How else can one afford to live in a nice place in New York while working as a chef, or while failing to work as an actor?
The Friends were poor in the same way as the Simpsons family is poor. For the laughs, until a joke requires that they do or have something expensive and they then forget that they are poor, then when it's funny to be poor they become poor once again.
The song still sounds pretty upbeat about it. Almost the opposite of the vibecession. Like yeah things are tough, but I'll get through it because of my friends.
IIRC, there's a bit of an inverse relationship between life vibes and economic vibes among the main characters, especially in the early seasons.
Joey (actor) and Phoebe (musician and masseuse) seem to generally like their jobs when they have them and are fairly happy with their personal lives but are financially struggling and irregularly employed.
Ross (staff paleontologist at a museum) and Chandler (some kind of accountanf or financial analyst) have pretty solid economic vibes but start out with terrible life vibes. Ross is going through an emotionally devastating divorce, and I think I remember Chandler being depicted as not have much of anything going on outside of work early on and being angry about it.
Monica is in between the extremes, starting out in a poorly paid and frustating low-level job (restaurant line cook) in her chosen career (aspiring chef) and having an okay but not great personal life by sitcom standards. The first season or so often has B plots about Monica's job being awful, and then there's a plot arc (a season or two into the show, I think) about her getting fired and struggling to find a new job.
Rachel is explicitly facing a tradeoff between economic and personal vibes at the beginning of the show, where she shows up after leaving an unhappy relationship with a rich fiance and getting financially cut off by her own family and instead moves in with Monica and gets a job as a coffee shop waitress.
Housing costs for the people who are financially struggling are handwaved in the show, for the most part. Monica is illegally subletting an extremely rent-controlled apartment from her grandmother and cutting Rachel in on the low rent, and Chandler is implied to be covering more than an equal share of the rent for the apartment he shares with Joey. I don't remember the explanation, if any was given, for Phoebe's living arrangements except that Rachel is able to move out of Monica's apartment in the first episode because Phoebe is moving out for some reason.
Disagree, especially if you look at the more extreme cases outside the US, as mentioned in China (or in Korea, which isn't mentioned but is worse). Bad economic vibes aren't enough to start talking about "hellworld" or total hopelessness for the future. It's both.
I just mean that the puzzle is reconciling working people’s perception of their economic situation with what the data say about it. That’s what the inquiry is.
Born 1975. IMHO the Friends song wasn't capturing any kind of zeitgeist, at least not anything like the current Vibepression. The theme is that everybody's life has some challenges and some bumps in the road.
"Your job's a joke". Not "there are no jobs", not "capitalism is a joke". Your job.
You're broke. Not "everybody is broke". Not "you'll always be broke". You're broke.
"Your love life's DOA". Not "you'll always be alone". Not "feminism/the patriarchy has destroyed romance". Your love life. (Taken literally, "DOA" is final, but I don't think anybody took the "DOA" status to be permanent.)
"It's like you're always stuck in second gear". At least you're moving! And there is a first gear.
"It hasn't been your day, your week, or even your year". But it might be your year, someday.
Clearly "you" are going through some bad times. But the song doesn't deny "you" of hope.
And you know what?
"I'll be there for you!" "Like I've been there before!" (I'm not still there!) "Cause you're there for me too".
The crappy job, the romance troubles - they're not a reason to give up hope. In the end, you have human connection. You're okay! Things are okay!
Very hard for me to imagine this song catching on if it was new in 2025.
The 90s were famously rife with movies and TV shows where the characters were materially successful but spiritually unfulfilled, leading to plot-motivating crises. Being objectively rich and physically safe/comfortable and somehow still feeling lonely and unhappy is not too bad of a description for the tenor of many of the vibesession complaints, and is also a description of the Fight Club Narrator in 1999, at the peak of human civilization.
A lot of vibesession complaints would still occur with very little modification even if we lived in a Star Trek future with replicators and starships. They are fundamentally complaints about relative status and comparison.
The late 90s and early 90s were pretty different, the early 90s were dominated by the recession of 91 and were seen as a big comedown from the booming 80s.
Also interesting: the material success in these late 90s movies is pretty modest. The Fight Club narrator is 30 and has a small apartment filled with IKEA furniture and a wardrobe filled with department store brands, and this is portrayed as being pretty successful.
That's true. But the Fight Club Narrator specifically wasn't complaining because he was poor, but rather because he had all the "stuff" he wanted and was still miserable.
True -- my point was that if he was a Zoomer instead of an Xer then he'd have all the same stuff and complain he was poor.
Perhaps we were just less greedy back then, or less constantly exposed to stories of 24 year old billionaires and luxury cat influencers. This would cohere with the data point about younger people these days having unrealistically high standards for financial success.
You're once again hand-waving away the (stark) departure of your analysis from the consumer sentiment graph you shared near the top of the original post, which shows consumer sentiment on an upward trajectory between the 2008 financial crisis and the pandemic (just as you might expect).
"Memory can be faulty, but don’t we need something like this to explain the Trump campaign, the Sanders campaign, Chapo Trap House, Red Scare, 4chan, and all the other mid-2010s politicians and media telling us that things were worse than they’d ever been and outrage was the only acceptable response?"
Social media's reward of outrage-bait content fully explains 90% of this. "Vibecession" (even in the broader sense that you've used it) refers to a much more specific *personal economic outlook*. I also think that economic despair (or poor consumer sentiment) is pretty easily separable from the feelings of unfairness that built in the 2010s and were highlighted most prominently in the Sanders campaign. It's one thing to say, "it sucks that only the top few percent are benefiting from improvements in technology & productivity" or "wow a lot of people got screwed but the bankers did just fine" (anger over social contract) and quite another to say, "wow I'm now realizing that I don't think I'll ever personally be able to afford a house in the city I live in" (actual economic despair). [ETA: Ditto for the Trump stuff, most of which was cultural. "Things are worse than they've ever been" can capture a lot.]
True, it kind of stumbles past the obvious. The result of the Great Recession was millions of people lost their savings and nobody went to jail for it. The pandemic set millions of people back by years, then we find out the FDA rigged the vaccine approval timeline for the election and it once again looks like rich/powerful people making commoners suffer while they do just fine. The FBI lied to spy on the president. We finally pull out of Afghanistan to hand it back to the Taliban and realize we haven't won a war in 80 years, but we spend more and more on defense. Everyone can see Biden is too old to do the job and they lie to our face about "cheap fakes" literally a week before pulling him from the race.
And now, somehow, people don't believe any of the Official Statistics that clearly demonstrate they should stop complaining and instead celebrate. I wonder where the trust issue come from?
This explains the multiple, overlapping political movements: Brexit, Tea Party, Occupy Wall Street, Sanders/AOC (before she sold out), Trump. And the rise of conspiracy theories: lots of them turned out to be true, government agencies lost their legitimacy (for good reason), and now many in the public are convinced that if the Other Guy gets into office he's going to rob them outright to pay his friends, but if Their Guy gets in he won't help because he's on the take or the system is rigged (the DOGE flop).
Who's going to feel good about a system that looks like it's designed to screw you over, just because a few lines on graphs go up?
Thanks! See also this article from Prasad with a breakdown of the pressures on the FDA, as well as the many attempts in media to undermine vaccine confidence ahead of approval, because they knew people on the inside who were telling them they were going to hit their pre-specified targets ahead of election day: https://pmc.ncbi.nlm.nih.gov/articles/PMC11368972/
Eric Topol blocked me on Twitter for retweeting Garett Jones on the effect of his well-publicized campaign to prevent the FDA from approving the vaccine earlier (Topol's argument at the time was that Trump was going to be exercising illegitimate political pressure on the FDA to approve it earlier).
So your point is, “people have come to distrust the government, and when polled about the state of the economy they instead expressed the opinion about the system”? But it raises the question, has this distrust grown abruptly, and if so, why? Otherwise if the government has always been distrusted, it can’t explain the rise of the vibecession.
I think that's a fair criticism. But keep a few things in mind:
1) The consumer sentiment survey isn't gospel. Surveys aren't that reliable, and it's possible that there are other, equally valid measures of "the vibes" that show a different trajectory. I don't know what they are, but we ought not weigh this one survey datapoint really heavily out of convenience.
2) Many of the narratives about home prices, generational wealth transfer, people doing worse than their parents, etc. have been endemic on social media and the subject of innumerable think-pieces in big outlets for far longer than 2022. It's hard to quantify this, granted, and it could be that I'm just focusing on one signal in a sea of signals and the overall trend is non-significant. But I could provide you with lots of anecdata that this is true!
3) I don't think the "vibecession" and the "feelings of unfairness" you describe are at all easily separable, and I don't understand why you think they are. For one thing, as some other commenters have pointed out, including one highlighted in this post, some survey data suggests people think they're doing fine personally, but think broader society is what's doing terribly. For another, whether you "can afford" something as ill-defined as "a house" is highly socially determined -- what you really mean is "I can't afford a house that has the characteristics of houses people in my reference class appear to be able to afford," which is a totally reasonable thing to complain about, but not separable from your broader, vaguer feelings about societal fairness.
Thanks for the reply. Just wanted to clarify the final point there: '...whether you "can afford" something as ill-defined as "a house" is highly socially determined...'
I'm not sure if I'm misunderstanding or just disagreeing here. Specifically speaking to the period 2020+, my point is that the cost of housing (buy or rent) seems to completely support the ~bad vibes~. This can be looked at in a pretty objective way without resorting to unanswerables like "what do the words 'house' or 'afford' really mean anyway?" Here I'll just copy/paste my comment from the original post:
'I'm also skeptical about the rent chart and would like to see the source data. I've seen plenty of articles stating that, for example, the average post-pandemic rent increase in the largest US metro areas -- housing half the population and probably significantly more than half of the younger set -- is something like 50% (my rough calculation from https://www.cbsnews.com/news/rent-apartments-cities-near-me-biggest-increases/ ). This has to be inflation-adjusted, but I think if you say "most urban young people saw their rent increase by 50% in 3 years" it takes on a much different flavor than the "this is a New York problem" theory.'
Anecdotally, I for one didn't dramatically revise my expectations of where I hoped to buy a house or what type of house I wanted to buy in the period since 2020; I merely watched the homes in the neighborhoods I had been eyeing rise 50-100% in price, all while the cost of borrowing increased dramatically. Weirdly, I did not see the same growth in my own earnings.
For what it's worth, I downloaded two commonly used measures of rents, the Zillow Observed Rent Index and the residential rent component of the CPI for Urban Consumers. I'll do a post about this on my own blog this week, because the results were interesting. ZORI goes back to 2015, so 2015 to mid-2024 is the period of my analysis. I actually have rental data through 2025, but the income data stops in 2024. I deflated all figures with the CPI-U, but that doesn't affect the relative positions of anything, just makes the analysis a little cleaner. Some takeaways:
1. Rents have risen in real terms by any measure -- by CPI, by ZORI, and also when just restricted to the top 40 or top 10 largest metro areas.
2. Real incomes have risen by a comparable amount over the same period. Real income has actually risen FASTER than the CPI rent measure and the ZORI in the top 40 metros (14% vs. 12% vs. 8%, respectively), but SLOWER than the overall ZORI (22%) and the ZORI for the top 10 metros (15%).
3. To my surprise, as I just said, rents actually rose SLOWER in the top 40 and top 10 metros than in the overall sample. But the top 10 rose faster than the top 40. I looked at the correlation between city size rank (not actual size, notably) and overall price increase. In the whole dataset, R squared is 0.51, with smaller cities seeing less increase. However, I noticed there appeared to be no relationship above rank 200 or so. Sure enough, restricting to the top 200 the R squared is exactly zero. For reference, the 200th largest metro area in the sample is Macon, GA, population 234,000.
So overall I'd say this data doesn't particularly support the idea of a huge rent increase in the big cities in the recent past. And to the extent that it increases, it's mostly or entirely offset by higher wages.
I'm not aware of any reason to doubt this data in particular. Happy to show you the graphs and specific data!
I'm finding it hard to explain the difference in conclusions. Some possibilities:
1. The difference is in those last 10 metro areas. (You looked at top 40; they looked at top 50.)
2. The "cooling off" of rent increases (and "catching up" of wages) was so stark in the first half of 2024 that the wage & rent gaps completely reversed themselves.
3. You made a mistake.
4. They made a mistake.
#1 seems unlikely to me; #2 seems very unlikely (those gaps are sizeable in your analysis, and even bigger in Zillow's). But I don't feel qualified to judge and am hoping you address it in the blog post! If I'm feeling super ambitious and still unconvinced I might take a crack at it myself.
Thanks for the pushback, it's interesting and helpful!
What follows is probably too long and detailed for a comment. The summary is that I think the different results come from different methods, and while I'd argue my methods are better, that's open to interpretation. In any case, I think the exercise should reduce your confidence that rents are definitely going up a lot vis-a-vis wages.
--
I don't think a mistake is the explanation. I was able to reproduce their figures using the sources they cite. I don't think my analysis is erroneous. All I did was some averaging, and it's pretty easy to spot-check by just dividing the price or income figure of choice in 2024 by the same in whatever base year you want.
I'll write in more detail in any subsequent post, but after brief review I'd say the differences come from different analytic choices. Consider:
1. Different starting years. I graphed everything I looked at continuously from 2015 to 2024, but focused on comparing those two years. I didn't choose 2015 arbitrarily, but rather because that's when the Zillow data starts. The article you linked either looked at 2019 to 2023 or just the single-year comparison of 2022 to 2023. Also, they switch between those two comparisons a few times in the article without explanation, which is generally a bad thing.
2. Different income measures. There are many reasonable national and regional income measures. They chose to look at the BLS measure "Average Hourly Earnings of All Employees: Total Private", whereas I looked at the Census Bureau's "Median Personal Income" from the CPS. The two measures give pretty similar growth rates between 2019 and 2023, but if you use my years of 2015 and 2024, the differences are large. The BLS figure rose 39% over that period while the CPS one rose 49%, compared with a 60% rise for the national ZORI over the same period, and a 46% rise for NYC (all these are nominal figures). So in the NYC case, the measure you choose may be the difference between it outpacing income and not doing so.
I'd again argue that their income measure is worse for this purpose. First because it's a mean, not a median. To me, it doesn't make sense to compare median rent with mean earnings, and means are usually worse for this analysis regardless. Second, it's data collected from employers, not employees, so for many people it won't be reflective of their total income (e.g. self-employed people, people with multiple jobs).
> I’m suspicious of including “housing (construction)” on this list - couldn’t you use the same argument to reclassify any manufactured good as a service good?
It's my vague understanding that, as an empirically observed fact (at least today, I don't know how far back it goes), things that are made in factories and then shipped elsewhere generally exhibit falling cost curves over time, while things that are made onsite at the location where they're demanded generally do not. I don't know anything about why this is the case, but (assuming I'm not completely misinformed about this) it seems like a good sign that it's correct not to equate these two categories.
Brian Potter ("Construction Physics" on Substack) recently published his first book and I just finished it the other day. Highly recommended, I learned many interesting and thought-provoking things.
Turns out that the investigating and researching and writing of that book, were sparked directly by Potter's personal involvement in trying to make housing construction gain efficiency the way so many other forms of manufacturing have.
"Seven years ago, I joined a well-funded, high-profile construction startup called Katerra. At the time I was a structural engineer with about ten years of experience, and over the course of my career I had become increasingly disillusioned with the inefficient state of the construction industry....
Productivity statistics told much the same story: unlike productivity in other industries, like manufacturing or agriculture, construction productivity has been flat or declining for decades, and it’s only getting more expensive to build homes, apartments, and other buildings over time.
Kinda. In Build Baby Build, Bryan Caplan argues that government regulations, not just supply and demand, are the primary reason for high housing costs, especially in desirable areas, and that the benefits of deregulation would be to halve average housing prices, reduce inequality, increase social mobility, promote economic growth, create construction jobs, decrease homelessness, increase birth rates, help the environment, and cut crime.
Traffic congestion can be managed by pricing mechanisms (e.g., charging for parking and driving) rather than by restricting housing supply.
Besides all of the other factors folks have noted, housing does remain a very labor-intensive form of “manufacturing”, so it does indeed have more characteristics of the service businesses than does most of the rest of manufacturing.
Only if and when a very significant percentage of housing were pre-fab homes would that be likely to change any time soon.
Even if Baumol cost disease refers to *manufactured* vs. *service* goods, for rich countries the real distinction that should matter is *tradeable* vs *non-tradeable* goods and services. (Meaning: Tradeable across countries).
This is because international commerce will make the price of tradeable goods and services fall to the world average cost. For rich countries, this means they will get cheaper. In the past, basically no service was "tradeable", but the rise of things like telemedicine is changing that.
On the other hand, the price of *non tradeable* goods will differ across countries, becoming more expensive on the richer countries. Usually this means services (think of a barber), but it also means housing (because of location, location, location...).
I would expect that the manufacturing industries with external competition would become more efficient because otherwise they go out of business. See steel in the US and the big-3 auto companies.
The US health care industry is still (mostly) shielded from competing with foreign health care. Same for the US K-12 education industry.
A good counter-example that supports your point is that SpaceX started competing with ULA/Lockheed/Boeing even for US contracts (e.g. DoD and NRO launches) that were not going to go to foreign launch providers such as Ariane.
I wonder how many domestically produced and consumed goods have seen manufacturing productivity gains without an external competitor?
To put it bluntly, housing, at least in US, is first and foremost services for segregation from badly behaved people ('good schools' etc.) The physical house could be built cheaper, but good neighbors can't, and the culture has very little stomach for enforcing high standards of public order and decorum demanded by young parents (singles care much less) precisely on the kinds of people who need such enforcement the most, so housing price is the only thing left to balance supply and demand. It sucks for everybody, including those same vibecession singles who can perhaps afford their urban rents but know they can't hope to buy a house in a 'good school district' for a decade, but nobody has yet figured out how to unpick the mess. Because real causes are so politically radioactive, people usually bark up wrong trees (e.g. the various factions of yimbys) or just shut up and do whatever it takes to pay their way in, or give up and enjoy single city life.
That's not really relevant to the specific point being discussed in this subthread, which is specifically about the role of construction costs in affordability.
How do we know that? They could be smaller than land value costs but still big enough to matter. (This is certainly true of, e.g., grocery and energy prices.)
By deduction and observation. There is plenty of dirt cheap housing in US where no-one wants to live, either because it's too far from existing concentrations of productive capital, or because it is unsafe. Unlike grocery and energy, which are normal fungible goods, housing _in desirable locations_ is a positional good almost by definition. Density cannot increase indefinitely while retaining desirability, and nobody has figured out how to create new desirable locations from scratch. In this state of affairs, any potential savings from lower construction costs per square foot will be offset by higher 'land value costs' (if such a split even makes sense) or by an increase in the required amount of construction (more square footage, more granite countertops, etc.) I.e. construction costs are partly endogenous, as they depend not only on technology or productivity, but also on what is demanded by law or regulation to build a salable house in a locality, and law and regulation can be changed to protect existing homeowners' investments. This means that the split of the single price people pay for a house into components is artificial, unless perhaps we're talking about real estate developers buying whole tracts of land and converting it to housing. Very very few people in US buy land and structure separately, or buy land and build a house on it (the latter is common in Japan btw).
I don't your theory of housing as a social separator explains the vibecession. You're saying that the problem of separating out desirable and undesirable people has somehow gotten more acute over the last several years? Hasn't this been a central concern of all human societies since the dawn of time? If anything, we're much less class-conscious in America than at any time in the last few hundred years.
And that lack of class consciousness is, arguably, part of the problem. Someone who lacks "smoke consciousness" might be in big trouble if there's a fire.
I am not out to explain the vibecession with this model. But any discussion of housing in America that ignores the considerations that go into it is in my opinion going to be at best unproductive.
By and large manufactured homes have been banned from most places that people want to live. So you are forced to build with low-productivity techniques. And in many cases (for example with elevators), labor rules specifically require especially low-productivity techniques.
With tradable goods, competition causes manufacturing to move to places that don't have such oppressive regulation, but in the case of housing the ban on manufactured homes prevents this.
Today I achieved a rare window into a sense of enjoyment and high morale. I situated myself as a culturally Anglo Canadian in the sense of belonging to the group as a worthy tribe come hell or high water. Although the culture is extensively disparaged I experienced a sense of security in that I believe it is good and worth being a part of even if it fails or fades. I felt like treating other people like I might be going with them to the trenches in the war. This sense of morale and comraderie also revived my fellow feeling for non-Anglo Canadians, due to the confidence that our shared Anglo-shaded culture can be strong enough and attractive enough to bring us together as a cohesive national-tribal entity with a shared mission and belief in our joint legitimacy.
> Question for Aristides and others: why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.
> One question is whether you, a person living in the actually existing United States of America, should either own a home or have a clear aspiration to become a homeowner. And here I think the answer for most people is pretty clearly yes. Now, of course, if you don’t have the means or the opportunity, then you don’t have the means or the opportunity. But if you *do* have good credit history and enough savings to make a downpayment, then buying a house is generally the smart move. This is in part because of the home mortgage interest tax deduction. But the bigger deal, in my view, is that you can get a government subsidized loan to purchase owner occupied housing and turn your modest savings into the seed of a larger leveraged investment. There is no equivalent to Fannie Mae for buying a diversified portfolio of stocks. So even though the diversified portfolio of stocks would be a better investment all else being equal, the availability of a loan on generous terms is a big advantage to buying a house.
> Another issue is that owner occupied housing gets very favorable treatment for the purposes of capital gains taxation, so after tax investment gains in owner occupied housing are larger than they appear at first glance.
He goes on to explain that these laws and programs exist because of the widespread ideological belief that mass homeownership is a positive good in and of itself. In the rest of the post, he argues that in fact it is not, and I agree. In Georgetopia, probably most single-family homes would be rented, perhaps with 30-year leases since families do value stability.
As to why owner-occupied apartments (i.e., condominiums) aren't more popular, I don't know, but my guess would be that dealing with the homeowner's association that has to exist in order to solve collective-action problems is just a huge pain in the ass and most people would rather not.
As a Millennial who is still renting, I would keep renting forever rather than buying something with a shared wall (or an HOA). If I buy property, then it's my property, not community property. (I grew up in a house in the suburbs, so committing to anything less than that is a failure.)
I was a homeowner for years and operated from the same determination that you have. Raised my first child that way etc, because that was how I was raised and it was just obvious that anything short of it would be a step backwards.
Then unexpectedly, almost randomly to be honest, when approaching 50 I stumbled into living in a townhouse which is part of an HOA. Had no expectations good or bad because hadn't done it before nor had any of my closest friends nor my spouse, and we didn't start out thinking of it as anything permanent.
Anyway it's turned out to be great. Years later we're in the same townhouse and still love it and are raising a child in it, and neither my wife or I would go back to single-home owning unless under duress. TBH we'd probably rent before we'd do that, but the overall thing is that all things considered we like this way more than either of those two options. Which was a total surprise for both of us.
None of which is to say that you or anyone else has to come to the same conclusion. More just that (a) YMMV, always; and (b) sometimes what seems obvious in one stage of life, can turn out very differently during another if we let it.
Do you have any concerns about increasing rent over the years? One thing about a U.S. mortgage is that the monthly payment stays the same. Obviously you have all the maintenance expenses; I understand that. But still, the predictable mortgage payment and the tax-deductible nature of the payment weigh heavily in favor of ownership.
Well....and without quizzing my wife since she's not home at the moment....
-- for us the townhouse, even a small older one like this, has turned out to be the right amount of house. And a decent-sized patio having a nice shade tree is perfect: a pleasant outdoor space to relax in or have a small dinner group on, without any of the obligations/effort of a big deck or backyard. And the townhouses layout includes large-yard-sized greenspaces just steps away to play with kids in, throw a ball for the dog, etc.
-- the HOA handles all snow removal (a biggie where we live), fall leaf clearing from our patios if individually desired, maintenance of our patio fences and all the sidewalks, etc. And since doing those services in bulk they use professional contractors with proper equipment, meaning the snow removal and repairs and whatever are done better and much cheaper per household than I ever could as a SFH owner.
-- homeowners insurance is way cheaper, and from year to year doesn’t increase even as much as general inflation (I assume because the HOA is responsible for the roof, major plumbing and other structural stuff which from an insurers’ perspective is the big-ticket claim risks). During my few years as a renter I paid nearly as much for renters’ insurance as our current homeowners insurance costs.
-- the HOA handles all landscaping, including a community garden which any member can participate in, etc, unless a given unit owner wishes to take charge of the smallish greenspace directly in front of most units. Somewhere around half of our association’s members do that, and my sister (a serious lifelong gardener) happily does it in the smaller HOA that she’s a part of. There is however no _obligation_, meaning if you’re not into that the greenspaces immediate to your home will still be pleasant. This includes in particular shade trees which people get very worked up about whether or not they personally have the inclination/time/skills to maintain them.
-- part of what HOA dues pay for is insurances covering the entire association: major repairs, general liability, etc. Since those policies are purchased in bulk so to speak, it's costing us individually (when you do the arithmetic from the HOA’s annual budget funded by the dues) much less than the marginal reductIon in our individual insurance costs.
-- the above arrangement also removes, for us, the threat of slip-and-fall type stuff in front of our home. Such instances are very rare but when they occur it’s the HOA’s problem, they hire the lawyers to fight it and etc. Same with anything like a city water main bursting and doing local damage: it’s the HOA’s headache and expense to deal with, full stop.
-- roofs and gutters, oh boy....every veteran homeowner knows what a huge headache they end up being. Repairing them, cleaning them, occasionally having to replace them ($$$). That’s all on the HOA and if the association is sensible they are building capital-reserve replenishment into the monthly dues so that special assessments don’t have to be used. (Our members loath special assessments and won’t vote in any board member who doesn’t feel that way about this issue.)
-- the same point about cost efficiency applies: the HOA when the time comes for one of structures (‘clusters”), replaces an entire roof covering two dozen homes. Did I mention that replacing a roof suck$?? Also since the HOA is a regulated entity with steady cash flow it doesn’t fall into short-sighted ideas like trying to milk a roof past its warranty (my wife, from her time as a young homeowner with her first husband, has some cautionary tales to tell).
-- though I grew up with having an attic and previously was a homeowner with one, I’ve found that not having one has greatly improved my habits in terms of defaulting to retaining old stuff just because there’s an easy place to stick it. (Put another way, in hindsight I realize that a silly fraction of SFH mortgage payments was paying to store a lot of old stuff that was going to end up being dumpstered after my funeral.) YMMV on this point of course, e.g. my wife for a while considered it an annoying drawback. But as we get older she is coming around to my view of it.
I owned a townhouse in Boulder for 13 years and liked it a lot, but I don't have kids. The main advantages were amenities (workout room, pool) and never having to mow the grass or shovel snow. Also, my back patio opened up on to a nice park.
Buying an apartment can be bad as somewhere you want to live.
If an elevator fails, the roof fails or something happens to the building, then as a unit owner you are liable to a percentage of the costs. The exact costs and contractor are out of your control. The management org can place liens on your unit. They can choose the worst contractor, the one with the biggest kickback, their relatives or a combination of the above.
you are supposed to have a multi-year ‘sinking fund’ and insurance to cover stuff. People may vote to eliminate or reduce them in order to reduce their dues. The management org may mismanage or embezzle funds.
The above can be combatted by auditors, additional insurance and the courts, though the process takes your time and money.
You could also end up with creepy neighbours or their friends hanging out in the lobby or elevator, and units being illegally sublet to become crack dens or airbnb lettings with lots of strangers coming and going.
or you could buy a house without a HOA that you own and control fully
As an investment you can buy many apartments or an entire building to even out the risks, and you don't have to actually live there
If you are renting an apartment then you are not liable for building stuff, can just move out and don’t have to convince someone else to buy the apartment from you and take the risks on
Any explanation for this will be US-specific. I'm British and don't have this association. We have lots of rented houses over here, and lots of owned flats/apartments (including very high-end ones, >£1 million).
In large towns/cities it's common for prospective homeowners to start by buying a small flat and then upgrade to a house after a few years (we did this) rather than try to jump straight to the house.
I was also surprised (as a fellow Brit) of the US assumption that in any unit that had a shared wall, that must inevitably mean a HOA type arrangement as well.
Almost all British houses have a shared wall, semi-detached (which have 1) and terraced houses (which have 2) are very common.... fully detached (with 0) less so.
I've never heard of one that had a US HOA arrangement. Its just a shared wall. Why would you need a HOA (which I can perhaps understands for apartment buildings)?
I guess there are laws and such governing what you can and can't do to it in the UK (party wall rules).... but after living in my own semi home for 10 years, and in my parents semi for 20 years, I've never seen anyone have recourse to them. Its just treated like any other wall for 99.99% of all household maintenance/decoration activities.
I'd no idea why a HOA would be mandatory.... any more than it'd seem to be mandatory for having a shared fence/wall in the garden between 2 properties which presumably even fully detached US houses have.
The American HOA system seems quite arbitary to me, and I think to any other non-US based posters.... again, with the possible exception of apartments in a block where there are lots of shared areas critical to accessing your apartment (lobbies/elevators/stairs/corridors/gardens etc).
All true, ownership is artificially encouraged by US policy. But the question Scott has is why ownership in the US is so highly correlated with detached homes. The mortgage interest deduction is available to townhome and condo owners as well. You suggest it's because of the inherent challenges of the shared parts of a condominium/townhome, but I'm not sure that's it. Those forms of ownership are a lot more common in other countries (Europe). It could be a cultural difference, but a regulatory regime difference would also make sense of that pattern.
I assume the explanation of the correlation is that there are bigger economies of scale for ownership of units in the same building than there are for ownership of separate homes. Some percentage of rental owners are big institutions, and they will be disproportionately concentrated in big apartment buildings, and that will lead to a correlation, even if not one as strong as the observed one.
I agree. I searched "scale" to see if anyone made this point. efficiency in housing service provision would be entirely in cases with lots of similar units close together. Without that theres much less reason for owner and occupant to be different. US mortgage policy mostly removes the liquidity constraint, remaining use case for renting a house is short timeline (college student for example). If you are long term renting a single family home, it seems like a market failure unless you have something idiosyncratic going on.
The fuckery you linked to--which I agree is bad--is at the BLS, while GDP is calculated by the BEA. As far as I know there isn't a similar charge to be levied at the BEA.
Its also extremely hard to fake US GDP estimates. There are tons of inputs, the bulk of which come from data easily accessible outside of government sources. Other institutions (banks, think tanks, etc) frequently do release competing estimates on the same data, although these generally come pretty close to the "official" BEA analysis. So if the BEA were forced into making some ludicrous change to its methodology clearly tilting the scales in favor of claiming an outlandish amount of growth, it would A) certainly make the news and B) not be an actual problem, other than being embarrassing. People would just elevate some other non-Government institution as the new standard bearer for GDP estimates
> there was a sudden turn from the early 2000s world where everyone loved technology and thought that the information superhighway was the utopian world of the cyber-future, to the late 2000s world where everyone hated techno-fascist tech-bro techno-oligarchs using The Algorithm to addict our children.
Not the same timeline, but the core reason to like Silicon Valley companies (cool new tech) faded into oblivion after the iPhone. None of the new stuff is ever anything important: Apple Watch, iPads, VR headsets (which should have been awesome?), Steam, Nintendo Switch, 5G, and all the redundant social media sites.
Compare that to the extremely useful stuff we got before: Google Maps, videos on demand, Wikipedia, flat screen monitors/TVs, wifi, MP3s, and texting.
This is a good point. I feel like people get jaded even by amazing technology quickly though. It's just been a couple of years since we invented the magical computer program that can hold up a conversation and answer questions on any possible subject, which is something which we would have found absolutely fucking amazing in 1999. But everybody played with it for a few days, then immediately got bored and started calling it slop. How did we get so jaded so quickly?
I'm thinking that it's less about the technology and more about the intra-elite competition that has made journalists extremely cranky about Silicon Valley.
>the magical computer program that can hold up a conversation and answer questions on any possible subject
Which, of course, only exacerbated the vibecession. If the program really is so magical, won't it take your job in a couple of years? A rare concern relevant both to journos and normies.
> But everybody played with it for a few days, then immediately got bored and started calling it slop. How did we get so jaded so quickly?
Did we? My happily retired dad will occasionally send me an essay on some point he wishes to argue written by chatGPT. I work in a tech company, our engineers are using AI tools.
I think what happened is:
- When it comes to AI Art. Most played for it for a few days then got bored because to them making art literally was a toy. And a small motivated group drove the slop narrative hard because it threatened their jobs. This includes journalists.
- When it comes to using AI productively. Having it write you an email or summarise one isn't sexy so it didn't drive any discourse positive or negative.
Nitpick: GPT and its like are not primarily computer programs. They are evolved or trained, not programmed. You can't write them down in a form that a human programmer could understand and repeat with pen and paper. One test is that you can debug a program when it produces an incorrect output, but you can't debug GPT when it hallucinates. You're in a position much closer to neurophysiologists with their patch clamps and optical neural probes and fMRI.
(I know this is beside the point of your argument, but it's a pet peeve. Sorry)
Just for your amusement: Shortly before I retired, I had a couple of conversations with my manager where
a) He was queasy about fudge factors in some of the equations we used
b) He was favorable towards AI
yet AI can be viewed as "fudge factors" by the gigabyte... :-)
( Not that I'm hostile towards it - Even with current hallucination rates, I find ChatGPT and Claude and Gemini quite useful, albeit mostly in hobby and online conversation contexts. )
You answered your own question. "But everybody played with it for a few days, then immediately got bored"
If 2025 LLMs were genuinely useful or entertaining to most people, this part wouldn't have happened. You'll be able to watch the monthly usage count grow from smartwatch numbers to smartphone numbers as this changes.
> [...] I literally heard it from NYT reporters at the time. There was a top-down decision that tech could not be covered positively, even when there was a true, newsworthy and positive story. I'd never heard anything like it.
You know how factory farming treats animals poorly, but people just ignore it because they love meat so much? Few would have cared what the NYT rants about if VR had been amazing starting in 2016, self-driving cars went big by 2020 like Google had predicted, etc.
Again, as I noted on the original post's comments, there's a difference: in the 00s, the "writing class" - ie. the professions where you get money for speculating on topics like "vibecession", or at least have some idle time where you need to look busy on the computer that you can use for poasting on the Internet - saw technological development as a boon that will only displace the blue-collars and thus drive consumer prices down, whereas now the development of AI means the writing class sees its own jobs as acutely threatened.
True. But it happened before the recent AI scare. I feel musk and Peter Thiel and other right wing tech leaders changed the narrative. What was once liberating was now capitalist hegemony. And capitalism becomes more more unpopular post 2008.
Besides that the crypto fad soured people, myself included. If all that’s left of technological innovation is snake oil then it’s not going to be as popular as an iPhone. And *even there* sentiment has changed on phones, what was once liberating is now intrusive and along with social media - is seen as destructive.
I'd say that even before the recent events (say, from ChatGPT 3.5 on) there was a general *feeling* that AI development might eventually lead to problems for creatives. Sure, for a long time that feeling was easy to answer with "ah, no, look at Google Translate, no dice", but the undercurrent was there. Then things started feeling more and more real after November 2022.
When the iPhone came out, humanity launched about a hundred objects into space a year. Today its about 3000 a year.
Cool new tech hasn't faded anywhere. Space, self driving, electric cars, drones, robotics. There's tons of cool stuff. Though the fact you don't see it may be an point of data in favour of the "it was the NYT" argument.
> Space, self driving, electric cars, drones, robotics
Lol yeah why aren't ordinary people rushing to buy trips to space, their own waymo, overpriced electric cars, useless drones, and robotic arm toys. Must be the NYT at it again.
No doubt there is a "lowest hanging fruit already picked" factor. When I ask myself what technology I could even conceivably want, (that aren't immortality or AGI), none of them seem as significant as what I have now.
For the record, VR IS awesome. But you have to know how to get the best experience, which isn't trivial.
> none of them seem as significant as what I have now
I think hypothetically, drone delivery would be. Removing some huge percent of cars from a city's traffic would have been amazing and measurable, and creating just-in-time grocery shopping options would have reduced food waste a big percent too.
But like fusion energy, we're probably not going to get it until after AGI, and only if we survive every single AI "great filter"...
>creating just-in-time grocery shopping options would have reduced food waste a big percent too.
This might be a US only thing too. Outside the US we already have just-in-time grocery shopping. Its just called "the corner shop" and everywhere I've lived (in the UK and a little elsewhere in the EU) its about a 2 minute walk from your house.
Currently I have two within that "very quick walk" range and I live in suburbia. 1 a "NY bodega" like shop, and another a full mini-mart. I've never lived anywhere the "corner shop" was more than a 4-5m walk away.
Drone delivery isn't going to make this particular difference outside the US except for extremely rural people (i.e. rural people who live outside the local village).
I don't know how you can claim my viewpoint is too US centric, and then immediately claim to speak for all of "Outside the US" after living in a few European suburbia. Shouldn't you have immediately recognized the irony? I don't understand.
Well, I can't defeinitively and conclusively speak for everywhere.... but the only place I am aware it definitely is NOT the case is the US. I am fairly well travelled, and "local shops" interspersed in residential areas sems pretty ubiquitous outside the US. The US very definitely appears to be the outlier here which is what I noted.
Are we not allowed to note phenomena that appear to be confined to the US *unless* we definitively rule out its occurence in all of the remaining 190+ countries first? Seems like an isolated demand for rigour.
Buddy, just look up the info you're looking for online before making your argument. It would be faster than trying to warp your own personal experiences into some kind of universal experience while being 100x more likely to be true.
You're also apparently under the impression anyone would believe a random internet poster's life experiences or authority on a topic.
Too late to contribute to the original discussion, but I wonder how much of this is downstream of the increasing ubiquity of debt?
Just squinting at some student loan numbers, it seems like during the time of the mid-2010, average student loan debt roughly tripled. This seems to match up with the rise of the vibecession.
I'm having a weird life, and have basically never carried debt, and my personal vibes have always been great. I've also been able to make some crazy life moves that have been personally and professionally fulfilling that I don't think I'd have been comfortable risking if I had massive debt hanging over my head.
I can see path where debt locks you into a path where you have to earn to repay the debt (meaning you might take a job you hate) but you don't get the same benefit future generations got from this trade-off (they chose the bad job they hated instead of a job they would have loved, because the bad job was compensated better.) Previous generations got to make the choice, current ones don't and don't get to keep the extra money.
I can even see the debt being self reinforcing; because your income goes to pay back the student loans, you can't build up the nest egg to pay cash for a car, so you get a high car loan. Now you're paying both off, and can't build for a mortgage down payment.
Love the idea and a brief glance at the data tells an opposing story.
Broadly, the Federal Reserve tracks "Household Debt Service Payments as a Percent of Disposable Personal Income" (1) over a 45 year period and we're currently in a normal range.
Specifically, from the US Treasury Department (2) graph 3.1.5, it looks like non-mortgage debt has 4 factors: Student Loans, Auto Loans, Credit Card Loans, and Other. It looks like Student Loans and Auto Loans have been growing rapidly while Credit Card debt and Other debt have remained constant. Since it looks like those numbers are nominal, that would equate to credit card debt and other debt declining in real terms.
Again, though, I'd defer to someone with more experience in this stuff.
I haven't verified this, but I also recall having seen several articles stating that the real cost of attending college has gone down in the last 10 years or so. Not crazy to assume that college debt would share a similar pattern.
I've also been debt-free and have accumulated a significant financial cushion, but I've also spent all of 2025 unemployed, applying for lots of jobs (even entry-level ones) and never receiving a single offer. It sucks.
I became a landlord as I had to move for work. The management agency that I used raises the rent each year by inflation, but rental prices have gone up way above that. I choose not to evict the old lady with a cat that I have been renting to, as i make a profit and she has paid on time reliably for the past few years. My country has strong anti-eviction laws. If I forced her out and let out my property again at the market rates, it would cost me money. Then I could get tweakers as my next tenants who destroy everything, turn my house into a crack den / meth lab and are near impossible to evict. The risk isn't worth it for me and the old lady is friendly, so I would feel mean forcing her out.
Re: house prices and dual incomes
House and rental prices in non rent controlled areas are often set by what people are willing or able to pay. In the countries where I have lived, supply has been constrained by planning law. When buying, this is often how much a mortgage lender will lend you based on your family’s salary. It follows that if your family has a second salary due to your wife working, then you (and everyone else with a working partner that has that second salary) can use it to bid up the prices of houses that you want to live in.
As rental costs are also linked to buy to let mortgage interest and the returns that you can get by investing in a rental property compared to a savings account or investing in the stock market, then higher purchase prices for houses will also have some influence on higher rental prices.
Also - If rental property income cant beat selling the property and depositing the money in a low risk savings account or similar, landlords will sell up, supply will decrease and there will be further upward pressure on rents.
Planning law does not grow on trees. Homeowners in some form lobby for it to protect their life investments for much the same reasons you keep your old lady renter.
I would love to be able to knock my house down and build whatever I could on the land and have never had any attachment to it. It has no architectural value. Strangely people seem to be attached to particular houses or neighbourhoods.
Where I live now you can freely knock your house down and build a 20 storey ‘tube house’ pay by hour love hotel where it stands with practically zero building regulations or code. Rent is about 1/20th of the cost of where my house is, but land costs much more.
Another note on sticky housing prices, maybe by American standards it would be fair to say basically all of Europe has rent control in some way? Rental contracts are unlimited (not yearly leases where you can raise the price however you want), you can't really raise the rent much more than inflation, and it's really hard to get rid of tenants unless they do something wrong.
I hear that it's really hard to get rid of tenants even if they do something wrong if they're refugees or any kind of 'underrepresented minority'. What if someone thinks police are racist? Can't risk that.
“Finally, we really aren’t in one right now, as the economic data has deteriorated meaningfully and the negative sentiment is warranted at this point.” —Scanlon
This comment is pretty laughable, considering the most recent quarterly numbers.
When I read the first part, I thought Scanlon was going to say “because the economy is actually stronger now”. But I guess leftists are gonna leftist.
The irony of the person who coined “vibecession” basing her claim that we are no longer in a vibecession on negative vibes is not unnoticed.
In aggregate the GDP is up and large companies are doing well. Small companies are definitely not doing as well, at least since after tariffs. Also , companies oriented towards lower-income consumers are not great either*. But the aggregates indicate that yes, we are doing okay.
I, personally feel the vibecesssion. For me the vibes come from perpetual uncertainty, perceptions of current and future instability, and the widespread recognition of the possibility of wider instability, especially going forwards.
The increased risk perception increases my mental model of my financial risk, thereby making me feel poorer. It's like all my assets and investments have a built in depreciation factor due to tail risks. And my future revenue has a larger discount factor, so I feel poorer today ( net present value calculations )
Do you not feel like the vibes are off? Unbothered by poor governance? Does that impact your assessment of your savings today?
I identify as center politically, but am concerned by national and global political trends.
I was not commenting about the reality of the vibecession either way, to be clear.
I was solely commenting - as Scott himself did - that Scanlon claiming the vibecession is no longer a thing because the economy is now worse than it was is flat out false.
My only comment to you is that there is little doubt that the media you consume feed your instability concerns because they believe that it is in their own interest to do so. Which is very different from saying your concerns are wholly illegitimate.
[FWIW, I’m personally very concerned about many many national and global governance issues. But I’d guess my overlap with Scott’s concerns would be only about 50%.]
Your comment that “leftists are going to leftist” reminds me that Trump is in power in the US. This in turn is explained by the partisan economic sentiment graph that Scott showed, which switched with the president. Over here were I to say the economy was better that people think, I’d be the leftist.
>Still, did Baumol or the other economists who first discussed the effect in the 1960s predict it would make people feel like things were outright worse, as opposed to just getting better less than would be expected from raw productivity numbers? Seems strange.
>Also, hasn’t the Baumol effect been basically constant since at least the Industrial Revolution? And isn’t the Vibecession only 5 - 20 years old?
I can’t speak for Baumol, but Irving Kristol’s “Two Cheers for Capitalism” suggests something like a ‘vibecession’ was alive and well among American youth, and the American left (particularly academics and other elites) in the 1970s, when he was writing, and argues that a large fraction of this is due to the decreasing availability of high-status social goods—i.e. Baumol’s Cost Disease.
Somewhat similarly, in CP Snow’s essay “The Two Cultures and the Scientific Revolution,” he argues that the literature-focused elite have been upset at their declining power over society since the very advent of the industrial revolution.
What both of these thinkers share is a sort of sympathy for those who they are criticizing, since they may agree that those services which are increasingly out-of-reach (a stay-at-home maid, private tutors for one’s children, going to the theater weekly) are actually quite nice to have, while the more widely available, democratic technologies which replace those goods (vacuum cleaners, cheap textbooks and online coursework, television) are not satisfactory replacements.
So why the vibecession?
I don’t know, but Kristol and Snow might suggest we look first at a change in the structure of the American elite around that time. Academics and the “literati” are particularly likely, in their view, to have a reactionary response to modern culture (often veiled in leftist/socialist/redistributionist ideas or a romanticization of a ‘nobler’ past).
I’m not sure this theory actually works out, but I welcome others input.
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
Good landlords will minimize rent increases for good tenants to control risk. If your good tenants move out, then your unit might sit empty for a while, and your next tenant may be terrible and cost you more money, aggravation, etc. I have benefited a lot from this by always renting from individuals (rather than BigCo) and being a low-maintenance tenant.
(Like most mid-30s millennials, I'm still renting. Our adult lives have consisted of: the great recession suppressing employment and wages; rampant NIMBYism from boomers pulling up the ladder behind them constraining supply and pushing up house prices; and now sudden inflation pushing up mortgage rates and eating away at what salaries we've managed to obtain.)
I do think a lot of common statistics misstate the situation by quoting averages or medians instead of marginal values, which are what people who are actually out in the market will experience. There's also a more common and banal sin of comparing monthly or yearly growth *rates*, which tell you very little without picking a starting point and integrating from there.
>Good landlords will minimize rent increases for good tenants to control risk
This is a completely pedantic response, but not necessarily. The optimal strategy for a landlord depends a lot on market context, their overall portfolio, and their personal financial goals. Once you scale your property portfolio past a handful of properties, most landlords tend to move past focusing on good quality tenants to treating their properties as way to generate income on land speculation. The house isn't the value; it's that in 15 years a commercial developer will back up a dump truck of cash for everybody on your street to fuck off so they can put a 300 unit 5-over-1 with ground level retail up. The income from tenants in the meantime are just a bonus and a way to stay in the green after property taxes. Or they liquidate the houses they have focused on keeping in good shape to have the liquid capital to buy into or start a fund that does commercial development.
No real disagreement here, I just used to work in a weird landlord-adjacent real estate industry and now own a small number of properties myself.
I also previously used to work in a weird landlord-adjacent real estate industry, and my impression was simply that tons of landlords are not profit-maximizing analytic types. Or have a college degree, or are particularly intelligent.
Most small landlords are just not running very professional operations. Lots of them purchased a building in the before times for whatever reason, and are surprised to find themselves still a landlord, and are vaguely aware that they turn a profit somehow. Lots of them are foreigners with minimal developed-country education, who buy real estate instead of stocks because that's what rich people did back in the old country. Or they're just old and unaware of what's going on. But very few landlords I ever met struck me as financially sophisticated, profit-maximizing types
This also matches my experience and that landlord type isn't only restricted to immigrants. Plenty of unsophisticated native born people buy property because it's a very practical, approachable way to build wealth. For some people, the stock market is just too abstract and they can't make sense of it. Unfortunately this is also how we get mini boom-bust cycles in real estate. The STR fad was driven largely by unsophisticated hustle-and-grind types, whose poor business sense and is now why nobody wants to stay in AirBnBs anymore. And now there's a good amount of poorly maintained ex-STR housing stock that's being routinely put on the market now that AirBnB is clearly not a vehicle by which one can get rich quick.
On the flip side, that's inherent security in real estate - even if you can't quite turn an operating profit from rents (and let bachelor/bachelorette parties completely trash your property over the course of a few years), that parcel of land will always be worth something.
What's the percentage of landlords (and landladies!) that manage only a single property or two in addition to their regular job? What's the percentage of rental properties that are managed by amateur landpeople?
My mother owns a spare flat and she's been very reluctant to raise the rent for exactly the reasons Kevin wrote about. I had to hound and pester her, showing her the market prices in her area. I think the only thing that helped is that she had recently retired and had actual time to spare.
A good tenant is a source of passive income for an amateur person of land. A bad tenant or a lack thereof is a source of stress. With a good long-term tenant, you show up once a month to collect a stack of cash and leave. If they leave because you priced them out, you have to spend that earned cash to touch up your property to make it look presentable, you have to spend time showing your flat to potential tenants or hire a realtor to do this for you. During this time the flat is lying fallow. Even if you find a new tenant quickly, there's always the risk they will leave after a few months, and you will have to start the process anew.
So, if you have a day job and manage to snag a renter with a lackluster social life, no pets, no dangerous habits and no need to be a Karen about everything, you probably want them to stay, even if this means you end up renting to them at below-market rates.
I don't know the percentage you're asking for your first question and I suspect we are from different countries since you are using the word "flats." For your second question it really depends on how you define "amateur." In the US, build-for-rent housing is an extremely common real estate investment. In our major metros, most landlords are corporate landlords with access to institutional capital for major development projects. But build for rent really is not common in most of the world, so I suspect this is not the case where you are from.
Those are all certainly normal concerns landlords tend to have. And maybe exacerbated in countries with relatively flat wages but increasing rental housing costs, which is not really a problem where I live.
The Friends theme was channeling the same period of job market malaise that also brought you the 1990 film Slackers.
Except by the time Friends was at its peak of popularity, that GenX "everything sucks" period was in the rearview, we were into the Clinton years, and heading into the fun part of the first big IT boom. (Personally I managed to graduate in '99, but then went to grad school for long enough to miss out on the boom -- by the time I decided grad school wasn't for me, the bubble was just ready to pop. I joined a startup, which folded within six months. Then I finally went back and got a Master's degree, graduating in 2009. Things have worked out fine for me in the long run, but oof. Timing: I have it!)
Friends might be part of the problem for Gen Z. I gather it’s still popular. Do these jobbing waiters, actors, chef, palaeontologists, masseurs/singers and whatever chandler did seem poor to you? Seems they have a nice 2 pads in New York and plenty of spending money.
Not realistic I know, but Gen Z might not be checking into that.
Exactly. Search for the blog post "No Friend in 'Friends' " by Rat Faced Man. He argues precisely what you say, that 'Friends' did a lot of damage:
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Failing to do the math on life is much more subtle and widespread than dressing up like Mr. Rogers and putting on an all-day train-and-puppet show. I mentioned previously that people get all kinds of fake ideas and bogus life scripts from various places, and a key place for people who are adults now [in 2016 - C.], trying to figure out what to do next, is lame 90s sitcoms. It’s outrageous but it has to be true, because lame 90s sitcoms had immense audience penetration of a kind that today’s prestige dramas can’t begin to imagine. For every person who watched Jon Snow take it in the shorts, almost eight watched Ross Geller search for a monkey. If people act out what they see on TV, they’re going to be acting out, among other things, Friends.
The enabling conceit of Friends (among many other shows of the period) is that you can move to New York right out of college, screw around for a few years, then you marry, have kids, and somehow “learn how to adult.” I know a bunch of people who tried that out and they’re all childless or broke (or maybe finally grudgingly squeezing one out at 39 while still renting and carrying education debt with meager or negligible retirement savings.) Turns out that working 10 hours/week at a coffee shop doesn’t pay your way in one of the world’s most competitive rental markets. But that’s easy mockery. Truth is, paleontologists and sex columnists can’t afford to live in Manhattan either — they make less than NYC garbagemen.
The ugly truth is that prestige jobs are fraud lifestyle “jobs” for people whose real money comes from elsewhere, and by “elsewhere” I mean Mom and Dad (or possible Grand-papa.) Maybe it’s old money, maybe Dad just owns a Chevy dealership in Columbus, Ohio. Whatever. These are jobs for rich kids to put on their resumes as they climb the social ladder and network with other rich kids. The math makes this obvious. In real life, the Friends would have been barely solvent even if they were working as doctors and lawyers. In short, it’s a toxic life script that you have to consciously reject.
I'm from behind the Iron Curtain and 90's American sitcoms were incredibly damaging to the local psyche, almost like that meme about *Grapes of Wrath*: "A movie about a poor American family forced to move to another state to escape droughts and dustbowls? We have to show it! Wait, what do you mean 'in their own car'?"
*Grace Under Fire* was a random-ass sitcom that was for some reason chosen for translation and syndication here. The titular character is a recently divorced mother of three, trying to juggle a factory job with raising multiple kids on a single income while trying to avoid her abusive alcoholic ex. Extremely relatable!
What does her house look like? She probably has to rent a shitty one-room apartment with her son sleeping in the kitchen to give her and the daughter some privacy, doesn't she? Or even worse, rent a room from some grandma? Nope, she can afford a house! Granted, it was a small house by American standards, but it certainly looked like luxury to us back then!
Huh. I always thought that it was widely understood even at the time that the most ridiculous thing about Friends was that these people could afford their apartments. (I think there’s even a joke about this in some sf movie or show, where the aliens ask about it?) But maybe my own real circle of friends was unusually well-informed about the American economic landscape?
Ah, interesting… Maybe time has stripped away the context, and that’s how you get “this is what they (the woke mob and immigrants, or the billionaires, depending which flavor of populism you chose) have taken from you!”
They made at least a passing effort to explain the apartments in the show. For one thing, they're on the sixth floor and there's no elevator, which makes the apartments somewhat less desirable than they normally would be.
The bigger factor is that the building is rent controlled and Monica's grandmother has been leasing the apartment for decade at what is now an absurdly low rent and is currently subletting it to Monica. Chandler and Joey are probably paying much closer to market rent, but their apartment is much smaller than Monica's. Chandler makes very good money for a 20-something; Joey usually doesn't, but Chandler seems to be willing to subsidize Joey.
That said, the apartments are still enormous by NYC standards. I can only assume that the camera crew is subletting the fourth wall from them.
I usually lean toward the CPI approach that discounts prices for hedonic improvements — I understand why it exists — but in practice most people already account for tech improvements in their own heads. What matters more in lived experience is the price of frequent and unavoidable purchases like food and housing, and those rose sharply during the recent inflationary surge. Those categories should arguably carry more weight.
I’m also not especially swayed by appeals to Calvin’s grandparents. The “vibecession” debate is really two different conversations talking past each other: one about the current malaise and economic anxiety of the past few years — felt across generations but especially among Gen Z — and another about factory work in the 1950s, which is a different world entirely.
The early 2000s were, by contrast, a strikingly optimistic period — even after 2001 and Iraq — whereas today simply isn’t. That shift in recent mood is what is important.
This hasn’t been a stable economic era for the current generation either. 2001 brought a mild downturn; 2008 delivered a severe Great Recession that some countries never fully recovered from; and the Covid shock, followed by messy post-Covid inflation, has piled on further uncertainty.
AI now looms over the labour market, with its loudest champions often celebrating the potential loss of jobs, (or actual job losses in quarterly reports) including in once-prestigious professions. It’s no wonder Gen Z feels uneasy or is turning to anti capitalism.
Has there ever been a stable economic era? We've always had recessions (or even depressions) every 10-20 years, as far as I can tell. The fact that we haven't had a full-on depression in nearly a century is a remarkable achievement.
These were very much exceptions to the rule, though I suppose that if you're young enough and don't pay attention to history they might feel like they were the norm. And even then, they only broke out of the normal pattern by managing runs of (mostly) solid growth that were twice as long as usual.
Im not sure why people would have to be historians when instead they can just live through stable eras, and then unstable eras. Or be born into an unstable era after a stable one and talk ti their parents.
Perhaps stable is not the correct word here, it’s not like 3-4% growth per year can continue. However, as the song says, if we had not seen such riches we could live with being poor.
I mean the Chinese are feeling despondent as growth slows down from 10% to 5%.
But if we were to be economic historians with a real understanding of previous eras then it’s just not true that this era is stable - outside the US has been even worse since 2008. Since 2008, the UK economy has felt persistently unstable rather than cycling back into a long, confident expansion. The financial crisis and subsequent austerity period brought stagnant productivity and a prolonged fall in real wages. Then there was a the 2011–12 near-double-dip slowdown; then Brexit uncertainty from 2016 to 2019 suppressed business investment and weakened sterling.
Covid created a sharp collapse and uneven rebound that left structural scars, and from 2022 onward the country was hit by an energy-price and inflation shock, rising interest rates, falling living standards, and the market turmoil surrounding the Truss mini-budget. Now we have Labour and more austerity. Misery followed by misery.
This isn’t a vibe recession though, it’s the real thing.
I guess maybe we're just talking about different things. I'm addressing the widespread claim that now is some historically bad situation, pointing out that ups and downs are just normal.
As for whether this is a vibecesssion... all the economic indicators normally used to measure recessions say we're not in a recession, though neither is it a period of great growth. We may be heading into a recession, though. It's hard to know. Recessions are only identified with certainty a year or two after the fact; it's hard to know whether you're in one when you are, and very hard to know whether one is coming.
We're talking about economic stability. If one year everyone's eating and the next year a lot of them are dying of starvation, that's extreme instability.
I think the vibecession benefits greatly from Nietzsche:
1. Signals in group status as being ironic, contrarian, and The Cut reader
2. It is a symptom of ressentiment and revenge of the weak Nietzsche warned of
3. It is also a facet of his greatest warning to wit Nihilism
4. Finally, it’s a reactionary neurotic posture adopted by those who fail to tend to the existentialist duty to create one’s own meaning in a post god world
It was a general attack on people who read Nietzsche, not you. Not an ad hominem unlike “Get well soon” - which I assume is part of your excellent rhetorical skills.
Quoting your favourite philosopher is all very well, and any teenager can do it, but the vibecession is a recent feeling. So what’s new? Despite your excellent rhetorical skills that question is still unanswered.
Very grateful for those "Highlights" posts! As least as good as the original post - and it became work to get through all comments, nowadays. As a German, I agree, we have less of a "vibecession", as we are in zero-growth territory for quite some years - econ-vibes are not great, too, but then they were rarely ever. A) Inflation - is a big factor in feeling not-so-great: Until Covid, prices at ALDI were super-stable for two decades as least. my stable food (pasta) was less than an 1€/kg, then the shelves went empty (!!!) and when pasta returned, price had doubled. Things calmed down, but we are still in +50% territory for many food-prices I remember (oats, Windbeutel, Schokolade ...). Sure, my shares rose 50%, too, and salary went up somewhat, but mood is affected on each visit at the supermarket. And eating out? I rarely do, but boy those new prices feel B) Rents in Germany: Well, there is usu. no real rent-control for new contracts. But there are strict limits on how much one can raise yearly AND very strict limitations on how to end a contract (at least if that lower old rent is paid regularly). In addition, many landlords are private people: My mom had 2 apartments to rent out; she felt very, very bad about raising the rents ever - and she votes conservative, not social-democratic ;)
C) Buying an apartment in Germany/Europe is much less uncommon than in the USofA, it seems. Why? Well, there are more apartments compared to houses ( at least the ratio is different). No giant suburbias in ol` dense Europe. And as this has been for a while, the legal rules for apartment-ownerships seem more clear and less troublesome in most of Europe, too. ( I tried once to understand US-condos but, yep, there seemed to be much unexpected differences in the details.)
The most surprising thing I've read about Germany recently is that trains apparently no longer arrive on time, which is a heavy blow to the German self-image of punctuality and reliability, and the starkest manifestation of the general economic malaise. How accurate is this narrative?
It's 100% accurate. You might even underestimate the effect, both in terms of how unreliable the German train system is now, and how much reputation this costs in (Western) Europe. Living in a neighboring country, the German railway has probably overtaken the weather as the default small talk topic that everyone can easily agree on.
Deutschebahn is a victim of chronic underinvestment to the point where every neighboring country is also aware of it failing, but at least as a person from a neighboring country it doesn’t seem to be perceived as „everything that’s wrong with Germany” but more as a cautionary tale, that endlessly postponing investment into crucial infrastructure at some point will bite you. Germany otherwise seems economically as fine as the rest of Europe (other than the Southern, maybe?) meaning vibes are OKish and the social net is still holding, but there is some unease about long term viability during moments of reflection.
Narrative is true. Even official numbers show only 60% of trains on time. Less sure how much we Germans care. Most drive cars. When I take trains (to airport), I allow for delays by going earlier. Shrug. And I buy cheap "fixed connection"-tickets: if there is delay they change into open tickets (take any trains from A to Z). Last time, I got emailed 3 weeks before, my ticket got opened 😁
In the US, limits on how much rent can go up on *existing* leases are called "rent control" too. It's crazy how in Europe, that's so much taken for granted that you only call it rent control when it applies to new leases.
Thanks! And 'new leases' mean any new contract, I assume. Interesting. Otoh, no limits on rent change equals right to kick out people anytime, by claiming a 567% raise. As a Caplan-reader I see upsides, but I see why most voters see downsides. And some limits (=protection of existing contracts) as: not crazy.
> Question for Aristides and others: why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.
At least in the US, this is partially just a definition question: An apartment you own is simply called a condominium instead. But I would make a data-less guess that the remaining difference is largely an income effect: You buy when you have more money, and since you have more money, you get the bigger thing with more space.
In response to Moose's comment:
> Every explanation for the vibecession that does not attempt to explain why there is a huge drop in 2021 specifically and persistently lower vibes for the following years should be disregarded. I think the best explanation is just inflation: this is what is most different in 2021-2024 compared to previous time periods, but you can also blame the shift to remote work, or higher housing prices. Examples of bad explanations would be “phones bad”, “media bad”, or “inequality bad” without explaining why they became worse in 2021.
I wouldn't be so quick to dismiss these sorts of explanations just because there was a sharp change in 2021. For example, with everyone locked up during COVID, there could have been a jump in the impact of social media. In fact, based on the evidence you (and I, and others) presented showing a massive (and arguably growing) gap between economic reality and perception indicates to me that it is indeed very likely that something related to that perception--like the media--is to blame.
> I would like to see someone seriously investigate an average 1955 couple’s budget vs. an average modern couple’s budget, discuss how far each one would go, and do a more careful analysis of who was getting the better deal, and by how much.
Again, lacking data here, but I think that the "you can afford a tradlife" idea is right-ish. It's not literally right, but that's largely because we've made it illegal, or at least very socially undesirable. Smaller houses, very difficult to build. Electricity Let your kids play on their own so you have time for other things, forget about it. 1950s quality health care, any doctor who tried would be stripped of their medical license. You see tweets like "in the 60s my grandfather could support a house with 3 kids and a stay at home wife on a blue-collar salary" which is *true* but missing a ton of important context. They have that information but not any of the relevant details.
A comment on inflation: I agree that people confuse "inflation" with "price level" and get wildly angry when the price of anything goes up, even if their wages went up even more, and think that prices are going to go back down. This fact may be exacerbated by inflation being abnormally low from about 2009 until COVID: https://fred.stlouisfed.org/series/CORESTICKM159SFRBATL
I think people got used to a regime with minimal price increases for most consumer goods (food, gas, etc.) and now even an inflation rate of 2%, which is what the fed targets, feels brutal.
> For example, with everyone locked up during COVID, there could have been a jump in the impact of social media
This is an attempt at explaining the sharp change that happened around 2021, and its a LOT better of an explanation for the observed data than a simple "social media bad" argument. I still think it's mostly inflation, but I'm open to putting some of the blame on the pandemic.
There is a lot being made of “taking people at their word”, but what circumstances do young working people have to compare against in order to make their judgment that they are economically badly off? Not their parents today, not their peers…
I’m a late-thirties working professional who can observe in themself an unconsidered background belief that things are economically harder now than they were 20 years ago. But when I look at that belief critically I find that I basically have no sense at all of how things were economically for people back then, when I was a kid or adolescent. I feel the vibecession. But we should absolutely *not* be taking young working people at their word, because we don’t have a good justification for the economic beliefs we have.
In my view, the answer must be found in a false narrative, or myth, of how *good* things used to be economically in the 90s and 2000s, and therefore of how much better they were than now—a narrative which would have arisen though I’m not sure where that is coming from. Perhaps the unattainability of home ownership is indirectly the explanation. Not “people feel poor because they can’t afford a house”, but “people feel like their parents were better off than they actually were, because their parents could afford one.”
I entirely agree with you that trying to compare your lifestyle with anything but the recent past is an exercise in myth-making. Not to say that it's entirely futile, or that I'm 100% certain that the pessimists are always wrong. Just that it's so difficult to make an objective comparison that it isn't possible more than a tiny fraction of the people talking comparatively actually have a leg to stand on.
Everything changes over long periods of time, leaving no stable reference point for intergenerational comparisons. You can compare individual things (e.g. I bet it's much easier to get out-of-season fruit now than it was in 1950, phones are obviously way better, nannies and haircuts are probably much more expensive due to Baumol's cost disease, etc.). But clearly, today's world is better in countless ways than 1950, and maybe worse in countless other ways. Assigning an overall score seems very subjective.
I highly suspect that you're tripping across the same issue that Robert Putnam found by searching through social statistics. Basically, there's a been a decline in social capital in the US since the 60's. His book The Upswing, for all it's faults (not the least because he was unable to answer the why) did a good job of showing how social connectedness rose till the 60's and then declined.
From 2019 to 2023, peoples' stated importance of "patriotism", "religion", "having children", and "community involvement" tanked, while the importance of money is on a steady increase. The more you care about money, the more your vibes will "sublimate" economic concerns, be they housing, prices, etc.
Would be interested to hear from someone in China about whether they have an even worse rising tide of rising expectations.
I'm fully convinced nearly all of the bad vibes are due to completely unrealistic memories (cultural or personal) of the past, combined with (social) media selling opulence as normal/expected, combined with the much-discussed loss of community (which is complex, to be sure), rather than actual economic conditions.
In the late 90's/early 00's, when I was growing up, my parents made somewhere in the realm of $100k in 2025 dollars. It felt like a typical middle-class lifestyle. We had a 1600 sq foot house in a somewhat low cost of living rural CA small town.
We went out to eat maybe once a month, at most. A typical dinner was something like baked chicken breast with half a baked potato and microwaved frozen peas, or ground beef and bagged seasoning tacos, or pork chops and applesauce.
We went on one trip a year, usually, and it was a road trip where we brought food stored in ice chests, rarely ate out and roomed at budget, but not bottom of the barrel hotels. I flew on an airplane once before going to college, for a trip we saved up for for nearly 10 years.
My mom was cognizant of which gas stations in towns we frequented were cheapest. She knew what days the store tended to discount meat. She cut coupons. Neither of my parents drank or had expensive hobbies. We tried and, to my knowledge, mostly succeeded at not holding credit card debt. We usually only had one car. They were always used, usually purchased from relatives or people we knew from church. I had toys, but not a ton of them. The significant kid purchases--a bike not from wal-mart and my first video game console--I made myself by saving up my allowance and odd jobs I did for my grandfather.
My parents invested more in my and my sister's hobbies and sports than fancy material goods--photography and softball for her, golf (always used clubs and the cheap local course) and forensics for me.
It seemed like a solid, comfortable lifestyle. My parents were sometimes worried about money but in ways that seemed normal. I never thought we wouldn't have food or shelter or security.
My own household, now, has only recently eclipsed $100k. We live in the suburbs of a high cost of living city. I don't feel a bit more wealthy than when I did growing up. I feel 2-3x more wealthy. I eat out way more than I did growing up. Like once a week. The meals I had growing up now seem quite modest. I travel way more. I don't worry about coupons. I know which stores are cheaper and invest the time to try to find good deals on things, but at this point that feels more like habit than necessity (my parents instilled in me a very robust sense of frugality).
I'm amazed by what culinary wonders I have access to now. I'm pretty sure sushi didn't exist in my hometown when I was growing up; I first learned what Pho was well into adulthood.
I feel, and am, incredibly wealthy, and I felt this way when we were making $60k and living in a studio apartment. Even then I felt richer than I was when growing up (though I didn't have kids at the time, to be fair).
Yep. Unrealistic memories, and the social networks where you watch people's photos from their perfect vacations, and listen to bots telling you how everything is horrible. The actual problem is that now we got better entertainment on screens, so people meet less often.
“The Chinese story has an obvious moral: people care about growth rate more than level. But even this doesn’t work for America - our Vibecession doesn’t correspond to a period of unusually low growth.”
Scott, you can’t have it both ways.
If you’re gonna claim that the vibecession dates back 15-20 years, rather than just 4, then it absolutely IS the case that growth rates now are less than what they were from 1982-2000.
George Will made this point well ages ago: “If long-term U.S. growth were about 3.5 percent, it would restore cheerfulness — whereas if growth stays closer to 2 percent, we’ll have ‘continuing social disappointment and political crankiness.’”
I think you're technically right, but I think the difference is not that huge. Hard to say what the minimum meaningful difference in GDP growth is, but according to Mr. Will it's apparently 150 basis points. My quick math from FRED data says that average real GDP growth was 3.02% from 1982 to 2000, and 2.35% from 2001-2024. Granted, it's only 2.11% if you look at 2009 to 2024, but that's still a difference of 91 basis points vs. Mr. Will's 150.
I’d seen it written elsewhere as 1% annual, I.e. 100 basis points, as being the large difference.
And remember that 3% annual growth is in fact 50% faster growth than 2% annual growth.
While I cannot claim that it is literally a linear “50% better” relationship, I do think that the growth rate on a multiyear basis really is the single best explanatory value to vibes.
It's interesting how much of a challenge investigating the vibescession has ended up being. I've seen many smart people have their audiences turn against them because they found themselves reluctantly agreeing with the economists rather than the public after doing their own research. The fact that not even you could find the cause means it's tricky indeed.
During your original post, I had a lot of ideas for angles to investigate, but by the time I was in a position to type something down, the comments section was so flooded that I knew nobody would ever see my work.
So I'm only going to leave one idea this time, rather than add so much spam that I risk creating a gish gallop. It can also be considered a response to your boomer's article.
A common experience among us "low-vibes" young people, are constant reminders from our parents about how much of a disappointment we are to them. They frequently ask us why we aren't hitting our milestones: finding a wife (or even a girlfriend), getting our own place, having kids, building a career. The implication has always been that at our age, our parents were able to do those things. So why can't we?
You press them for an anecdote, and they'll tell you about how they were able to get a job by walking into a building and hand delivering resumes, or maybe they'll talk about how they were able to pay their way through college without taking on any debt. For some reason, they never talk about the actual struggles they went through, almost as if they had forgotten them. Is it no wonder why young people have such a rosy picture of the past, when all their information about it is filtered through nostalgic parents?
And yet we are forced to live up to that false ideal. You say the stats show that age of first home purchase hasn't changed that much between boomers and the current generation, yet our parents disagree! We have these unrealistic expectations foisted on us, and then we are called lazy, or stupid, or wasteful, when we don't meet them.
People aren't developing unrealistic expectations because of their phones! My argument is that the source of them is much closer to home.
I don't know how much this one idea is able to explain the entire "Great vibepression", but I can easily imagine a scenario where the youth are "low-vibes" because their parents call them disappointments while older people are "low-vibes" because they are disappointed in their children. Both separate effects end up adding together to create the appearance of a single unified "Vibepression"
I wonder how you would design a survey to test this question, because I somehow doubt most parents would be willing to write down that they're disappointed in their children. That kind of attitude only tends to come out when they're put under stress, not in a sterile survey environment.
That's an interesting idea. It does seem to beg the question of why this generation is uniquely disappointing to their parents, compared with the preceding ones. Why didn't the unrealistic expectations of the Greatest get the Boomers and Gen Xers down?
Greatest were coming back from WWII. Their idea of a disappointment, calibrated to peer experiences, is somebody who ends up blown full of holes by a Nazi machine gun, or driven insane by pacific jungle horrors, or who was just too unfit to effectively participate in the first place. That was a much easier bar for Boomer kids to clear.
This is interesting. I see it from a slightly different angle: our younger generation is defensive about not meeting the expectations of our parents' generation, but I don't think the older generation needs to paint their early adulthood as easy for this to happen, nor do I think they generally do so. The stereotype is that older people emphasize how much harder they had it ("Back in my day, we had to walk 15 miles to school, with no shoes!" Okay, that example is a humorous exaggeration, but they do tend to emphasize that things were harder). Our generation has a vested interest in proving our parents had it easier.
You see the defensiveness a lot on social media. Reddit posts and TikToks that appear to show we have it harder than our parents get upvoted and spread because it protects our ego and lets us justify ourselves to our parents. Defensive posts in general seem popular on social media within their target demographic. E.g. teachers and nurses often post memes or jokes about how they work really hard and are underappreciated.
None of this explains why 2022 specifically had bad vibes, but it could partly explain longer term bad vibes. Social media may also amplify this type of thing.
There's a problem when the story is that the parents got a job and a house and a wife despite having a harder life, and they keep complaining that their children still don't have those things even with their easier life.
Their children should be ahead because their lives are so much easier, but their parents keep telling them they're behind; which implies that either they're less capable than their parents or that someone is lying about something.
Finally someone gets it. The reason why I believe that it’s more than just vibes, despite so many smart people saying the opposite is because the “Economy is just fine!” take fails a lot of sanity checks.
Am I supposed to believe that decades of rising inequality, of corporate lobbying, of congressional deadlock, of a polarized 2-party system, of real estate financialization, of suffocating zoning laws, of NIMBY activism, of declining anti-trust enforcement, of unopposed monopolies running amok, of product enshitification, INSERT-PET-ISSUE-HERE.
Am I supposed to believe that after decades of all of that, there wouldn’t be any negative effects on the material well-being of the average person, which is what the economy is supposed to keep track of?
I’m seeing a lot of causes. Am I really supposed to believe there haven’t been any effects?
Yes. That's how we perceive it and why we're defensive.
The older generation isn't necessarily lying. I haven't heard them claim housing is more affordable today. They talk about other things that were harder in their time, all of which may be true.
I think if our parents were telling us it's fine if we're a bit behind because things were easier in their time, our social media posts about then vs now wouldn't have the same defensive tone. We keep making posts about how much easier they had it.
You state the 3rd quarter GDP as though it were known. But the people in charge of knowing and reporting it were replaced because their boss didn't like the numbers they were reporting. Perhaps the new crew will be reporting as accurately, or even more accurately, than the old crew. But that's not the way I'd bet.
Writing from the Netherlands, we have a bit of a mixed bag. Most people are unaware we are in a recession and seem not to care much. On the other hand a lot of recent graduates believe “I will never own a house, and this is the worst thing ever”. The latter seems not true, some friends who voiced these complaints a couple of years ago are now home-owners. House prices are up 50% on average since 2021 though, so they have a point that it’s getting harder.
I believe we tend to underestimate the quality shift when it comes to housing.
I live in a house built in 2022. Compared to the houses from 1960s or 1970s, which I visit, it is a different sort of beast. Extremely hi-tech and energy savvy. An old Czech house will feel drafty and cold-ish in the middle of winter. The one I live in - well, I can walk the entire house barefoot comfortably even now with outside temperatures below zero, while spending half as much money on energy costs as someone who lives in an old house, or even less.
This is a major difference, but of course such a new house with newer technologies costs something to build.
I wanted to chime in, as an American who has lived in Europe for the last 8 years. I moved to Germany in 2017 (aged 21), and to The Netherlands in the middle of 2020, where I plan to remain.
While there are definitely economic concerns that are particular to the younger generation, it really doesn't seem like the same vibe-cession that is in the US. Housing is the biggest topic and complaint, and rightly so - students are being admitted to universities, then turned away because there is no place for them to live. In 2017, I rented a room in a shared apartment in a nice location in Berlin for €300 - it would cost at least double that now, despite having just as many roommates. That said, this is often conflated not with economic issues, but with immigration issues. People blame not only refugees or the usually complained about migrants, but also so-called Highly Skilled Migrants taking tech jobs from non-EU countries (I fall into this category, though people tend to have less issues with me and more with the many people from BRIC countries).
I'd be willing to bet that a lot of the positive sentiment among young people here does come from the fact that so many are foreign and have better jobs here than they would in their home countries. Not only the non-EU immigrants, but also people from southern or eastern EU countries. I definitely see what the Italian commenter meant - I have several Italian colleagues who love their home country but never would return because they have no opportunities there. (Not to pick on Italians - I know Portuguese, Poles, Greeks, and Romanians who would say the same thing). Personally I support the EU (and its eventual growth into a "United States of Europe"), so I think this is more of a growing pains issue, but I'm getting off-topic now.
I wonder if there is something to be said about young Europeans in cities not having or not needing to have a car - I don't have one, and probably 75% of my friends don't either. (I acknowledge this is coming from living in cities - rural Germans and Dutch people definitely would make more use of a car.) Of course you still need to pay for a bike or public transportation, but it does cut out a significant cost, or rather change the category of the cost from a necessity to a luxury. I think this categorization of necessities and luxuries is a huge part of the rise of the vibe-cession.
[Edit: I looked it up to make sure I wasn't overly reliant on my own anecdotal experience. According to the Dutch Central Bureau of Statistics, car ownership rates grow gradually with age - from 3% of 18 year olds to 49% of 29 year olds, the German Statistical Bureau shows 25-45% in that age range.]
The "Doomerism" that seems to be just as much if not more prevalent here than in the US is about the environment. The biggest political movement around young people/university cities is the Greens, and there's plenty of hand-wringing around how it's too late and the Earth is ruined. I know this opinion exists in the US as well, but it feels more mainstream/accepted among my European peers than among the Americans (but that could just be a personal bias).
"The strongest argument against this position is that the vibecession started sometime between 2008 and 2023, and I don’t think this was an especially bad time for community and purpose compared to any other time since the 60s."
The argument that it was an especially bad time for community and purpose is falling fertility rates. Which could be both a cause and an effect of less community and purpose.
The median rent in Alabama is somewhere in the neighborhood of $1800 and Alabama was a cheap state to live in. Something bad is happening with housing for sure
I don't know. It's easy to confuse nominal and real. US Census data says that the rent part of the CPI-U has gone up 40% since 1981 relative to the rest of the CPI-U. But real median personal income is up 70% over the same period (corrected with the CPI-RS, but the difference isn't big enough to matter here). If you just look at the period 2009 to present, it looks like rents have risen about 15% in real terms and personal incomes about 22%.
This doesn’t make intuitive sense because in the 50s and sixties a house cost 2x usually single earner household income and today it’s 6x dual earner household income. A lot of games are played with hedonic adjustments and nominal GDP
Well, the rental market (which is mostly for apartments) and the ownership market (which is mostly for freestanding homes) are quite different. Renting just hasn't seen the same cost increase over the last 15 years that ownership has.
That’s true. The rational decision is to rent in most places. I think most people would prefer to own but just can’t afford it. Rent is also outrageous in many parts of the country, pace my initial example of Alabama. $1800 is not cheap. You could rent or buy in the ghetto but then you have to suffer ghetto life
Renting in Alabama is probably particularly miserable because of the military-industrial complex. Did you compare mortgage prices to rent prices? The average monthly mortgage payment is close to half of what that same house costs to rent, if it's up for rent/buy. I suspect this is because of the number of military and government contractors competing to RENT but not BUY the housing in the desirable locations, knowing they will probably move in about 2 years.
The point was that Alabama used to be considered cheap but isn’t anymore. As far as the military, sure they could potentially drive up rents locally but I doubt it would do much statewide, and they get pretty generous housing allowances. Metropolitan Washington DC is another story, so many government employees and contractors there do drive up rents and prices, in fact it’s one of the most expensive and richest areas of the country
So if this vibecession is a real phenomenon, could it be that relative poverty, or the perception of it, somehow trickles down just as wealth is said to?
Summarizing my understanding after reading the excellent contributions:
If vibecession is measured from the first use of the term, inflation is an adequate explanation.
If evaluated from qualitative cultural malaise, many possibilities emerge: social media, increasing costs for big items, tepid growth, misplaced nostalgia. I’m dubious of this approach given how anecdotal it is.
That said, income inequality might deserve attention. Not as a direct cause, but as a necessary condition. The steepest increases happened during relatively optimistic periods (late 70s through 2007), then plateaued. Awkward timing.
To me, this points back to social media. What changed around this time? The scope of comparison exploded. Social media made the inequality legible. Visibility of the existing inequality increased just as the populist wave began.
PS, the Friends theme may have lyrics that point to tough economic conditions, but also a community that supports each other (real vs Facebook friends), and an upbeat rhythm / vocal inflection. If anthropologists find a discussion pointing to that song as evidence of cultural depression they will feel like they are studying a different species.
Victor Thorne, its just silly to believe that you need 200k to buy fancy groceries. I agree that this is a big part of QoL... so I just go and do it. I did this when my income was around 65k. I even did it while unemployed! more limited and judicious of course.
The key to feeling rich is to spend as you feel like in the moment while your bank account is still shooting up.
You seem to think you have a money constraint, but its clearly a skill constraint. you need to learn which categories of things its good to splurge on, and which are marketing traps. you need to learn to dial in a target spending level without explicit budgeting. that last skill especially takes a lot of pressure off. And then there's temperance: enjoy things when you have them and don't think about them when you don't. Most goods have sharply diminishing returns anyways.
I had the same reaction (and wouldn't have made my own post had I seen this one first): my eyes shot wide open when I saw 200k. I wonder how much of it is just from people who have a bad understanding of money?
Yeah. We make <100k for a family of 5, and can still go get Friday oysters at Whole Foods and fancy cakes for birthdays or whatever. It's not like Costco even sells actually bad food nowadays anyway.
>But actually, capitalism shrugged off the Great Recession just fine, and continued exactly as before. That must have been a bitter pill to a lot of budding socialists. I wonder if something about the situation broke people’s brains.
I get it, 2008 might as well be a different era of human history at this point, as far removed as the Middle Ages, and one might be forgiven for not remembering all the details. But do you not at least remember iconic images like these: https://www.reddit.com/r/pics/comments/l77fdv/
Maybe you'd be, given the chance, among those up there sipping champagne, while the people down here lose their jobs despite having no personal investment in the matter at all. But let me at least remind you that socialism very much saved the day in 2008. Socialism for the rich, that is, with gigantic taxpayer bailouts https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008 while everyone else gets to continue spinning the wheel under turbo capitalism. Yes, it was mostly business as usual if viewed from sufficiently far away, you got that right, but under normal market mechanisms, it absolutely would not have been.
The biggest bailout was actually for small banks, whose investments in commercial real-estate crashed (see Scott Sumner on this). Ben Bernanke's focus on the credit channel rather than monetary one was a mistake, as paying interest on excess reserves caused monetary contraction that kept us from growing the economy back for years.
Disappointed by the discrepancy between how heavily your whole thesis relies on inflation-adjusted metrics, and how willing you are to handwave away questions of inflation as some separate question best left to economists.
Very interested in the concept of inflation in terms of strictly essentials, e.g. *basic* apartment, *basic* car, *basic* food. How has bottom-dollar rent in particular been affected by private equity acquisitions? How have bottom-dollar car prices been affected by cash for clunkers and subsequent emissions regulations that effectively make the most affordable cars illegal? How bad is inflation for people shopping at the dollar store? How badly has the transition from thrift stores to eBay affected the price of secondhand essentials?
On top of that, who is it that's mostly stuck in this bottom-dollar purgatory that may not correlate with larger economic trends. Could it be the "Lost Generation" everyone's been talking about? That would sure be a double whammy.
I agree that the difficulty of measuring inflation is important, but that seems unrelated to the other points you raise.
We can, in fact, measure changes in the prices of cars, dollar store offerings, apartments, secondhand clothing, etc. That's not the hard part. If your question is "how has the price of the 10th percentile rental unit changed in the last 20 years?", we can answer that with reasonable confidence. I don't happen to know the answer for the 10th percentile, but I can tell you that the 50th percentile rental unit is more expensive in real terms than 20 years ago, but real 50th percentile incomes have risen faster than real 50th percentile rents, so it's hard to use this data to argue that apartments are less affordable.
Instead the hard part is the changing composition of those categories. What a "car" is changes a lot over time, and what the dollar store sells does, too. This is the part Scott is leaving to economists.
Obviously we could, but it seems like nobody credible is doing it (or at least nobody on Scott's radar). Are there any mainstream economists addressing a basket of goods that's effectively just, like the Citizen Penrose comment says, a roof over your head, a running car, and 2000 calories of basic food?
I'm arguing that "what a car is" effectively doesn't change over time, at least not for poor people, and that's who the vibecession is fundamentally about. For all the tech improvements, a car is still just a way to get to work, and it's effectively a mandatory purchase for most Americans. If you're saying they're worth more because of all the technology in them, to me that seems at best neutral utility, and at worst negative - a way to require poor people to buy computers they don't need and can't afford to repair when (not if) they break.
Similar to a "million dollar iphone" being affordable but you can't pay rent. The core utility of the truly essential basket of goods essentially hasn't changed in 50+ years, but I bet the price has exploded. CPI seems almost designed to obscure that fact.
I don't think you can cleanly separate which improvements to cars increase utility and became standard due to consumer demand and increased wealth in the low-end market from improvements that offer no utility to low income drivers.
To give some examples of improvements that became common or standard since the 1950s:
Airbags, 3 point seatbelts, ABS brakes, traction control, air conditioning, child seat anchors, tire pressure monitoring, more effective brakes, better tires, power windows, adjustable steering wheel, automatic transmission, catalytic converters, blind spot alerts, intermittent wipers, etc.
Even poor people generally want these features. Not every feature will be worth the added cost to every buyer, but I would guess that most of the features that became standard in low-end cars are popular even among low-income buyers. And there is clearly some utility in a feature that might save your life.
I'm not sure which date range you're most concerned with, but cars have been continually adding more technology. I think this applies with any starting date, although obviously there will be larger differences the further back you look.
As far as personal utility to me, I can easily separate them, that's why I still drive a 30 year old car. To put it simply, anything added after about the year 2000 has extremely marginal utility imo. Broader market utility is impossible to parse because we no longer have a counterfactual world in which people can choose to forgo most of those features. I think everyone would agree, it's nice to have emissions control, but if it stops working and effectively bricks your engine, totalling the car or making it un-registerable, it's better to have a car without it.
Still, I trust the used car market value more than any value-added calculations carried out by government or automotive industry interest groups, and the market value of most of those features on a bottom-dollar car is near zero, because oftentimes you can't reasonably expect them to work for the full life of the car.
Speaking as a former mechanic, there's also a handful of features that mechanics would unanimously agree exist primarily to line corporate pockets. They might not complain about it openly, because it's job security for them, but you can see it clearly in which cars they choose to buy for themselves.
> anything added after about the year 2000 has extremely marginal utility
I completely agree with you (20yo car here, I'm happy with parking sensors and AUX, despite being generally into new tech), but from my time browsing car forums, we are not the average buyer. I've seen many people actually refuse to buy a car because it didn't have one of either heated seats, Apple CarPlay, or adaptive cruise control. "Poverty spec" is the phrase used here in the UK to describe an otherwise powerful, comfortable and efficient vehicle that is lacking a few of the latest gadgets.
Yes, lots of people are measuring these things, and write about them. The BLS's Supplemental Poverty Measure and MIT's Living Wage Calculator come to mind (although I don't think the latter is very rigorous, it is widely cited).
I don't agree that the vibecession is fundamentally about poor people, unless by poor you mean the majority of people. It seems like the nexus is college-educated, employed young people who make near, or sometimes more than, the median personal income. It doesn't make sense to call that group poor.
Cars, phones, products in the dollar store etc. aren't just slightly better quality or more fun to use. Cars are more fuel efficient, safer, last longer, and require less maintenance. If, nevertheless, you reject the hedonic improvements to cars and other consumer goods as irrelevant to the bottom line, then I struggle to see how a car can even be considered an essential for most people. If all you need is a way to get to work, and you don't care about comfort or convenience, then owning a car is extravagant. Just take the bus!
No, I would argue that it all does matter, very much. Vibecessioneers aren't complaining that they literally cannot afford to get to work. Almost everyone can afford to get to work. They are complaining that they cannot afford a lifestyle that is as comfortable (i.e. considering all the hedonic aspects of their purchases) as it should be.
There are two stories here: one where the vibecession is an unreasonable response to an imagined problem, cooked up by coddled young adults. The other is that there's a real, more specific problem that the data presented here fails to convey. Essentially that the bottom rungs of the ladder have been systematically removed - in terms of jobs, housing, and transportation to name a few.
I used to make good money, and I thought the economy was just fine. Then I spent some time homeless and working below the poverty line, and it opened my eyes to very real problems affecting the lower income distribution that straight up didn't exist the last time I was similarly poor.
Last turn I ran the numbers, the median American lives in an urban area of about 450,000 people. I'm pretty confident America doesn't have any of those which lack a bus system. Sure, some people live way out in the suburbs where the bus doesn't reach, but if you're budget constrained, that's the wrong place to live anyway.
The Census Bureau says 80% of the population lives in urban areas, but that's in a coding scheme with no "suburban" category and everything that isn't rural is considered urban. It also seems to classify some things as urban that the residents consider rural; I am guessing this is a combination of small exurbs in otherwise-rural areas, census tracts that span a mix of suburban and rural areas, and vibes-based self-report of areas that are objectively suburban as being rural.
I suspect what you saw was the population of metropolitan areas, but that definitely includes close suburbs. For example, someone living in Kirkland, Washington would be classified as part of the Seattle Metropolitan Area which has a population of 4 million. Seattle proper has a population of 780k within city limits, and Kirkland has a population of 92k. Seattle feels urban to me while Kirkland feels suburban.
Seattle has a pretty good transit system in my experience. Kirkland and the other Eastside suburbs (Redmond, Renton, Issaquah, etc) have bus lines that can be moderately useful for going to the airport or to downtown Seattle from a central hub like one of the suburban transit centers or from the Microsoft campus, but they were absolutely crap for getting around within the suburbs as of when I left the area in 2008.
I live in a city of a million people, and we obviously have a bus system, but I couldn't use it to get to work. I would have to leave the night before to be at the stop for the connector bus the next morning. And I'm not even in the suburbs, just on the other side of the city.
"Don't landlords raise rent on existing tenants each year to match market prices?"
No. Not really.
While AmalgamatedPropertyManagementCo that is funded by wealthy people being sold LPs by RIAs is a absolutely a thing, many (most?) landlords are smaller scale people who own lets say 4-50 rental units themselves, with or without a *local* professional manager. In that situation you are *one* bad tenant away from serious trouble. They can freeload without paying rent, can be very difficult to evict depending on jurisdiction, and depending on your margins could wipe out the profits of your other units. And/or can cause significant property damage wiping out years and years of careful capital accumulation, phrasing I'm borrowing from (I think) your post on Piketty.
Every time you take on a new tenant you are rolling the dice. So while some landlords are into profit maximization each year, a lot of them are also thinking VERY hard about *risk mitigation*. Existing tenants are more of a known quantity and your rent for new tenants is going to price in the risk.
But wait, why would a rent increase require a new tenant? Because tenants HATE rent increases. No matter how obviously necessary it feels like a jerk move so especially during an inflationary period like the one we've just been through raising each year to market price is going to make people say "hey wait a minute, haven't I been a good tenant for you, took care of the property, paid on time, etc why are you doing this to *me*?" and some percentage of them will leave.
And I suspect that landlords aren't legally allowed to discriminate who they rent to, so that goes into the risk premium they charge to new renters. It's the same as the American situation with HOAs and restrictive zoning that doesn't allow building cheap housing: if price is the only thing you're legally allowed to discriminate on, that's where all the demand for discrimination will pile into, raising it higher and higher. Stupid HOA regulations about lawns and decor and such are non-monetary means of helping keep out badly behaved people, but they only go so far and aren't easily verifiable. Money paid is.
"I would like to see someone seriously investigate an average 1955 couple’s budget vs. an average modern couple’s budget."
The Matt Yglesias post and the commenter mentioning their grandparents lifestyle also compared the 50s to the present, which feels like a bit of a mott and bailey. I don't think anyone would claim there hasn't been improvement since the 50s. The period from 1945 to the late 70s had undeniably strong growth in living standards.
It's the period after around 1980 where it's unclear if there has only been weaker growth or stagnation or decline, depending on which inflation figures you use. If I think we've had 45 years of poor, or even negative, economic performance saying things "but here was good economic performance before that" doesn't assuage very much.
I'd be much more interested in a breakdown of the median 1980 household budget to find out which of those three possibilities actually happened.
I entered college in the 80s and embraced - just have to trust me - a little Neo 60s hippie atmosphere that was current on our campus and others. And I don’t scorn that now. In fact, I consider it a perfectly natural part of the 80s.
Overall, I think there is a similar attitude to the 80s that there is to the 50s. That it was somehow all fake or fraudulent. In truth, the 80s weren’t a bad time to be alive.
In particular school was a much different experience, at least for the teachers.
I think they go back to the 50s because that's when families were nearly all single-earner, that is, it's a period chosen to counter the "Everything is so expensive you need two incomes" argument by pointing out that you could have a 50s lifestyle on a single paycheck today.
But if you're just talking about rising expectations, you don't need to go back that far. Even in the 80s and 90s, houses were a lot smaller, more kids shared rooms, more families made do with one car, people ate out a lot less, food and clothing was a bigger part of the family budget, etc. etc.
Yeah. I grew up in the 80s and 90s in a not well off family with 6 kids. Nobody had their own room except my oldest brother, who was like 16 when that started. We basically never ate out, even on trips to see my grandparents. We drove straight through or stayed with relatives on the way, never in hotels. Mom made most of our bread and cooked most things from scratch.
Other than a house, I live better than my parents did. And I've owned a house, but then moved to Oregon where house prices are absolute nuts. I make low 6 figures, as a single guy with no debt. I could probably buy a house, but it would be tight to get one I'd like, and no way could I get closer than my current 35 minute commute, because I work in a college town where the city thinks it's Portland and prevents most building unless you're a college student slumlord.
One factor that needs to be considered is civic society/social trust. The 50s had much higher levels of social trust and much stronger civic society, which lets you reduce your outgoings by potentially quite a bit -- e.g., if you can turf out your children from morning till evening and be confident that the neighbours will keep an eye on them, you don't need to pay for daycare, and/or you can have a smaller house without it feeling unbearably crowded. So while you might be able to afford the physical things a 1950s family had on a single income, you won't be able to live a 1950s lifestyle, because the society of 1950 no longer exists.
Re: the Friends theme song, here are the opening lyrics for the Cheers (1982-1993) theme song. It continues in subsequent verses with similar complaints. I think this is just sitcom vibes.
Only the first few lines of that actually made it into the show's intro, I think. I don't remember hearing the second half, at least. I just checked a couple videos of the opening credits, one from the first season and another from one of the later seasons with Kirstie Alley. In both cases the lyrics go straight from "Wouldn't you like to get away?" to the chorus about everyone knowing your name.
The specific complaints definitely got written into the song that got used, yes, but they don't seem to have gotten highlighted in the show's intro anywhere near as strongly as they did in Friends. Still, that you for posting that: I hadn't realized how downbeat the lyrics they skipped were.
"All those nights..." is the second verse, and I've definitely seen a video that includes it (from the original artist), but you're right that it's not in the show.
If you take that seriously it's a plausible reason for bad vibes in a decent economy: it would be a drastic cut in projected lifetime earnings that feels very external/difficult to fix.
> I hadn't seen this polling when this originally posted, but per Gallup ~60% of 30-49 year olds believe they will receive no social security:
And that's CRAZY optimism from the ~40% who think they'll still exist, and the 53% that thinks there will be no cut in benefits.
Our system is so profoundly "shoot yourself in the head" stupid that you only reach net neutral in terms of taxes paid vs consumed at ~$250k of income, a top ~5% income.
Let's see the math:
Net federal expenses: $6.9T - with more than 50% entitlements, and 22% interest on national debt
People in US: 340M
6.9T / 340M = $20,294 spending per person
But ~70M are children and ~100M aren’t working (retirees, students, layabouts), so there’s only ~170M working adults.
6.9T / 170M = $40,588 tax revenues needed per working adult
Okay, now the question is, what percentile of income do you need to be to hit this $40k taxes paid figure? We already went over that, it's top 5% or better. And that's net NEUTRAL, not actually paying anything positive in, you obviously need to go higher than that to reach net positive.
Literally 95% of people consume more taxes than they pay, and it's mostly entitlements.
And just OBVIOUSLY there's no way that can continue. There is not a snowball's chance social security will still exist for anyone <45 years old.
AND there's no chance there are no cuts to social security! Where are you going to move that 5%? To 1%? Make literally 99% of people net tax consumers? Make us pay ~50% in entitlements and ~50% in debt service, instead of the 52 / 22% now? Hilarious.
I agree it's silly to think there won't be any cuts, but it seems reasonable to think there will be sufficient cuts to stabilize the system and leave you with a nonzero benefit. I mean, there's no theoretical or accounting reason that couldn't happen, only political ones.
> I’d like to know more about what factors hold rents down for long-time residents. Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
I'm not sure how this is for other countries in Europe, but in my country (France), the raise of rents is highly controlled when the tenant is staying in the accommodation. It can only be risen up to a given percentage (0.87% for the 3rd quarter of 2025) once per year. Whereas the rent can be risen more freely during a tenant change, unless the accommodation is located in an area with rent control regulations in place.
But many owners actually don't choose to raise the rent at all. I have lived for several years in the same accommodation in two occasions in two different EU countries, and my rent has never risen, even during peak inflation (~15% annually). I guess this is because owners don't want to risk losing "well-behaving" tenants.
> I guess this is because owners don't want to risk losing "well-behaving" tenants.
Came here to say this. An existing known well-behaved renter is a source of, well, rent. A free paycheck. With an unknown new renter, especially since afaik no Western country allows landlords to turn away prospective renters based on demographics or other easily observable characteristics (that's illegal discrimination), landlords take a gamble with their property and raise the rent as much as legally allowed to to compensate for risk (property trashed, undesirables assembling and damaging the landlord's reputation with neighbors, not being able to easily evict badly behaving tenant), search costs etc.
I rent out a small studio which I bought when I was younger, and I keep the rent the same. Theoretically, I could raise it, but as you say, bad tenants are a thing.
My friend once unknowingly rented an apartment to a bunch of guys who started cooking meth there, and after some time caused an explosion and a fire. Such things happen.
A somewhat notorious murderer in our country (when still free) reacted to a rent rise by rigging improvised shotgun trap in his flat in order to kill the landlady. It injured a policeman during a search.
Such things happen and this is the risk inherent in every change of a tenant.
Since my comment was highlighted, I dug a bit deeper into the matter. First, ON GERMANY/SWITZERLAND, here are some numbers (from Gemini Deep Thinking, not fact-checked, but meeting my expectation even though I was careful to use a neutral prompt).
I claimed that stock rents (existing contracts) increased very moderately, while new rents absolutely skyrocketed. Gemini confirmed this. The following is inflation-adjusted for the period 2005-2025:
1) Stock Rents (Existing Contracts): -5% to +10% in Germany, -10% to -15% in Switzerland. Yes, those rents got cheaper after adjusting for inflation. Totally believable, my personal rent probably dropped inflation-adjusted by 20% over the last 15 years.
2) New Rents (Moving in): +40% to +70% for Germany, +20 to +40% in Switzerland.
3) Purchase Prices: + 120% to +160% for Germany, +80% to +110% in Switzerland.
So yes, if you want to move into a big city in Germany, you are screwed. Buying is impossible, and rents, version 2), are much less affordable than back in the days.
Here is another sanity check: 20-25 years ago, when I was in high school/college looking for my first flats, there was a rule of thumb that you should never spend more than 30% of your income for rent, because more would be unsustainable. Today, roughly 50% of the inhabitants of the top 7 German cities pay more than 30% of their income for rent, some people much more.
This is an important point. Rents are not like milk, they actually matter. People may notice if the price of milk goes up, and complain. But in the end, they pay so little for milk that it doesn't matter. But if the rents go up by 50%, that means that many people now pay 40% of their income instead of 25%-30%. That hurts massively.
It seems that Germany and Switzerland are on the extreme end because they have relatively strict rental control laws that make it difficult to increase existing rents. (Though the details and the impact on the market are different. German cities build very little new housing. Swiss cities build much more, but this is outpaced by the massive immigration into the country.) The spread between 1) and 2) apparently exists in other European countries, too, but is smaller.
THE US:
I know little about the US, so I have to rely fully on Gemini here. It claims that there are two types of US cities: rent-controlled (coastal cities like NYC, SF, LA, where >50% of apartments are "rent-stabilized", whatever this means) and free-market cities. It says that the scissors effect between 1) and 2) also exists in rent-controlled cities. For NYC and SF, stock rents have increased by 10%, but new rents by 80%. In free-market cities, stock rents went up by 25% and new rents by 50% (this latter number is apparently very volatile), so the gap is much smaller. Still, it rose everywhere in real numbers. And housing prices, which are much more important than in Germany and Switzerland, have also exploded: +90% national average, much more in coastal cities.
I cannot vouch for the US numbers, and I am not sure whether they conflict with the numbers that Scott gave in his post. Perhaps someone can resolve that?
Switzerland has reliable and cheap (compared to Swiss wages) public transport, so you can live half an hour from Zurich main station with trains every 15 minutes in peak hours and that covers quite a large area.
My AI-driven search (while obviously not definitive) confirms my prior, which is that the difference between established and new renters in the US is much, much smaller, presumably because of much less regulation.
Combining point 9 (about Calvin grandparents) and point 4 (about china growth level), is it possible that people have the reached the end of hedonistic treadmill, saw that it still sucks, and thus got depressed? In Calvin's grandparents time, while it still sucks, there's still (high) hope that their grandchildren would enjoy much higher QoL than they had. But now there doesn't seem to be a path for any children to have higher QoL than their parents. Especially considering climate change where we're forced to reduce our QoL instead.
Thus, growth rate instead of level, but applied to QoL.
It's not known as "the nation of renters" for nothing. Because there are so many renters, it's politically a good move to improve renters' rights so there are strict rent control laws.
Raising the rent for an existing tenant is limited to a government-approved amount; for new tenants you have to tell them the previous rate but you have a bit more leeway.
But you wouldn't live "in the city" unless you could afford it, you'd live within half an hour commuting distance using reliable Swiss-standard public transport - or, because the single biggest landlord in the city (at least in Zurich) is the city itself, you might get a flat in a suburb where your rent is reduced based on your income.
“For young adults in particular, I don’t think the bad vibes are at all new. My go-to illustration is the first verse of the theme song for Friends, which started airing in 1994:
‘So no one told you life was gonna be this way / Your job’s a joke, you’re broke, your love life’s D.O.A., / It’s like you’re always stuck in second gear / When it hasn’t been your day, your week / Your month, or even your year’”
The first line is key here. “No one told you life was gonna be this way.” That means people were optimistic! And the beat and the ultimate message of the song were sappy and triumphant. You have friends, that’s what counts. I don’t think anyone who saw Friends would think of it as a dark or pessimistic show.
A modest proposal: the chart at the beginning of section 7 should be ignored entirely. The underlying question is kind of garbage. According to the graphic, they asked: Thinking about an annual salary (e.g., the money you earn at your job per year) and an "all in" dollar amount (e.g., your overall net worth), how much money would it take for you to be financially successful?
So am I supposed to answer with an annual amount or a one-time amount? Is this instead of or in addition to my current financial situation? (If the latter, then given that older folks tend to be better off in terms of both annual income and net worth, then of course younger folks will give a higher number.) And, more importantly than how I *should* answer that question, how did people *actually* answer and how consistent were the interpretations from person to person?
[edit: removed a typo from my transcription of the question]
You emphasized it, but the graph showing sentiment swinging so widely between Presidents more or less invalidates the whole exercise of economic sentiment for me.
The 35% of the country that is Republicans is essentially worthless when it comes to economic sentiment. The 30% that are Democrats were better prior to 2021, but not by all that much. And it seems they’re just as bad as the Republicans in the Trump era
How can one view these surveys as anything other than completely worthless under those conditions?
I'm also more confident on the vibesecession proper 2022 - 2024 and attribute it to *the media and the phones*
Why?
You said it yourself:
"I hadn’t considered the bad experience → complain online → algorithm shows you pessimistic content trapped prior loop."
In 2020 - 2021 we had the pandemic first, and the inflation later. It's possible that "The Algorithm" for most people became stuck in "pandemicinflation" mode for well over two years after it was over.
>In 2020 - 2021 we had the pandemic first, and the inflation later. It's possible that "The Algorithm" for most people became stuck in "pandemicinflation" mode for well over two years after it was over.
TBH I think we should consider the possibility that the upheavals of 2020-21 have genuinely traumatised a lot of people. Big, unpredictable changes in your life over which you have no control can have that effect, after all, and traumatised people often get mentally stuck in whatever circumstances first traumatised them.
I will have to repeat myself from under the original post, but the reactions to the 140k post have been strikingly bad.
Now, I haven't read Tyler Cowen (paywall), so that's one possibility that a better response exists. Failing that, Hopperdahl's number crunching is the most detailed I've seen, and while he doesn't provide a standalone final figure, I don't think his revisions would bring the number down to 30-60k you cite, I think I'd eyeball it around 70-80k which, while admittedly significantly lower than 140k, should still be enough to make Green's overall point stand. By the follow-up he pretty much admits Green's concerns are in fact valid. (His position - surely it can't matter that much, the range of the effect is smaller and his fellow number-crunchers are certainly taking all this into account already. Needless to say, I think it's overly optimistic on his part. But he, for one, can't be accused of not engaging with the actual argument, props for him.)
But then, there's the rest. Noah Smith is... I believe the term is "not even wrong". His response to an observation that some things have become necessities without which people fall into an unproductive underclass is... that people can in fact afford those things. I mean, no shit, Sherlock? If they didn't, either social norms would have to be revised to accommodate the median person no longer affording them (with either the government or employers taking over the costs of housing, transport, health- and/or child-care), or we'd witness a total societal and economic collapse.
Others, like Yglesias, are arguably even worse, nothing but vague gesturing towards Green being debunked and silly and needing not be paid attention to. (Yglesias specifically then immediately follows with a thesis that's just perfectly consistent with Green and his observation that childcare alone eats up a significant fraction of benefits from families' second incomes. I mean, come on.)
But Baumol effect as explanation is just icing on the cake here. (And, honestly, Lincicome's argument, at east the part you cite, doesn't differ much from Green's.) Obligatory reminder - Baumol effect is just another name for Labor Theory of Value. Or rather, it's Labor Theory of Value reformulated as a localized phenomenon to make it palatable to mainstream economics. But when it's used as a go-to explanation for system-wide effects, it literally becomes just Labor Theory of Value, period. It's as if, you know...
As Freddie DeBoer wryly observed under the original post (paraphrased from memory) - if only a certain German gentleman already explained all this 150 years ago. To which I can add, if only a certain Russian gentleman already predicted, almost 20 years ago, that vibes would sour in the 2020s (using an economic framework borrowed from the German gentleman and embedding it inside his state-of-the-art mathematical models). Maybe, just maybe, it's a positive proof that their framework is just better anchored to underlying reality?
And I don't even consider myself a Marxist, a fellow traveler certainly, but I have approximately zero attachment to any parts of Marx's framework, and I'd be willing to ditch them the moment they prove useless or misleading. But when I look at an example like that, the only reaction I can have is, oh my god, there's just no competition, followers of the alternative paradigm just aren't mounting any real counterargument. Even when responding to one of their own (I don't know much of Green, but he didn't strike me as particularly leftist) laying the reasoning down in very simple, straightforward terms, they just ignore it, one way or another. It's not even that their arguments are wrong, it's just that, fundamentally, they're about something else entirely. It simply doesn't feel like a meaningful pushback.
I know I'm on enemy territory here and have little chance of convincing anyone, but at least please get this - you are very much not convincing us either.
With respect to Mr. Green's post and the responses: you say they are striking bad, but I don't understand why you think that. You seem to admit that his $140k figure was overstated by a factor of 2, which isn't exactly a small error. If the cost of a "participation ticket" in America is $70-80k for a family of four, I don't think Green's point still stands at all. The median family of four in America has closer to $120k of income. So the vast majority are above the cutoff. If his point is that a significant minority of Americans are poor in some relative sense, that's surely true, but it's also always been true, and he presents no compelling evidence that more people are poor now than we're in 1950 (or whatever your reference point is). The official poverty line and Green's own "participation ticket" concept aren't really comparable, as the major responses adequately argue.
Yes, Green's "participation ticket" and literally poverty are two different things. But he never says they're the same. What he's saying is, we're using outdated notions of what constitutes immiseration because we keep classifying things like cars, mobile phones, childcare, etc., as luxuries without noticing that they've become necessities (saying people lived without them in 1950 is meaningless - 1950 job market didn't operate under an expectation they'll have them). And if they're not necessities in the "literally can't survive without them" sense, it's only because of a welfare safety net that prevents you from literally starving or freezing out in the cold. Now, the net is a good thing, of course - but, in a proper nominatively deterministic fashion, it keeps you in. It's not only that it's hard to get out because you'll just outright lack things necessary to get a better paying job and get out, it's that it's designed in a way that discourages trying - with a large range of income in which even if your earnings increase, your situation just doesn't improve at all. And because people - at least otherwise healthy people - aren't literally starving or freezing out in the cold, the better-off keep pretending there's no problem at all.
So you have a large number of people who are basically fucked for life (and berated for not trying even though they often have approximately zero incentives to try), you have an even larger number of people who are one unfortunate accident away from getting fucked for life, and all of those people understandably feel bad about the place they're at. (But I guess at least they're not in danger of literally starving and freezing in the streets. Yet.)
I don't think I'm even directly referencing Green at this point, none of what he's saying is new, what's admirable about his post is that he's made an effort to explain it from first principles in a way that would be hard for people like me who have alrady internalized a framework that makes most of it pretty obvious - and yet the explanation gets completely ignored, because people are satisfied that pointing out he's using "poverty" wrong or that his numbers are off suffices to rebuke him. No, no it doesn't.
(By the way, I have not admitted Green's numbers are off. All I'm saying is that Hopperdahl - the only response I've seen that bothers to retrace Green's calculations - arrives at a number that's way over the 30-60k range Scott cites. What's the correct number, I don't know, I'm not in a position to decide, about the numbers or indeed the entirety of Green's factual claims. I live on the other side of the globe, FFS. All I can do from my vantage point is observe that one side has a coherent argument making factual claims - and no, the claims aren't just the numbers, they're also about the entire systemic mechanisms at play - and the other side does nothing to address it.)
You are incorrect that the responses to Green's post didn't attempt to rebut his specific numbers or make coherent factual claims. Responses from Scott Winship, Jeremy Horpedahl, Noah Smith, Matt Yglesias (the ones I read) all did that. I don't understand how you could read any of those essays and not think that they rebutted his specific factual claims.
I'm not trying to say that Green's "participation ticket" concept is the wrong thing to look at and the poverty line is right. His core argument was that the amount needed for the participation ticket is much more than most people make (140k vs. 85k median household income). The rebuttals correctly pointed out that the quantitative argument for that is not very good. In fact, under a more reasonable set of assumptions, the participation ticket costs quite a bit less than the median family makes (70-80k vs. 125k median income for a family of 4). Of course, many people are poor and struggle to make ends meet. But it's not reasonable to claim that most people are poor, or unable to participate in American life, or whatever.
I'm not trying to argue you out of your entire worldview! I'm merely trying to convince you of the incorrectness of your original statement: "the reactions to the 140k post have been strikingly bad."
>You are incorrect that the responses to Green's post didn't attempt to rebut his specific numbers
That's... not at all what I said. I said they argued against his specific numbers in lieu of addressing broader structural issues. (Which can't really be tied to some specific cut-off, it's not like, e.g., earning 80k makes you vulnerable, but 81k already makes everything okay.)
And, again, I really, really insist on distinguishing responses like Horperdahl's (who made a serious, honest criticism that just ultimately falls short of being an actual rebuttal) from e.g. Smith (who spectacularly missed the point), and further all those Yglesias / TheArgument type people (who themselves had little criticism to say directly, but use the existence of, e.g., Horperdahl's response as an excuse to make self-satisfied noises about silly people who dare to question their narrative).
I realize this may not be coming out clearly because, once I argue that the responses fall short, I need to refer to the strongest arguments - i.e., the ones made by people like Horperdahl (whose name I kept misspelling, sorry!), but my real issue is with Smiths/Yglesiases.
(Scott Winship I didn't read, but I'll check his argument when time allows.)
I see, I misunderstood what you were saying. I guess I'd say that Mr. Green's post contained a large number of specific, factual claims, and these were being used to support an overall thesis about the structure of American society. I think that debunking a large portion of his factual claims is a productive response, and I think all of the critics mentioned did some of this debunking (and some of them linked to the debunking work of others, but there's no shame in doing that). It's understandable to leave out broader structural issues and focus on the facts given by your interlocutor when the facts are largely wrong.
I am not wedded to the validity of particular posts by Smith, Yglesias, or whoever. But I do think that they contained lots of good counterarguments which on the whole Green did not rebut very convincingly.
The Baumol effect is not "the labor theory of value". Marginalism destroyed the LVT. The Baumol effect discusses changes over time, whereas the LVT was supposed to be a constant.
>The Baumol effect is not "the labor theory of value".
...yes it is. They literally say the exact same thing. You're free to try and argue otherwise, but I assure you it'll become obvious once you actually think about it for a few seconds.
Some shows get tweaked in syndication for the stations to squeeze in an additional commercial or two. This could include a truncated intro or slightly-faster playback (I swear that everybody's voices on Friends are higher-pitched in syndication than they were during the original run).
"But an alternate interpretation of this chart is that every generation believes success is ~$500,000/year, inflation-adjusted to the value of the dollar when they were in their early 20s and forming beliefs about success. This is a bit of a stretch - surely Boomers have had plenty of time to update on the value of a dollar since their 20s, especially since many of them are still working and collecting salaries. But the math works out."
The math very much does not work out. Maybe between Zoomers and Boomers. But there was not deflation between Gen X and Millennials. The period between Millennials and Zoomers was, on average, mostly a low inflation period (first Millennials reached 20 in 2001, the 2000s and 2010s were low inflation) so the jump there is unexplained (the big sustained inflation was the late 70s, mostly between the boomers and Gen X on this metric).
“why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.”
I think this is the case because people view rent as money straight down the drain, but an equal mortgage payment as at least partially building wealth.
So people will accept a $3k/month mortgage for a house they own, but won’t accept the $3k/month rent for the same house. Instead, they’ll pay $2k/month renting an apartment, all the while wishing they had the house.
The upside of owning rather than renting is somewhat smaller for apartments since you have to deal with subdividing ownership of the building itself and responsibility and decision-making for its upkeep. Condos and co-ops are a thing, but they aren't quite as clean as either "it's your house and you can do what you want with it" or "you pay your rent and the landlord is responsible for maintenance".
Restaurateurs are people still living Calvin’s grandparents’ life, it seems to me. At least, that is the tale that emerges whenever a long time area restaurant closes to much dismay (usually) because the owners are tired and ready to retire. And there are surely more of them than ever since none of you want to bestir yourselves to cook dinner* anymore. Spare some compassion for them, I guess.
*Cooking appears to be strongly associated with the bad old days.
I think the vibecession is dual-faceted. There are those who think the economy sucks because of the opposing political party (those who bought a house before 2020), even though this has no connection to reality, and there are those who think the economy sucks because of housing (those who bought a house after 2020, or have yet to buy).
For example, I work in a blue-collar environment with 20-60 year olds. The old people and the young people all feel the same about the economy—that it sucks. The old people think it sucks because of the liberals, even though they have 3,000 square foot houses with a tiny mortgage, campers, multiple hobby-vehicles, and 4 kids. The young people think it sucks because they either just bought a starter home for a higher mortgage than the old person’s 3,000sqft home, or because they can’t afford a house at all.
The catch is the young people will also blame the housing costs on the opposing political party.
So at the end of the day, you have one group who lives lavishly but sees $10 eggs and gets mad and blames their political opponents, and you have another group who doesn’t live lavishly and is mad half their income goes to a small house and also blames their political opponents.
The first group doesn’t actually have a real problem, besides the cultural/political problem. The second group doesn’t really have a problem either compared to a 1950’s equivalent—but they’re not comparing themselves to that group… they’re comparing themselves to the current day peers of theirs that lives twice as good on the same amount of money, just because of timing of a house purchase.
One comment I haven't seen expressed much re: inflation is that the increase in prices applies pretty uniformly to all, but wage inflation is not uniform at all.
Some sectors had much higher wage growth during the high-inflation period of the early 2020s, and also those who switched jobs during this period received higher raises than those who stayed at the employers.
Is a 1950s lifestyle available? Do livable small houses exist? I don't think you can get health insurance where they'll splint up your leg, but there isn't so much of the machine that goes ping.
What about precarity? Were expenses enough lower and social networks stronger so that there was less risk of becoming very poor?
I do think scams have become more pervasive. There's a higher risk of losing it all, but tell me if it's just that I read about scams so the algorithm feeds me more of them.
There's that bit about _On the Road_ about how a healthy man could just head out into the world and get enough manual labor to support himself. No credentials or application dance with HR needed. Or is that too early to be part of the vibesession?
"I mean, to shop at a nice grocery store without worrying too much about prices you should probably be making at least 200k"
Jesus. Before I finished my PhD I was making 70k and never had anything resembling this thought. Granted, I also tend to buy what's on sale that week without thinking too much about it much either.
There's a reason why the Fed focuses on PCE inflation instead of CPI inflation. That answers part of the question. But the question will never be entirely answered because there is no full answer, and that's because there is no single "basket of goods" for which to compare prices. It is fundamentally impossible to compare the basket of goods in 2025 to the basket of goods in 1995 because the 2025 basket has an iPhone in it and obviously the 1995 basket does not; and the iPhone is a radical enough concept by 1995 standards that a hedonic adjustment of the Zack Morris cell phone just ain't gonna work.
So you choose the least bad index, which is PCE inflation (again, that's why the Fed uses it). CPI is used by others as a matter of convention, even though it's a dirty little not-really-secret in economics that CPI has lots of problems that have already been addressed (namely with PCE). Hell, the problems with CPI are even taught to undergrads. (Related note: be skeptical of metrics that deflate over time using CPI, because CPI tends to overstate inflation and that compounds over time.)
But we all know that no one listens to economists anyway, so I'm yelling at a digital cloud.
(1) Maybe it is social media. This would line up well with the timeline, with the `great vibepression' starting right around when social media becomes omnipresent. Three potential causal mechanisms (which could interplay) (a) people are constantly comparing their actual lives to the curated image of perfection presented by their `friends,' and feeling like they are coming up short. (b) negativity bias in social media algorithms feeding people a constant drip of `the world is going to hell in a handbasket' news stories (c) a culture on major social media platforms (from facebook to slack) that, in my experience, rewards doomposting with likes and supportive posts and has any optimistic posts deluged with `don't you realize how terrible things are'/`you are a bad person for not feeling bad about how terrible things are' responses.
(2) For the postpandemic period specifically, I think AI is a major contributing factor. ChatGPT came out in 2022, and shortly after, normies that I encounter in every day life started worrying. Not so much about AI killing us all, but about the more prosaic worry of `what if AI takes my job' and `what careers will still be available for my kids.'
"Obviously nothing real changes the exact second a new president is inaugurated, so people must be using questions about the economy to express their overall happiness about the state of the world."
I don't think this follows. Imagine OpenAI announces that the latest GPT is now completely capable of replacing office workers and they're going to roll it out in two months at which point every white collar worker will lose their jobs, and because this is a convenient hypothetical, everyone believes them. A lot of people's sentiment about the economy is going to get much worse even though they're still employed today, "an economy where I have a job for exactly two more months" is a pretty bad economy!
If people think the new president is about to usher in a fascist/communist utopia/dystopia that saves/destroys the economy, well they're still wrong but they aren't obviously substituting happiness answers for economy answers.
I think this is correct. Something beaten into every economics grad student (and should be beaten into undergrads as well) is the fundamental importance of expectations. The very real nature of self-fulfilling prophecies is a bit scary.
One interesting implication of the “negative media sentiment is driving bad vibes” hypothesis is that it seems to suggest the situation could be improved by countervailing positive media sentiment. Is the quickest solution to the vibecession a Soviet-style state propaganda campaign, reminding us all of the inevitable triumph of our system?
I’m being facetious – I don’t think that would work because citizens eventually come to distrust the propaganda, just as they did in the USSR. I also don’t mean to suggest that the data being discussed in the article is propaganda, but one can’t help but notice that it is discounted by the citizenry in a similar way to Soviet economic data…
I find it interesting that the economy seems to involve at least a little hyperstition, such that widespread belief in a good economy, regardless of the source of the belief, could actually help bring a good economy into being (and vice versa).
My experience probably will not generalize, but here it is anyway. I am a full professor at a state university working under a union contract. Within the contract there are salary step increases and also cost-of-living increases. The COL increases are chump change basically put in there by the state so we don’t immediately strike. I hit the maximum contractual step in 2013. Objectively, I am paid a decent wage in an area with a low cost of living, but I am far from rolling in money. However, since COL wage increases are all less than inflation, my real salary has decreased every year for 12 years. It’s hard to feel good about that even though I don’t struggle to pay the mortgage.
“Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?”
Spoken like someone who has never rented (or at least hasn’t in a long time). It is very common for landlords to avoid large rent increases in order to keep reliable tenants (ones who pay rent on time and don’t damage the property).
The reason people mostly don't rent houses is because if you own a house and are renting it out to someone else, you want to charge them a rent that is high enough to cover the mortgage that you pay on the house. This means that, for a complete house, rent is almost always higher than the mortgage would be. Which makes it ridiculous to rent a house, given that the tenant is paying the mortgage plus a profit for the homeowner.
Why doesn't he think he can find a tenant willing to pay more?
I could see some circumstances where it might make sense for a landlord to charge less enough to make it worth renting instead of buying, but I think the general idea holds.
I have a lease; any buyer would be in the same position my current landlord is.
As for why he didn't sell it rather than let it out in the first place, perhaps the aforementioned appreciation provides sufficient ROI even after accounting for the rent not covering the mortgage.
>"Why doesn't he think he can find a tenant willing to pay more?"
There's a basically-identical house across the alley that had been rented but has now been vacant for over a year.
>"I could see some circumstances where it might make sense for a landlord to charge less enough to make it worth renting instead of buying, but I think the general idea holds."
Rents below mortgages for a given house are common in & around Seattle.
My working theory is that the expected rent growth rate is high enough that the NPV of future cash flows, when financed at a low fixed rate, produces a current mortgage payment in excess of current equilibrium rent.
If it was just my landlord, then irrationality might could adequately explain the discrepancy, but something like the above almost has to be the case in order for rent < mortgage & appreciation to coöccur broadly.
For people (like me) who expect to move away long before the lines cross, it makes sense to take advantage of the (relatively) cheap rent in the meantime. Bonus: no risk of sudden large mandatory expenses (e.g., roof repair/replacement).
I'm making about $200k now, supporting a family of 5, including a stay-at-home wife, and I have so much money I don't know what to do with it all! What the hell are people spending their money on? I've felt like I'm so successful I could practically retire early since I passed about $140k...
Is this a geographic thing? Seriously, people, how are we living in such entirely different worlds?
We haven't needed to keep a budget since before we had kids. We eat nice food. We regularly spend $200 on a date night between babysitting and going to a nice restaurant. I still put 15% into my 401k every year and pay off the credit card every month. We are *not* frugal people! I could lose my job and not feel worried about it for over a year. We bought a 'cheap' house but we've spent almost $300k on improvements and additions over the years...
Seriously, wtf, people. My current income is 90th percentile for the country. I'm living high on the hog. How the hell is "successful" only the top 1%?
Your comment could almost have been written by me! I am also extremely comfortable supporting a wife and five children. Only difference is I'm closer to $140k. But I, too, eat out often and save over 10% of my income, and I still feel like I have lots of money left over.
You should consider starting a business or becoming a landlord. You've got to find an interesting way to use your money in a way that is actually useful (instead of an expensive hobby). And if you aren't giving at least 10% of it away, you should strongly consider that.
A lot of it is geography, I'm sure. Some of it must be that you just don't want to make some of the expensive purchases others do. Maybe if you and your wife both had $100,000 Lexuses and took long international vacations every 3 months, you'd feel less flush.
Put me on this list too. Combined household income (in UK) translates very close to the 200k US..... and I'm currently "comfortable, if not outright well-off". Similarly live in a house purchased for around 400k in US dollars and in "high cost of living" south-east UK/around London area, 2 foreign holidays a year, student loans paid off etc etc.
I see a lot of people in my income bracket buying designer clothes, or luxury brand cars (or more often leasing them), and I don't do this. We don't eat out very often, don't shop in the high-cost supermarkets etc etc. but I'm not budgeting here, if we want something we just buy it (usually from Amazon).
This is hardly being "frugal" so much as (in my mind) the quality differential between mid-range and top-end stuff (~20%?) not being worth the price differential (~100%+) so I don't go nuts and stay with the nice mid-range stuff.
On track for super-early retirement.... who on earth is earning $199,999 and considering themselves "just below the poverty line" or "just below the participation stakes line"?
I live in an area that is not below average in housing costs. The survey was claiming to be nationally representative.
I guess I am arguing for the "all the influencers in high cost of living areas are dragging down the vibes" interpretation here. "I can't be financially secure on $200k" is only plausibly a problem in half a dozen metro areas. But somehow a *national* survey has people thinking that's the standard...
Sure. But Gen Z are still mostly teenagers. Maybe they are anticipating (many of them) living away from where they grew up - at least for a few years. The early twenty something year olds might also be in those big cities or expensive college towns and that’s what they know right now.
Not really meaning this as a full rebuttal, but you made me think of it. It just feels weird to me how these conversations/vibes seem to completely ignore... lots of smaller cities?
It's not like your only options are living on a farm or living in San Francisco... There are dozens of cities no one would call a "small town," which are full of jobs and successful industries, and in which rents are still reasonable. Maybe not as cheap as they used to be, true, but not unobtainable, especially in areas that have lots of land to expand into.
I mean, I live "in the country", but I'm really just outside the suburbs of a top 20 metropolitan area. Our housing prices have gone way up in the last 20 years, but you can still buy a home big enough for a family of 4 for $200k. There are > 400 software engineer listings on linkedin I could drive to. I feel like most metro areas are like this...
I hope that Gen Z doesn't feel like there's only 2-3 places in the country they can move to to have a career...
“Question for Aristides and others: why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.”
It’s a combination of supply and landlord quality. There are a lot more apartment rentals available and especially if you have a short moving window, it can be hard to find a house to rent, but there’s always an apartment to rent.
I’ve rented 6 apartments and 2 houses. After my experience, I would be even more hesitant to rent a house with a child. It is extremely difficult to get single house landlords to repair anything. My house rentals have had huge mold issues, AC breakdowns, plumbing backed up, and many other problems that I’ve never seen with apartments. The mold is why I did move from a house rental to an apartment rental when I had my kid, based on all the potential health issues mold can cause long term.
If I owned the house, I would pay to fix any of these problems with it, but it’s not worth it when I can get kicked out any year. Apartment Complexes have large economies of scales that makes it more profitable to make the repairs, but single house landlords have been extremely cheap in getting anything repaired, in my experience.
That makes sense. On the other hand, I rented a house for a long time where the landlord lived upstairs. The yard was ours with a few exceptions. He was great at staying on top of repairs and maintenance, probably because he lived there! But I think that you may just have to be more sensitive to the type of ownership and management when renting a house.
Follow-up to Kyla - economic sentiment data actually started breaking around COVID (per usual, COVID ruins everything). Don't know specifically what happened, but a number of prominent surveys (e.g., U-Mich, https://en.macromicro.me/charts/110438/us-michigan-consumer-sentiment-index-within-political-party) started showing huge partisan splits in what were supposed to be generic economic questions. Split was considerably less pronounced and/or non-existent prior to 2020. So from the data side, that's a big chunk of what's doing on.
Comments about how middle class people lived in the 1950's:
People generally were very frugal. They were coming out of a very long depression and years of wartime rationing. They darned socks, turned collars, patched knees and elbows, handed down or swapped clothes that were outgrown, wore shabby old clothes when they worked outdoors, and used the clothes that were completely worn out as rags and patchwork. They made a lot of their own clothes. They re-soled old shoes. They grew a lot of their own food and pickled, canned, and otherwise preserved it in various ways. Adults and kids were expected to clean their plates, and any scraps - stale or leftover food - was fed to dogs or livestock. By the way, pet dogs and cats that were sick or injured got well or died on their own. If they were suffering they were put down. Vets were for valuable farm animals and horses.
Middle class people knew they were not poor because poor people were highly visible. They lived in tenements or tarpaper shacks without indoor plumbing, and their kids needed shoes. Poor people did not own cars or televisions or washing machines. Middle class people were constantly reminded by daily that they were much better off than the poor.
Doctors at the time routinely price discriminated. They knew their patients' circumstances from visiting their homes and seeing them in the neighborhood and charged accordingly. Today there are hundreds of drugs that cost more than $100K per year. Assume that is the equivalent of $10K in 1950. That a drug could cost more than $10K a year would have been unthinkable in the 50's. No insurance plan would have covered it, and even the handful of super rich people who could have afforded it would not have bought it unless it was a true miracle cure.
The negative vibes that struck me was when my middle-school-aged daughter came home talking about it.
"Why should we have kids? There are way more people than the planet can take anyway."
"Everyone keeps saying the world is completely messed up and it's our job to fix it, and I don't want to deal with that pressure!"
She's not on social media. She's picking this up from teachers and official media specifically aimed at students, largely in the form of the Doomerism/self-flagellating brand of environmentalism. Any positivity she has about... humanity... comes from us arguing with her at home... And that's coming from a pair of libertarian parents who are about as cynical of government programs as you can be.
If she's picking those vibes up this strongly at *a rural public school in the midwest* ...
Lots of time spent on the Founding Fathers and the revolution. Washington mostly gets excused for being a slave-owner. Jefferson comes out a bit worse. She went a little deeper into that because she likes Hamilton the musical.
They haven't done any US history post-civil war.
Civil war was definitely about slavery.
I get don't get the impression that the Indian Wars have gotten a ton of time devoted to them.
In general, though... she's had all of two what I would consider "useful" years of history instruction total. Elementary school just doesn't really teach it.
In my own experiences, the vibes are bad due to two reasons First, the real loss of purchasing power in a small but highly salient set of expense categories like housing Second, the increase in uncertainty about the future.
For me, I saw housing that would have been an easy comfortable purchase for me in 2019 become unaffordable in 2022. Given how much housing affects everything else (community, schools, commutes, etc) this is a huge effect.
But the second one might be a more important factor. It seems that over the past 5 years, we are increasingly living in a more 'tightly coupled' system where the amplification has been turned way up. small deviations in sentiment create positive feedback loops which cause the cost of certain goods to skyrocket overnight. We saw this in the pandemic with toilet paper. Why toilet paper, of all things? who knows. We also saw this with eggs and beef. Eggs eventually came down, but beef has not really. Recently RAM/commodity computer hardware and silver are doing the same thing. Will they be more like eggs or beef? Who knows (unless I can find the correct expert analysis which is increasingly difficult). Beyond market dynamics there is obviously the pandemic itself, the advent of AI, which might or might not wipe out all white collar jobs, the shock and awe tactics of the Trump administration, possible war with China (by 2027?!)
Basically, in 2019, I would have passed the marshmallow test with flying colors. Today, not so sure. It seems that any affordable good or service today can instantly become expensive or unaffordable, or unavailable with little to no warning. This makes planning for the future more difficult. I find myself increasingly likely to jump at opportunities for near term gain with less thought for the long game. This is personally stressful for me, being raised to see "delaying gratification" as a kind of a virtue, but it is also the knowledge that the decisions I make must be both correct and timely, rather than just correct. My decision to buy a home in 2024 rather than 2023 or 2022 meant I paid at least a 50k premium to obtain a house that met our requirements. That money may as well have been lit on fire. I carry a larger emergency fund than I would have in 2019 even though I know this is hurting the long-term gains in my retirement fund.
I was just reading your old post Burdens (https://slatestarcodex.com/2014/08/16/burdens/) yesterday, and thinking about how someone who feels like a drain on their current community should consider making a radical change and move to a community where they wouldn't be a burden. I also wouldn't want to take up J Nicholas' butcher's offer but that type of thing might be fulfilling for someone who didn't have anything else going for them.
Two comments on the comments re the "vibecession": First, their is little to no discussion of debt burdens. In the 50's - 60's (when I grew up) debt was a much smaller component of purchasing power; now it is pervasive. Student debt was, if not negligible, a much smaller part of our generation's burden, and a non-issue for much of the population. High and floating credit card debt is definitely a stressor. Folks living paycheck to paycheck find themselves putting "extraordinary" expenses on credit cards, and servicing that expensive debt for years. This is by design. Legislation making student debt non-dischargeable in bankruptcy has aggravated the problem. The second issue is job security, or the lack of it. Frankly, a growing population that is ever more productive is a process that cannot continue indefinitely. Stein's law says that anything that cannot continue forever will stop. Since we value productivity, we are beginning to compensate by not reproducing at a replacement level. Perhaps if the fruits of productivity were shared more equitably we would feel better, but the pace of change is difficult for most people, who value stability, to endure.
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
From my experience of renting in the non-rent-controlled segment of the SF market: only the big corporate-owned apartment buildings are willing to continuously raise the rent to match market prices.
Private landlords are much more interested in keeping someone there that won’t wreck the place and will pay reliably, since most of them are doing the job part-time.
The corporate buildings have a leasing office and a team helping them continuously bring new residents in. Private landlords don’t.
We ended up in a very below market apartment for years in downtown SF, because our landlord only ever bothered to raise the rent once, when his condo fees went up. Both we and him were happy in that arrangement.
We only moved when our first kid’s impending birth forced our hand, at which point he listed it for something like $1000 more.
it is an aggregate measure used by binning different cost categories. These cost categories are based on a hypothetical average person. However, we don’t spend equal proportions of our incomes on these bins. For low wage earners, groceries is a higher proportion of your budget, therefore, if grocery bin is 4%, but overall is 2.5% because things like electronics have been getting cheaper, then you might be experiencing more inflation than someone wealthier than spends more money on bins like vacation travel and skis, etc.
I suspect some degree of vibcession is genuine decline of living standards, and telling poor people they are wrong when you use metrics based on means might blow up in your centrist face. Also, partisan tinted glasses seem to have big effect.
Yes, that’s a big big reason. Your particular numbers are off. I think food is 10% of cpi but the bottom decile pay 25-30% of disposable income on food. Even worse they can’t really substitute for cheaper products, as they are buying the cheapest already.
That laptops face more bells and whistles doesn’t matter to them at all.
A comment on Golden Feathers comment that ‘populism’ in the Nordic, etc. countries look "more like ‘MAGA" (which GF relates to immigration patterns in the EU that I don’t dispute).
Speaking as a dane (now in the US), what is described as populism is IMO a realistic assessment of what it requires to sustain the cultural cohesion upon which everything else rides in a small country. Importantly the response is governmental, and is more data driven than ‘vibe’ driven. Denmark is clearly aiming to quantify and deal with destabilizing factors in a practical and fair way. So the government is simply doing its job, quite transparently, and functions as a stabilizing center.
When countries do not acknowledge perceived problems and disallow open discussion, there is genuine frustration, which amplifies a sense of things going badly, and worst case interpretations and overreactions get room to thrive. The political graphs to me indicate that bad vibes are related to a lack of stabilizing political centers (among many other things - thanks for the deep dives).
I find it somewhat ironic how Scandinavian-built Minnesota got expertly welfare-scammed by the same Somalis who are disproportionally on welfare in Scandinavian countries as well.
As you say, some institutions cannot really survive the loss of cultural cohesion upon which they have been built. Welfare states are one of them.
So DK determines that recent immigration patterns has resulted in ghettos with different rules and higher crime, and determine that some immigrants become a disproportionate burden on the social network (which they like and all contribute to). And the Social Democrats, not the far right wing, conclude that immigration and ghettos have to be managed. And unlike Minnesota, the problems are spelled out, not danced around, so it is more about system, not ethnicity. And frankly basic competence and transparency.
Given that the system depends on everyone playing by the same rules it is not the best system for all places. This doesn't mean the successes achieved are suspect, one can simply note that those successes were achieved under very specific conditions, not easily replicated.
So not sure I get the irony. Sure welfare states are fragile, but no state should take their orderly continuance for granted.
I find it nearly impossible to believe that real nyc rents are unchanged between 2010 and 2023—or if they are, it’s a function of supply increasing and prices falling in the outer boroughs. Manhattan rents have at least doubled since that time, and cpi is +40%. Chat gpt says median Manhattan rents are up 90%.
Anecdotally, west village rents are up that much since 2019, let alone 2010. I think measuring “nyc rents” is a bit fraught in this way—the product is changing for the worse, but unlike when it changes for the better, you’re not doing a hedonic adjustment downward.
One comment on the housing part of the overall economics: I realize that you've already included the overall housing market in the analysis, but one contributing factor to underbuilding housing, at least in California, in not just NIMBY, but red tape. At nearly a year after the Palisades fire, only about 13% of homes have received _permits_ to rebuild ( https://www.latimes.com/california/story/2025-12-17/after-rocky-start-rebuilding-in-palisades-altadena-is-gaining-momentum ) - never mind actual rebuilding... And restoring the status quo ante shouldn't trigger NIMBY restrictions, since the burnt homes were, after all, previously there.
I started seeing the Baumol effect everywhere after I learned of it a few years ago. He should've won a Nobel. It should really, *really* influence policy making around health care and education. I've heard Seth Moulton talk about it and, not surprisingly, he has endorsed some of the ideas behind Abundance.
On China, Peter Hessler was a teacher there in the early nineties and again in the late 2010s through COVID. He has been surveying his students for decades about quality of life and expectations, and he discussed some of the trends with Yascha Mounk in June.
While I suppose all lifestyle spending is marginal spending, vacation/travel seems like the most common thing to sit at that cusp of your last few thousand dollars of income. Probably because unlike most things in our lives these days, it hasn't been converted to XaaS, you're pretty much always choosing whether and where to travel based on what you can afford as a one-shot expense. And it is highly flexible, you really can do a large variety of trips that involve the same destination or activity and could vary 10x in what you spend on them.
So the difference between feeling like you're keeping up with your cool young 25-39 y/o peers in the professional-managerial class versus feeling left behind could actually be really small. You swing an extra $10k in income per year when everything else is already covered and you can wring every bit of Instagram travel bragging you want from that. On the flip side, if your salary stagnates and inflation and housing costs eat away at disposable income, that's the first thing you scale back because it's not built into a budget and it's easy to adjust by e.g. shaving a day off the trip or downgrading a room. Until eventually you find that last property tax hike has finally met up with the rising hotel prices and you've been priced out of travel. I've had a respectable (for my locality) salary that's been stagnant for a decade, and it used to be trivial to pop off for a long weekend to Nashville or Alabama shores or something on that scale, and we could have gone anywhere in the USA on maybe a month's notice or less with no other planning. Now I'd need a couple months to plan the Nashville trip, and going out to California wine country would be the only trip we'd be able to take that year. But the amount of money needed to revert that to feeling like it did before really is just like 5%-10% of my salary. It is a very small amount of increased/decreased spending power to cause so visible of a lifestyle discrepancy, and I think that fits into all of this.
I think the rise of silicon valley coupled with the hollowing out of manufacturing, caused the number of viable cities\suburbs to shrink. The "economy" is ~70% "local" (grocery stores, utilities, banking and law services etc addressing a specific local market) surrounding a profit export center (a big factory, R&D center, port etc that brings external money).
If you are a software engineer, seeking to live in a "good neighborhood" while keeping your job, you are stuck in the most expensive cities in the US. Compare to factory jobs of various kinds, in the past there were centers all over the coasts and the mid west (think Indianapolis, Milwaukee, etc). Sure there might have been more opportunities in Chicago or NYC, but there were decent opportunities everywhere. (Both in the profit center and the service constellation).
You can see some of this dynamic in the graph on the increased concentration of media in NYC/SF/DC, you have 3x the number of opportunities in NYC/SF/DC, but you are subjected to that cost of living. A similar trend happened to every job. I would guess that part of the resistance of people to take over that butcher business, is the future in which that town no longer exists.
I think you are onto something here, but I wouldn't pin the cause on the transition from manufacturing to tech per se. What I think we are seeing is an across the board agglomeration and consolidation of function into specific regional areas.
This has been going on for a long time, much longer than the 'vibecession' period in the post. Look at a map of the USA, particularly old maps: The east coast, which was settled much earlier, you have a larger number of hamlets, towns and villages, etc scattered more evenly over the landscape. While many of these are defunct, you still can still see this distributed pattern of development. OTOH, the west, which was settled later, has a smaller number of population centers that are more centralized into larger (sprawling) metro areas. Patterns of consolidation in are also obvious in other industries like automobiles, aircraft, farming, etc. over the 20th century.
I believe the root cause of this is the reduction in friction or transaction and travels costs between different geographic areas. When travel frictions are high, expanding your market three towns over is difficult, so there is a natural geographic protection effect. When travel costs are low, two firms in two nearby cities directly compete for market share and scale, and in the end only one can come out on top.
Today of course we live in a globalized economy where firms compete not just against their brethren three towns over but all the way in China.
The entity that killed the local butcher was the supermarket, a different form of agglomeration enabled by the personal automobile (friction reduction).
And tech (software especially) has inherently low transportation frictions because their product can be 'manufactured' and consumed by anyone with an internet connection, vs manufacturing which requires moving real mass around.
yes I'm not claiming the transition to tech was the cause of agglomeration, just a side-effect, and downstream from that is the vibecession vibes.
I think there is also a "percolation breakdown" effect here. Agglomeration might increase linearly, but could still have sharp transition points. That is, at 10 major centers things are fine, at 9 there is a network break down.
The whole vibecession thing is sincredibly simple and I can't believe it hasn't been mentioned yet.
Real Disposable Income peaked with stimulus and then decreased, even while econ growth was fine. People care about real disposable income (RDI) not GDP. Economic growth is usually an indicator of growth in RDI but they're not the same thing.
In late 2020 and 2021 RDI massively increased, peoples transport costs decreased because they were working from home AND there was massive stimulus in government handouts, debt jubilees , that essentially brought forward spending power (which we later paid for in inflation).
Afterward economic growth was fine BUT, RDI decreased which made people upset, stimulus disappeared and prices increased.
That was it. It's third world crap, same reason third world incumbent presidnets shower out as much money as they can reight before an election
You can tell you and most commenters are fellas. Ask any woman who runs a household budget if $250 per month for a family of 4 on food is a joke? And "Groceries" aren't just food. There's a lot of dull stuff in the trolley that you can't eat. Toilet rolls, cleaning fluids (soaps, toothpaste, creams, gels), wipes, kitchen towels, etc etc etc. And soft drinks, coffee, sauces, etc etc etc. More like $10000+. And utility bills. Power, phones, internet, non-health insurance, etc etc.
There is an interesting meta-explanation that I’ve seen a few places that seems to be reinforced by almost every other speculative post like this one.
We occasionally see people express that feeling that they can’t afford to have kids. There are often predictable replies where people break down the various costs of things and compare it to income levels and conclude that actually, you can afford to have kids. Yet the feeling persists, I believe, because the problem itself is not clearly captured in the phrase: “Can’t afford to have kids”.
Consider this expanded version of the phrase: “I can’t afford to have kids that I can reliably pass on my middle-class status too as if it were hereditary, while also maintaining or increasing my own socioeconomic status.”
This, to me, explains a lot of the negative sentiment and why pointing out any individual’s circumstances in the moment does nothing to reassure them. For almost my entire adult life (I’ll be 50 soon), the primary anxiety of the adults of my generation and younger has been making the middle class somehow hereditary in practice for their kids. If you make a list of all of the things that are considered required for this its has essentially perfect overlap with the main complaints repeated in posts like this one. You have to have a minimum quality of single family home in one of the ‘correct’ areas so the kids grow up around other kids who are also bound for the middle class, adopts the correct class markers, avoids “those people”, attends an acceptable school with the right attributes (class quality, extras, *who the other students are/aren't*).
College is also necessary but not sufficient by itself. You have to at least get a 4 year degree. Depending on how much nepotism you can leverage this may just be status/class signaling. If you don’t have access to quality nepotism you’ll have to actually learn a useful set of skills here. (more young people need told this explicitly). And even if you get the housing and college parts correct, if you lack the connections and resources to be taken care of regardless of your degree, for a lot of people a college degree isn’t much more than a raffle ticket to the middle class. And an expensive one at that.
I have no hard data to share, but this is about vibes anyway. I think the primary driver of the anxiety and fear that is causing this vibe is knowing that you can do everything correctly per the above outline and, unless you have sufficient nepotism that you would have been fine regardless, you or your children can still fall out of the middle class with ease. It doesn’t mean you’re going to, but you could. And you can’t totally protect your children from it no matter how much you spend, you can only increase their chances. Maybe. No one wants their kids to have a worse life than they did. Many will not produce children unless they are confident they can assure this, not simply being able to “afford” them in the immediate term.
And examples are everywhere of the feared outcomes. For me, my own raffle ticket was a winner of sorts. I grew up poor, raised by an addict single mother on gov’t assistance, first member of my extended family to graduate college (with an accidentally useful major, statistics, was almost sociology. As an 18 year old I had no idea). I’m smart, but my upbringing also made me ruthless, distrustful, and at least partially sociopathic as a survival mechanism. All traits generally rewarded by capitalism when combined with a marketable skill. Things have not gone nearly so well for my wife. Both of her parents had master’s degrees in STEM fields and very good jobs. They also died relatively young. Her father’s estate and life insurance was largely scammed out of her mother, who was very skilled and educated but not very smart, and her mother died a few years later after losing her life insurance because she forgot to pay the premiums (early onset dementia). Neither made it to 50. Her death actually cost us a few thousand we really didn’t have to spare. My own parent’s deaths (56 & 60) also cost money on balance, but was entirely expected and qualified for assistance for the families of impoverished deceased. My wife’s socioeconomic status has slid a good amount since childhood and I’ve overheard other people in the community use her life as an object lesson/source of fear for themselves and their own children. She couldn’t really be around her peers from childhood or their parents generation without becoming severely depressed until I helped her meditate on the impermanence of all phenomena. My own SES has gone up a fair amount, I’d consider us firmly in the lower middle class, but only with a combination of both work and a good amount of luck. The current trends in childlessness resulted in us inheriting a decent house; her grandparents had 6 children, only one of which, her father, had kids of his own. So we got grandma’s old house and a chunk of land. We also don’t have kids. Not by choice, my wife is infertile. We live in one of the wrong areas anway. My wife is disabled and cannot work outside the home but does an admirable job in my opinion of keeping the house for us. I'd estimate my income and her SSI amount to about 10% of what her parents combined income was, maybe a little less. She has a whole album of photos from her childhood from luxury vacations to exotic locations we could never even dream of visiting on our adult lives, and a handful of luxury consumer goods from the 80s and 90s somehow missed by the family vultures. And the house. If something happened to me there is no one who could take care of her.
However, one could easily make a post using my current finances to make an arguement that everything is fine and we have a good life, and I tend to agree that I do. But it could all vanish in the blink of an eye.
Something REALLY important that I haven't seen brought up is that during the vibecession, younger people had a higher consumer sentiment than old people(1). This seems to cut against roughly half of the narratives that people are putting forward, i.e. the rent being high in Brooklyn isn't a good explanation for why the Boomers' vibes are bad. (This could also be weak support of the "it's just inflation argument" since older people are hurt more by inflation due to having more savings.)
I wonder if involution (the need for people to put in more and more effort to stay in the same place because of, essentially, Moloch) is a factor here. For example, I think it will inherently be more frustrating and discouraging to people if they need to apply for hundreds of jobs to get one offer than if they only need to apply for things that stand out to them as good fits, even if they get a job of the same quality in either system. We also see this with high school, college, grad school applications, success in various competitive fields such as sports (where you need to start earlier and earlier to have any chance at the pros, and hence you don't really get stories about people discovering a talent or a passion) and resume building in general.
I also wonder if Gen Z is defining the term "financial success" differently from how Boomers would have. To me, a financially successful person is at least upper middle class (and so I think- but successful members of older generations wore furs and expensive jewelry that is much less common now); maybe to Boomers, that is 'rich,' whereas 'successful' is anyone who can pay for their basic needs and the occasional want, because people genuinely being unable to do this was much more common (see meteoric decline of extreme poverty.) On the other hand, it's much more common for middle class members of younger generations to be in serious debt and to be likely unable to ever own a house, partially because, as you discussed in your cost disease article, the cheaper versions of many goods and services are no longer produced because they either were banned or are less profitable.
It does depend on the definition of success. If it’s just comfortable then Gen Z is wrong. If it means the most successful then Gen Z is right.
As for what Gen X thinks - a retirement income does have to be that high to be very comfortable, it’s a stage of life when pensions and savings are drawn down not paid into, mortgages are paid, debts are mostly finished (including college debt - although that wasn’t a problem for boomers), and people have fewer dependents - neither parents nor children.
I think the main difference here is you chose an area to live with above the US average cost without adjusting the $80k income. On average, people living in more expensive areas will have higher income. Meanwhile, the article you referenced chose an area with below average housing costs.
>I’m younger than Erica, and have less pop culture literacy: can someone tell me whether the Friends theme song was meant to express a zeitgeist that would be immediately recognizable by and sympathetic to most viewers,
Absolutely not. I watched Friends in college (graduated '96). There was zero generational malaise among my peers. The quoted lyrics are expressing the ubiquitous growing pains that everyone feels as they start to make their way as adults. It's "welcome to real life" not "we're all doomed."
My full thesis, which I didn't fully explain in the comment Scott quoted, is that it's still growing pains of early adulthood but people in the relevant demographic have gotten progressively more pessimistic about the growing pains being a temporary vs permanent condition.
I was in middle school when Friends started airing. I graduated college in the early 2000s and noticed a mix of attitudes about the growing pains among my peers at that time: some parsed them as mere growing pains while others definitely took a "we're all doomed" attitude. I was in the growing pains camp myself. Among younger friends and relatives who reached that life stage several years later, I observed increasing prevelance of the "we're all doomed" attitude.
I suspect the growing pains have objectively gotten somewhat worse. I also think there's a cultural shift going on, probably a combination of bad vibes being contagious, a series of major events that have eroded trust in institutions, and probably some other factors contributing as well.
> people in the relevant demographic have gotten progressively more pessimistic about the growing pains being a temporary vs permanent condition
I don't really understand what you're saying here. Is it that the song is really saying "20 year olds in the mid-90's have a tougher time adjusting to adulthood than 20 year olds did in the 1980's"? What's the textual evidence for this?
If you graduated in the early aughts then you graduated in a post-9/11 post dot-com-bubble world where real estate was already charging towards the 2008 meltdown. Oh and liberals were apoplectic that the 2000 election showed that the political system was broken. Even if it was only a few years later, the vibes for your generation were significantly different from the vibes for my generation and I think it's a mistake to project mid-aughts vibes onto a mid-90's song. Like I said above, there was zero "the world is doomed" vibes in the mid 90s among anyone I knew. Communism was dead, America was the unquestioned hegemon, and the economy was in the midst of a long bull run behind the PC/internet revolution.
>I don't really understand what you're saying here. Is it that the song is really saying "20 year olds in the mid-90's have a tougher time adjusting to adulthood than 20 year olds did in the 1980's"?
No.
I am making two points, one about the text of the song and one where I am trying to extrapolate between the song and my own experiences and observations half a generation later.
The claim I am making about the text of the song is that it's about 20-somethings in the 90s finding early adulthood surprisingly difficult, especially in terms of jobs, finances, and dating. I don't think the song makes any claims about other times or generations.
The second claim, which is informed by the first but also informed by other things, is that the song is evidence that 20-somethings in the 90s often experienced those sorts of growing pains. I know from my own experience that 20-somethings in the 2000s also often experienced growing pains. I have observed 20-somethings in the 2010s and 2020s also experiencing growing pains. The nature of these growing pains strikes me as qualitatively similar from the 90s through the present, although their severity has definitely varied with time: as you alluded to, I expect people graduating in boom years of the late 90s, c. 2005, and c. 2015 had an easier time career-wise than those graduating c. 2002, 2009, or 2020.
I agree with you that there does seem to be a trend of the people experiencing the growing pains being more likely in recent decades to interpret them as "the live of everyone like me are going to suck forever" rather than "my life is kinda rough right now but I expect it will get better". I saw both attitudes in parallel in the early 2000s, with the former becoming increasingly dominant in the 2010s and especially post-Covid, and I believe you that the latter attitude was strongly dominant among you and your peers in the mid-90s. I think the main thing I'm getting at (and citing the song as evidence for) is that the growing pains and the frustration from them date back at least to the mid-90s.
Come to think of it, I wouldn't be surprised if the mid-90s were actually an island of relative optimism compared to both the 80s and 2000s, for much the reasons you brought up. I obviously wasn't an adult in the 80s, but I do remember a lot of "the world is doomed" themes in music and movies from the 80s and early 90s, and that the attitude I see embodied by the song and the plotlines in the early seasons of the show may actually be a lagging effect of that. The showrunners, David Crane and Marta Kauffman, both started the respective writing careers in 1987. The duo that wrote and performed the theme song, Phil Solem and Danny Wilde of The Rembrandts, are a bit older and seem to have started their careers c. 1980. While the show started airing in 1994 and was set in the present, it would make sense if the showrunners and songwriters based the show's and song's vibes more on their own respective experience of being a struggling 20-something than on what people like you were experiencing at the time the show was airing and set.
Ten seconds with Google says that Basel and Geneva have rent control, and Swiss rents nationwide are capped so that the net yield is a reference mortgage rate plus 200 basis points (2 percentage points).
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
As a landlord myself, the incentives aren't really stacked to do so.
1. Bad tenants are a nightmare to deal with and get rid of, so when I have a good tenant I want to keep them there. In some sense not raising the rent at the end of the year is a kind of implicit discount for good behaviour
2. If rents go up 5% in a year, I raise rents 5%, and then the tenant goes elsewhere I've just lost between 10-20% of my revenue for the year because it takes a month or two to fill the apartment. So there's a local incentive in any given year to not raise the rent (even if it's unlikely the tenant actually would leave, see pt 1 as well)
3. These incentives make sense for a single year, but get more and more misaligned over the course of a decade.
4. Also, if I was a full time landlord and trying to optimise everything this makes sense. But in reality I treat it as a passive investment and outsource most of the management to a real estate agent. That agent is not really incentivised to squeeze out every last drop of profit, because losing a tenant creates a bunch of work for them to move someone out, find a new tenant, and move them in. So they're not going to be proactively telling me to raise rents, they're going to quietly hope things continue with no disruption and they keep pocketing their 4%
5. Local markets - you allude to rent controls, but there are other factors at play too depending on the region. Where I am in Japan, tenant protections are strong and it's very hard to evict someone, which emphasises pt 1. I also can't raise rent at will - I have to survey and document prices in the area and prove that the current rent is underpriced before I can raise rent. This work (on top of pts1-4) disincentivises trying to raise rents on a regular basis which results in inefficiencies across years. It also might not even work - if other houses nearby are also under-priced then I won't be able to get data to show that I need to raise rents
China is definitely a lot richer than it used to be, but its youth unemployment rate actually is ridiculously high - something like 20 to 30 percent (!) - or so I've heard. In general, going from "things kind of suck now but they're getting better quickly" to "things don't suck as much but things aren't going to get much better than this" actually is the kind of thing that sounds really bad for vibes.
> Should we subsidize journalists, on the theory that if they’re in a good mood, everyone else will be in a good mood too?
Isn’t this kind of sort of the intention behind government-subsidized news outlets in non-US countries like the CBC and BBC? In my experience they’re noticeably less extremist and aggressive than a lot of major US news networks.
I'd like to address the following from a German perspective. But I'm sure some form of this is true for multiple European countries.
> I’d like to know more about what factors hold rents down for long-time residents. Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
It's somewhat of a complex mess of various mechanisms, contract types, modernization subsidies, welfare etc. This does also vary by region. So I just want to clarify on the core point about how this is possible as straight-forward as possible;
We have various kinds of rental contract types that negotiate the rent/and possibly future increases. There are various legalese ways that decide what can be raised how, but most of the time this ends up with max ~6% rent increase per year (~20% for 3yrs) until some benchmark rent for the area/comparable objects is reached. Older contract types might be even more limited in growth p.a., I vaguely remember something about 3% p.a. Old contract is almost as good as generational wealth, especially in major metropolitan areas.
While renting out a new flat allows you to set a price from scratch. Those are also in theory capped as far as I understand, at least in some German states, but this is where theory and reality drift apart; A lot of people who just move places, especially to urban areas, possibly being from other parts of the world, won't question or fight the price, as they'd not get any place in a sellers market. While it's possible to sue, even after the fact, this remains a hobby of few. But even this aside, being able to re-rent afresh frequently allows you to track the maximum growth of the market.
> "Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?"
From what I'm hearing from everyone else here, this sounds like a 'Market for Lemons' type situation (https://en.wikipedia.org/wiki/The_Market_for_Lemons). Briefly put, each potential renter a landlord can take on, will either turn out to be someone who trashes the place, or doesn't trash the place. The landlord doesn't know, however, who will trash the place vs. not trash the place. So the price they charge new people, will be in-between the low price they'd charge people who don't trash the place, and the high price they'd charge people who do trash the place.
If you then, as a renter, reveal that you're the sort of person who doesn't trash the place, the landlord will then effectively lower your rent (over time, by not raising prices, or raising them very slowly), down to the level of rent they charge people who don't trash the place. If you as a renter instead reveal you're going around trashing the place, the landlord will raise your rent, or when that is banned, try kicking you out (which is also frowned upon, but still doable, generally speaking).
So, the market price for rent is the price for someone who may or may not trash the place. Reveal that you won't, and your rent goes down. Reveal that you will, and your rent goes up. But until you reveal it either way, your rent has to be in the middle. Therefore, the market rent has to be in the middle: higher than that charged to 100% confirmed non-trashy people, lower than that charged to 100% confirmed trashy people, because landlords are dealing with a mix of trashy and non-trashy people.
(What the exact mix is, of course, depends; it could be as high as 50-50 though, even in places with very few trashy people, simply because trashy people 'stay on the market' a lot longer than non-trashy people, and keep re-entering it as well when they get booted out of their previous place for trashing it. This is why market rents can be so much higher than the 'actual rent' people pay on average.)
Re: rent for newcomers versus longstanding tenants.
In my quite regulated province, new tenants can be charged anything for their apartment, but increases can only be some provincially-set increase, generally very close to inflation. And it's almost impossible to evict someone who pays their rent It leads to quite a different rate in rent between new apartments, and tenants who have been in the same apartment for scores of years. And I think we're generally not considered a "rent controlled" area.
Also, new buildings don't have to follow the provincial guidelines for their rent increases, as another technicality. Do all jurisdictions have such complicated landlord - tenant legislation? probably.
I think that the idea that Europe doesn't have a vibecession is 100% wrong. Maybe we should not use the word vibecession when things are really not going well¹, but people, and young people in particular, are not feeling optimistic, at least any that I meet
In 2025, I heard from people in Lisbon complaining that rents are higher than their salaries, folks in France predicting imminent civil war, Germans telling me that their economy is over, British folks telling me that they are looking to get out of the country as soon as they can, people in the Netherlands complaining about housing being almost impossible to obtain... People get mad at you if you express any optimist wrt the environment.
The word polycrisis is sometimes used to intellectualize this feeling and is used by mainstream media and academics all the time.
¹: it's like the joke that if you have an irrational fear of snakes, you should move to Australia. You'll still be afraid of snakes, but now that is a rational fear.
I feel like the perspective here can only come from people that are not only comfortable now, but have never had the serious prospect of becoming truly destitute appear before them like the ghost of Christmas future.
The vibes are vibes, but the vibes are also real. I know the feeling of "I'm eating well now, but I am a layoff and a recession away from going back to the days where it was sleep for dinner and grit for breakfast".
Thankfully I'm pretty sure I'm safe from the worst, but I also remember rebuilding distributor caps in my childhood to add some slack to the household budget; and the times feel more like that then the do milk and honey.
1. We often compare ourselves to our parents. If we aren't meeting the same milestones at approximately the same ages, it impacts our vibes. At minimum we are having kids later in life, but I suspect other milestones are also delayed.
2. We don't often compare ourselves to people from previous generations who never had kids, but those people are included in a lot of the statistics. We want to assume we'll do as well as our parents, but some people inevitably don't.
3. I agree that lower friction has caused people to experience more rejection in job applications and dating. I would add that approximately nothing in my life was as soul-crushing as this was.
4. The government lost a lot of credibility during Covid. Other institutions as well. This is the reason I extrapolate from "things are shitty" to "things will continue to be shitty until I die".
5. I agree that social media algorithms notice when you start gravitating towards a negative worldview, and begin feeding you content that reinforces your negative worldview.
6. Maybe the economy is bad, or maybe something caused an entire generation to falsely believe the economy is bad. Either way, seems bad.
I think the rise in visible homelessness is huge part of the vibes. My town, and its not a large or unique one, went from essentially no visible homeless people to people routinely camping in the town square and several parks. Cities that started out with homelessness saw an equally dramatic increase, large encampments, that sort of thing.
People always point to disjuncts between personally doing well and judgements of the economy as evidence of irrationality/propaganda, but anyone living in my town could say "well I'm doing fine, but every time I go to the park or downtown I see bums and it never used to be like that so seems like something's wrong with the economy" and while you can of course critique that take it's not exactly crazy or brainwashed
I wanted to add some quick insights on rent control in Germany; it mainly consists of two elements. Both are based on an "average local rent per sqm." This attempts to take quality and amenities into account, but its obviously difficult.
The first element simply establishes this local average as the maximum for increases (and limits the percentage increase up to that point). Obviously, canceling contracts and evicting people is also heavily restricted so landlords are stuck with the contracts they have. The local rents rise slowly as the "below average" rents rise and push up the average. The second element prohibits new contracts from going more than 10% over that local rent. So landlords dont benefit much from ending a rental agreement and starting a new one.
At this point, the free markets advocates intervened in politics and warned that capping rents like that obviously disincentivizes new construction. And so any new construction (after 2014) is allowed to have any starting rent they like, and is only subject to limits to the later increases. This creates a massive disadvantage for people moving into a new area, or young people upgrading to a larger apartment for starting a family. It also incentivizes older people to stay in large apartments when their kids move out, further straining the housing market.
You can check this out in the legal texts if you are so inclined:
Theory: the vibecession is mostly about certaintly/confidence in the future, rather than the amount of stuff people can buy now. Worrying about how well-off you'll be X months/years from now is nothing new, but the Covid pandemic, and governments' response of shutting down entire countries for indefinite periods with very little warning, has made everything seem much more precarious. And of course, uncertainty is generally very bad for economic confidence, so it makes sense that people who are still traumatised by the pandemic experience will feel like the economy is teetering on the edge of collapse. This would explain why the vibecession seems to have started around 2020, i.e., the year Covid struck, and also why China is having a vibecession of its own, because the Chinese government was very strict about enforcing lockdowns.
We forget the uncertainty and doom of the past because we know the past turned out okay. I think this is what drives a lot of nostalgia.
If I could go back to when I was 22 then I could relax and enjoy life, knowing that everything was going to turn out okay. But I wasted my 22ness worrying needlessly about the future.
>We forget the uncertainty and doom of the past because we know the past turned out okay. I think this is what drives a lot of nostalgia.
To a degree, yes, although I think there are ways -- the rise of the gig economy, AI, Covid and its aftereffects -- in which the contemporary world is genuinely more uncertain than it was in, say, the early 2000s.
Oswald Spengler’s massive _Decline of the West_ (~1920) covers this.
The book has essentially two elements. One is a Hegelian woo theory of how civilizations change over time. This can probably be disregarded. The second is a claim of the *pattern* of civilizations change over time, and this one is uncanny in the extent to which it seems to be picking out real patterns, including the Western pattern (already present in his time, probably delayed 50 years or so by the drama of WW2, now back on schedule).
Point is, vibecesssion is massively overdetermined. The society/culture is stuck, in a nihilistic death spiral, and we all can see it. Of COURSE people are bummed out by this, regardless of economic indicators. The very refusal of our elites and chattering classes to even admit this only makes things worse.
Spengler is probably not a great map for the future because tech (especially AI, but also war tech) is unlike anything before. But he does seem a pretty great map of the past. I don’t know how we fix this (or could even have avoided it) but it’s obvious that the elements he highlights (for example the development of an elite mono-culture centered in a few “world-cities, in our case LA/NY/DC/SF) are a large part of the problem. The problem kicked in round the late 19th C (eg Nietzsche, or French birth rates), and any diagnosis that refuses to grapple with this is just not serious.
Another way to see the same thing is to look at the prevalence of YA fiction dystopias. These, once again, seem to understand the problem (Hunger Games, for example is all about the way the world-city feeds on flyover country, something the movie-makers apparently can’t quite see…)
Condo law is a fairly new thing in the US! The first condo in the CONUS was only built in 1960. (IANAL, this is all from Wikipedia articles.)
The way you can legally set up multiple units on top of one another are:
1) One owner controls the whole building and rents to tenant(s).
2) Special case of the previous: NYC-style housing cooperative, moderately popular in the early 20th century. A bunch of people are shareholders of the corporation which owns the building. Since it would be silly to pay rent and immediately get it back as dividend, on paper they set the rent to zero. A teeny tiny drawback of the setup is that your neighbors are now your business partners; since the corporation as a whole took out the mortgage to buy the building (you individually own a share, not real estate), if any member becomes unwilling or unable to pay their share, the others have to pick up the tab, or else the corporation as a whole falls into arrears and the bank can foreclose on the whole building. This is to my understanding the primary reason coops are so famously picky about who they allow to be a member.
3) Flying freehold. Ye olde law insists on ownership being quite absolute; notably it includes a god-given right for me to demolish my stuff. However, if Mr. W. E. Coyote owns the upstairs flat, and I demolish my apartment (which I own), his will fall down. It is also an unhappy situation where, for very necessary works, he needs to erect scaffolding on my land, which theoretically I could refuse, or demand a fee for. Unsurprisingly, people didn't want to create these kinds of arrangements on a massive scale.
4) A routinely applied ad-hoc fix of the above is to make both (equal) ownerships simultaneously landlord and tenant of each other. Still not quite what one would want.
5) Condominium. It fixes the (legal) problems around building, financing, and maintaining the building. Unfortunately, I understand that if you ever want to ever demolish a condo (say, because you want to build something else in its place), or otherwise change the legal form of it, you might regard the setup as a toxic waste factory. This is because if there are hundreds of individually owned flats, then it is very likely that at any one time:
- one's owner has recently died, and the right to consent to the deal is grinding its due course through the legal process;
- one's owner suffers from elderly feeblemindedness and can't quite understand what it is that is offered for him to sign;
- one has been banished from the Yyphrostikoth Meta-Republic for acting as the self-appointed Representative for Vetocracy, who will simply not agree to anything;
- one's owner has died a fair time ago, but the title to his apartment was inherited in equal share by his three children, who are not on speaking terms with each other, and one of whom has been last heard from years ago.
(This was inspired by a non-US case that I found myself in. It turned out, shortly after my family bought a flat in a condo, that the whole building complex had been legally registered as one condo, but from day one the inhabitants treated the two buildings as if they were two separate condos -- holding separate meetings, electing separate officers, keeping separate accounts at different banks. This is technically illegal, and until it's fixed, the condo couldn't get the state subsidy for insulation retrofitting. Obviously somebody suggested that the thing be legally re-founded as two separate condos, but the lawyer nicely gave the above explanation for why this is impractical. Caveat lector, the law be more accommodating to buyout-and-demolition, and/or might differ between the US and where this story happened. Again, IANAL.)
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
Not if there is a real risk of their rental property sitting empty. My landlord charges below market rent but also I suspect he'd be reluctant to raise mine, given that I pay consistently. He'd have to raise rent by ~10% to, over a year, make back the cost of a single missed month at the current price.
That doesn't account for the chance that a new tenant doesn't pay, or doesn't pay consistently; a 2023 post suggests that over 10% of renters are behind on rent - https://www.ppic.org/blog/many-california-renters-remain-financially-stressed/ - suggests that over 10% of tenants are behind on rent. If it's that common, I imagine the time cost of screening a new tenant (in addition to the missed week-to-month of rent, the time cost of showing the apartment, etc) could be a strong incentive against raising rents on existing renters.
> why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.
I think it's because renting and buying are two different products. When you rent, you're generally seeking a temporary living arrangement that allows you to make enough money to buy a house. You don't care about the neighborhood, you don't want to pay a premium for a yard, you don't want to deal with maintenance. You want a roof you can sleep under while you earn money.
When you buy, you're generally deciding where you want to live for the rest of your life, or at least the foreseeable future. You care about the school system, you want a yard for your eventual kids to play in, you want a neighborhood where a house will be worth more three decades out than it was when you bought it. You want a permanent slice of stability and normalcy to anchor your family.
Jobs are more unstable than they used to be. You used to get a job and probably stick around for years if not decades. Now you're more likely to lose your job, creating uncertainty and also feeling like you need more income as a cushion just in case.
The Baumol effect hasn’t been a constant since the Industrial Revolution! I mean, it’s true that some version of Baumol has been operative at every point in time, but *which* industries are growing in productivity and which are stagnant has changed quite a bit at different points in time. There’s been a rough approximation in which “things that can be done in factories” keep getting cheaper while “things that need someone to do them in person” have not. But lots of things like goods delivery, publishing, climate control, clothes washing, etc have moved back and forth between these categories.
Isn't it rude to say the economy is doing well if you think the person you're speaking to isn't? I attiribute this to the decline in fashion standards. People just don't put any effort into their appearance these days.
I was disappointed that this response didn't include two of my favorite responses from the comments on the original post.
1. That the vibes-reality spread seems to be largely explained by the cost of debt, as studied by Larry Summers and cited by PJL.
2. That Turchin's elite overproduction hypothesis explains this via a difference between reality and expectations, mediated by the way that people answer survey questions about reality.
Could loans/debt have something to do with it? Do more people have (bigger?) student loans holding them back or something now? How much more common is getting a car loan, and how long do they take to pay off now vs then?
As regards sticky rents: I'm a landlord with one rental and it took us 5 years to get around to raising the rent on our tenant and we still only raised it to near the bottom of market rate. She's a *great* tenant and has other options so we were afraid of pushing her out by raising it too much.
If we were renting to somebody new we'd snap to market rate.
So the idea that newcomers to a city are paying more in rent than long-time renters makes a lot of sense to me.
This is absolutely true. Having a good tenant who pays the rent on time, treats the apartment well, doesn’t cause problems, etc. is worth a lot and therefore landlords don’t want to lose them by raising the rent.
Feels weird commenting on a comments post but I do have part of the answer for:
"I’d like to know more about what factors hold rents down for long-time residents. Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?"
My understanding is that a large fraction (most?) landlords prefer to keep good tenants in rather than maximize profit. That keeps cost low for a stable, "good" tenant, but forces unproven new tenants to pay market rate until proven, at which point you get a stable rate protected from increasing market prices. Also because landlords know you can afford whatever rent they charged you to start, they don't want to lower it and take less profit or raise it and risk the tenant leaving.
What I don't know is how this works for large apartment buildings with little tenant-owner relationship that presumably drive most of the market value for new tenants. Maybe that's rent control stuff, maybe they worry enough about vacancies that keeping a tenant in a lower rate is still better than risking an empty unit for 6 months, or maybe they actually just increase rent more than other forms of renting?
on the "which inflation measure to use" question - it's very true that there are a lot of different inflation metrics, the choice matters a lot over the long term, and there's not an easy way to pick which one is 'right'. however one clue is that if you use the most aggressive ones like raw CPI (higher inflation -> lower income growth), they lead to conclusions that don't make sense (no median income growth over 40 years despite the median American consuming a lot more in that time), so they're probably not right https://www.nber.org/papers/w23292
When I was USSR citizen in 86, the mood shifted from “they keeping us safe behind the iron curtain “ to “they are willing to kill us just to keep their own asses safe” - 5 years later no more USSR
Enron scandal killed post 9-11 trust. The subprime mortgage was a scam perpetuated by banks. Bailout of the same banks without any personal accountability to people who stole so much changed conversation to “they are willing to sell us all just to keep their own asses safe” - 5 years later you got Trump, no more USA as we knew it.
1) re: China—while China still sees GDP growth it has cooled from the double digit growth of 20 years ago. More to the point, slowing growth has come hand in hand with such shockingly high youth unemployment that the government no longer reports it. I have heard from some political economists that it’s somewhere in the 20-30% range.
2) Re: Stickiness of existing rents. My cousin is a realtor and has told me that because it can take a month or two to fill a rental, the loss rent is often higher than the delta between a a below market rent increase to encourage existing renters to stay and the maximum rent increase the open market could bear. Whereas if they are moving out for non-rent related reasons then you may as well jump your rent up to the market price.
If I were a boomer who left this economic mess to younger generations while enriching myself and staying silent—never advocating for saving or reform—I would be deeply ashamed. Some of this was hindsight, yes, but much was obvious all along. The difference is that half the people who knew better simply cashed in, and there was no incentive to change course. Over the next 10-20 years, as boomers die out, they'll attempt to preserve their legacy, insisting "things aren't so bad," dismissing concerns as mere "vibesession," questioning whether young people's struggles are even real, claiming "things are better than they've ever been." But increasingly, that legacy is one of cashing out and staying silent.
You write:
"Let's say you're moving, for whatever reason, and you own a home. You now need to sell your home and buy a new, comparable place at your destination. Once you've accounted for the costs of the real estate process, you've typically lost a bit of money, but all in all, you're in the same position you were in before: you have a home. If housing prices go up, you aren't any wealthier than you were before, because the price of the house you were selling went up and so did the price of the house you were buying; housing prices going down doesn't make you any less wealthy, for the same reason. And nobody who owns a home wants to sell their house and *not* buy another house to replace it; going from homeownership to renting, or to moving in with family, feels like the first slide down the slippery slope to homelessness."
This is true if you assume that nobody can ever use less housing than they currently do. That's obviously false -- if homes double in price in real terms, but the price ratio between large and small homes stays constant, you can extract real, usable wealth by downsizing your house. You imply that nobody would consider this because it feels like moving backward, but 1) many people downsize their homes, when they retire and for other reasons, and 2) if you make a bunch of money on something but refuse to sell it to realize the gains, that doesn't mean you haven't made money.
Similarly, if you buy a stock, but you have committed in advance to never, ever selling it, then yes, you cannot make money from that stock. Obviously, that would be a foolish committment.
Housing isn't a commodity. You can change how much of it you use, and where, and under what circumstances, and all of that offers a way to benefit from price increases.
"Nobody" is an exaggeration, but certainly most people don't really benefit from rising house prices, fo rthe reason Bob Frank said.
(And of course, there are a lot of people who might want to move into a larger house -- say, to have more children -- and they'd be especially screwed by rising prices.)
Not sure if thats true inside the US or not, but outside the US thats not true.
Anyone who has a mortgage on a short term (2-3-5yr) and where that mortgage is on less than the max LTV (usually 40%) benefits directly from house price inflation when they re-mortgage at the lower rate.
E.g. lets say I buy a £400k house on a 10% deposit. I'm a first time buyer so I get a short term mortgage on that of (say) 3 years and pay 5% interest on that loan (so £18k p.a. in interest).
Now lets roll forward 3 years, and assume the housing market has risen 5% a year. The house is now worth £463k. I've paid a small amount of principal as well, say £12k. Because of the house price increase I am now in possession of a 30% deposit (I require a loan only 70% of the house value). Almost all of that decrease in LTV is provided by the price of the increase in the house. I can now likely get a loan around 3.5% a year and so save £5,400 a year in interest costs on my outstanding loan as its a less risky loan for the bank.
In another 2 years I'll easily be in the 40% deposit range, even with only minimal house price increases and that'll drop again to maybe about 3%. So now I'm saving £7k per year in interest, about £550 per month. Thats a decent amount of money!
OTOH.....if house prices drop.....I can easily get stuck on that 5% interest rate FOREVER, so long as it drops roughly as fast as I am paying off that principal (about 0.5% a year house price drop would do it).
So.... all else being equal.... and assuming you live in a country where short term loans, frequently renewed, are an option... then almost every first time buyer/<10years buyer.... sees an immediate and substantial monetary benefit from higher house prices, and would lose that with lowering house prices.
Thinking some more.... this even extends beyond "early in their homeowning life" buyers, so long as they also have "other debt".
If we roll forward even further.... we're already at 5 years.... If I roll it to 8 years, and the house prices have still been rising I am now a long way past the 40% LTV (where mortgage rates are cheapest). Perhaps the house is now worth 600k and I've paid down to a 275k loan.
Well, now (due to the rising house prices) I have headroom. I can borrow another 85k and still stay at the 40% LTV rate (e.g. 3%).
So, if I want to buy a new car.... even an 85k new car.... I can take out the money against the house the next time I remortgage, and pay 3% on that loan instead of the rate I'd be charged for a loan on a car (say 10%). So thats another 6k per year I can save in interest payments with a little financial engineering. I now get the "new car" 6k per year cheaper than a non-homeowner (or a homeowner who has experienced falling house prices) can.
If I have credit card debt.... I can refinance that at 3% instead of the 15-20% the credit card company charges for the same money, and so on.
So, "rising house prices" far from being something that "rarely helps anybody, except some maybe retiring downsizers" is something that (with a little financial literacy/engineering) can make you richer at every stage of your life, equivalent to an extra 5k-10k a year of income received as reduced interest payments.
I'm not especially culturally literate, but it was pretty clear to me in 1994 at age 13 (though more so later) that the song was absolutely meant to express a zeitgeist that would be immediately recognizable by and sympathetic to most viewers.
I should clarify a bit. The song is referencing a classic Gen X apathy and angst that has a very different feel from the later, more militant Scanlon-era Vibecession vibes.
I was going to say the same, it very much fits in with the nihilistic feel you get in films like Office Space or Fight Club which are now mocked by online commentators.
But many of the plot points in friends are about them not being able to pay rent, find a job, afford basic luxuries, etc
Many other jokes in Friends revolve around how wealthy everyone is despite having chill jobs.
Joey chilling at the coffee shop until someone says "shouldn't you be at work right now?", nobody knowing what Chandler even does, Monica's legendary rent-controlled apartment that she inherited from her grandma, things like that.
Respectfully, I don’t really see how any of those jokes implies that the characters are wealthy
How else can one afford to live in a nice place in New York while working as a chef, or while failing to work as an actor?
The Friends were poor in the same way as the Simpsons family is poor. For the laughs, until a joke requires that they do or have something expensive and they then forget that they are poor, then when it's funny to be poor they become poor once again.
The song still sounds pretty upbeat about it. Almost the opposite of the vibecession. Like yeah things are tough, but I'll get through it because of my friends.
Agreed, but I think that's largely the difference between Gen X apathy and Gen Z militant anger.
That is the vibecession. It is about bad economic vibes. Not bad life vibes
IIRC, there's a bit of an inverse relationship between life vibes and economic vibes among the main characters, especially in the early seasons.
Joey (actor) and Phoebe (musician and masseuse) seem to generally like their jobs when they have them and are fairly happy with their personal lives but are financially struggling and irregularly employed.
Ross (staff paleontologist at a museum) and Chandler (some kind of accountanf or financial analyst) have pretty solid economic vibes but start out with terrible life vibes. Ross is going through an emotionally devastating divorce, and I think I remember Chandler being depicted as not have much of anything going on outside of work early on and being angry about it.
Monica is in between the extremes, starting out in a poorly paid and frustating low-level job (restaurant line cook) in her chosen career (aspiring chef) and having an okay but not great personal life by sitcom standards. The first season or so often has B plots about Monica's job being awful, and then there's a plot arc (a season or two into the show, I think) about her getting fired and struggling to find a new job.
Rachel is explicitly facing a tradeoff between economic and personal vibes at the beginning of the show, where she shows up after leaving an unhappy relationship with a rich fiance and getting financially cut off by her own family and instead moves in with Monica and gets a job as a coffee shop waitress.
Housing costs for the people who are financially struggling are handwaved in the show, for the most part. Monica is illegally subletting an extremely rent-controlled apartment from her grandmother and cutting Rachel in on the low rent, and Chandler is implied to be covering more than an equal share of the rent for the apartment he shares with Joey. I don't remember the explanation, if any was given, for Phoebe's living arrangements except that Rachel is able to move out of Monica's apartment in the first episode because Phoebe is moving out for some reason.
>"Chandler (some kind of accountanf or financial analyst)"
I think the word you're looking for is "transponster".
/s
Disagree, especially if you look at the more extreme cases outside the US, as mentioned in China (or in Korea, which isn't mentioned but is worse). Bad economic vibes aren't enough to start talking about "hellworld" or total hopelessness for the future. It's both.
I just mean that the puzzle is reconciling working people’s perception of their economic situation with what the data say about it. That’s what the inquiry is.
> yeah things are tough, but I'll get through it because of my friends
Polarization is crazy, friends are tough to come by. Here, have a smartphone instead.
The relationship between the emotional tone of music and the emotional tone of music is a large topic.
Did you mean to write "lyrics" for one of those musics?
What I remember is that the most zeitgeisty film of 1994 was called Reality Bites.
Born 1975. IMHO the Friends song wasn't capturing any kind of zeitgeist, at least not anything like the current Vibepression. The theme is that everybody's life has some challenges and some bumps in the road.
"Your job's a joke". Not "there are no jobs", not "capitalism is a joke". Your job.
You're broke. Not "everybody is broke". Not "you'll always be broke". You're broke.
"Your love life's DOA". Not "you'll always be alone". Not "feminism/the patriarchy has destroyed romance". Your love life. (Taken literally, "DOA" is final, but I don't think anybody took the "DOA" status to be permanent.)
"It's like you're always stuck in second gear". At least you're moving! And there is a first gear.
"It hasn't been your day, your week, or even your year". But it might be your year, someday.
Clearly "you" are going through some bad times. But the song doesn't deny "you" of hope.
And you know what?
"I'll be there for you!" "Like I've been there before!" (I'm not still there!) "Cause you're there for me too".
The crappy job, the romance troubles - they're not a reason to give up hope. In the end, you have human connection. You're okay! Things are okay!
Very hard for me to imagine this song catching on if it was new in 2025.
Yes, it's 100% about the standard growing pains of becoming an adult and tasting the realities of life for the first time.
The 90s were famously rife with movies and TV shows where the characters were materially successful but spiritually unfulfilled, leading to plot-motivating crises. Being objectively rich and physically safe/comfortable and somehow still feeling lonely and unhappy is not too bad of a description for the tenor of many of the vibesession complaints, and is also a description of the Fight Club Narrator in 1999, at the peak of human civilization.
A lot of vibesession complaints would still occur with very little modification even if we lived in a Star Trek future with replicators and starships. They are fundamentally complaints about relative status and comparison.
> in 1999, at the peak of human civilization
The Matrix reference?
Yes, centrally, but also people tend to laugh, pause, and then soberly nod when I say this.
The late 90s and early 90s were pretty different, the early 90s were dominated by the recession of 91 and were seen as a big comedown from the booming 80s.
Also interesting: the material success in these late 90s movies is pretty modest. The Fight Club narrator is 30 and has a small apartment filled with IKEA furniture and a wardrobe filled with department store brands, and this is portrayed as being pretty successful.
That's true. But the Fight Club Narrator specifically wasn't complaining because he was poor, but rather because he had all the "stuff" he wanted and was still miserable.
True -- my point was that if he was a Zoomer instead of an Xer then he'd have all the same stuff and complain he was poor.
Perhaps we were just less greedy back then, or less constantly exposed to stories of 24 year old billionaires and luxury cat influencers. This would cohere with the data point about younger people these days having unrealistically high standards for financial success.
Early 1990s actually did have a recession. It went away during Bill Clinton's first term in office.
You're once again hand-waving away the (stark) departure of your analysis from the consumer sentiment graph you shared near the top of the original post, which shows consumer sentiment on an upward trajectory between the 2008 financial crisis and the pandemic (just as you might expect).
"Memory can be faulty, but don’t we need something like this to explain the Trump campaign, the Sanders campaign, Chapo Trap House, Red Scare, 4chan, and all the other mid-2010s politicians and media telling us that things were worse than they’d ever been and outrage was the only acceptable response?"
Social media's reward of outrage-bait content fully explains 90% of this. "Vibecession" (even in the broader sense that you've used it) refers to a much more specific *personal economic outlook*. I also think that economic despair (or poor consumer sentiment) is pretty easily separable from the feelings of unfairness that built in the 2010s and were highlighted most prominently in the Sanders campaign. It's one thing to say, "it sucks that only the top few percent are benefiting from improvements in technology & productivity" or "wow a lot of people got screwed but the bankers did just fine" (anger over social contract) and quite another to say, "wow I'm now realizing that I don't think I'll ever personally be able to afford a house in the city I live in" (actual economic despair). [ETA: Ditto for the Trump stuff, most of which was cultural. "Things are worse than they've ever been" can capture a lot.]
True, it kind of stumbles past the obvious. The result of the Great Recession was millions of people lost their savings and nobody went to jail for it. The pandemic set millions of people back by years, then we find out the FDA rigged the vaccine approval timeline for the election and it once again looks like rich/powerful people making commoners suffer while they do just fine. The FBI lied to spy on the president. We finally pull out of Afghanistan to hand it back to the Taliban and realize we haven't won a war in 80 years, but we spend more and more on defense. Everyone can see Biden is too old to do the job and they lie to our face about "cheap fakes" literally a week before pulling him from the race.
And now, somehow, people don't believe any of the Official Statistics that clearly demonstrate they should stop complaining and instead celebrate. I wonder where the trust issue come from?
This explains the multiple, overlapping political movements: Brexit, Tea Party, Occupy Wall Street, Sanders/AOC (before she sold out), Trump. And the rise of conspiracy theories: lots of them turned out to be true, government agencies lost their legitimacy (for good reason), and now many in the public are convinced that if the Other Guy gets into office he's going to rob them outright to pay his friends, but if Their Guy gets in he won't help because he's on the take or the system is rigged (the DOGE flop).
Who's going to feel good about a system that looks like it's designed to screw you over, just because a few lines on graphs go up?
> then we find out the FDA rigged the vaccine approval timeline for the election
What's the evidence for this claim?
Steve Sailer has a run-down of the circumstantial evidence here https://www.stevesailer.net/p/the-worlds-least-popular-true-conspiracy (Note that this did not sit well with his commenters, most of whom seem to be corona truthers and anti-vaxxers of various stripes, so he can't faulted for playing up to his audience.) Also see this from MIT Tech Review https://www.technologyreview.com/2020/10/19/1010646/campaign-stop-covid-19-vaccine-trump-election-day/
Thanks! See also this article from Prasad with a breakdown of the pressures on the FDA, as well as the many attempts in media to undermine vaccine confidence ahead of approval, because they knew people on the inside who were telling them they were going to hit their pre-specified targets ahead of election day: https://pmc.ncbi.nlm.nih.gov/articles/PMC11368972/
Eric Topol blocked me on Twitter for retweeting Garett Jones on the effect of his well-publicized campaign to prevent the FDA from approving the vaccine earlier (Topol's argument at the time was that Trump was going to be exercising illegitimate political pressure on the FDA to approve it earlier).
So your point is, “people have come to distrust the government, and when polled about the state of the economy they instead expressed the opinion about the system”? But it raises the question, has this distrust grown abruptly, and if so, why? Otherwise if the government has always been distrusted, it can’t explain the rise of the vibecession.
I think that's a fair criticism. But keep a few things in mind:
1) The consumer sentiment survey isn't gospel. Surveys aren't that reliable, and it's possible that there are other, equally valid measures of "the vibes" that show a different trajectory. I don't know what they are, but we ought not weigh this one survey datapoint really heavily out of convenience.
2) Many of the narratives about home prices, generational wealth transfer, people doing worse than their parents, etc. have been endemic on social media and the subject of innumerable think-pieces in big outlets for far longer than 2022. It's hard to quantify this, granted, and it could be that I'm just focusing on one signal in a sea of signals and the overall trend is non-significant. But I could provide you with lots of anecdata that this is true!
3) I don't think the "vibecession" and the "feelings of unfairness" you describe are at all easily separable, and I don't understand why you think they are. For one thing, as some other commenters have pointed out, including one highlighted in this post, some survey data suggests people think they're doing fine personally, but think broader society is what's doing terribly. For another, whether you "can afford" something as ill-defined as "a house" is highly socially determined -- what you really mean is "I can't afford a house that has the characteristics of houses people in my reference class appear to be able to afford," which is a totally reasonable thing to complain about, but not separable from your broader, vaguer feelings about societal fairness.
Thanks for the reply. Just wanted to clarify the final point there: '...whether you "can afford" something as ill-defined as "a house" is highly socially determined...'
I'm not sure if I'm misunderstanding or just disagreeing here. Specifically speaking to the period 2020+, my point is that the cost of housing (buy or rent) seems to completely support the ~bad vibes~. This can be looked at in a pretty objective way without resorting to unanswerables like "what do the words 'house' or 'afford' really mean anyway?" Here I'll just copy/paste my comment from the original post:
'I'm also skeptical about the rent chart and would like to see the source data. I've seen plenty of articles stating that, for example, the average post-pandemic rent increase in the largest US metro areas -- housing half the population and probably significantly more than half of the younger set -- is something like 50% (my rough calculation from https://www.cbsnews.com/news/rent-apartments-cities-near-me-biggest-increases/ ). This has to be inflation-adjusted, but I think if you say "most urban young people saw their rent increase by 50% in 3 years" it takes on a much different flavor than the "this is a New York problem" theory.'
Anecdotally, I for one didn't dramatically revise my expectations of where I hoped to buy a house or what type of house I wanted to buy in the period since 2020; I merely watched the homes in the neighborhoods I had been eyeing rise 50-100% in price, all while the cost of borrowing increased dramatically. Weirdly, I did not see the same growth in my own earnings.
For what it's worth, I downloaded two commonly used measures of rents, the Zillow Observed Rent Index and the residential rent component of the CPI for Urban Consumers. I'll do a post about this on my own blog this week, because the results were interesting. ZORI goes back to 2015, so 2015 to mid-2024 is the period of my analysis. I actually have rental data through 2025, but the income data stops in 2024. I deflated all figures with the CPI-U, but that doesn't affect the relative positions of anything, just makes the analysis a little cleaner. Some takeaways:
1. Rents have risen in real terms by any measure -- by CPI, by ZORI, and also when just restricted to the top 40 or top 10 largest metro areas.
2. Real incomes have risen by a comparable amount over the same period. Real income has actually risen FASTER than the CPI rent measure and the ZORI in the top 40 metros (14% vs. 12% vs. 8%, respectively), but SLOWER than the overall ZORI (22%) and the ZORI for the top 10 metros (15%).
3. To my surprise, as I just said, rents actually rose SLOWER in the top 40 and top 10 metros than in the overall sample. But the top 10 rose faster than the top 40. I looked at the correlation between city size rank (not actual size, notably) and overall price increase. In the whole dataset, R squared is 0.51, with smaller cities seeing less increase. However, I noticed there appeared to be no relationship above rank 200 or so. Sure enough, restricting to the top 200 the R squared is exactly zero. For reference, the 200th largest metro area in the sample is Macon, GA, population 234,000.
So overall I'd say this data doesn't particularly support the idea of a huge rent increase in the big cities in the recent past. And to the extent that it increases, it's mostly or entirely offset by higher wages.
I'm not aware of any reason to doubt this data in particular. Happy to show you the graphs and specific data!
This seems very rigorous! And yet, Zillow itself took Zillow data and came to what seems like the opposite conclusion: https://streeteasy.com/blog/rents-grow-faster-than-wages-across-us-nyc/ (They explain their methodology near the bottom.)
I'm finding it hard to explain the difference in conclusions. Some possibilities:
1. The difference is in those last 10 metro areas. (You looked at top 40; they looked at top 50.)
2. The "cooling off" of rent increases (and "catching up" of wages) was so stark in the first half of 2024 that the wage & rent gaps completely reversed themselves.
3. You made a mistake.
4. They made a mistake.
#1 seems unlikely to me; #2 seems very unlikely (those gaps are sizeable in your analysis, and even bigger in Zillow's). But I don't feel qualified to judge and am hoping you address it in the blog post! If I'm feeling super ambitious and still unconvinced I might take a crack at it myself.
Thanks for the pushback, it's interesting and helpful!
What follows is probably too long and detailed for a comment. The summary is that I think the different results come from different methods, and while I'd argue my methods are better, that's open to interpretation. In any case, I think the exercise should reduce your confidence that rents are definitely going up a lot vis-a-vis wages.
--
I don't think a mistake is the explanation. I was able to reproduce their figures using the sources they cite. I don't think my analysis is erroneous. All I did was some averaging, and it's pretty easy to spot-check by just dividing the price or income figure of choice in 2024 by the same in whatever base year you want.
I'll write in more detail in any subsequent post, but after brief review I'd say the differences come from different analytic choices. Consider:
1. Different starting years. I graphed everything I looked at continuously from 2015 to 2024, but focused on comparing those two years. I didn't choose 2015 arbitrarily, but rather because that's when the Zillow data starts. The article you linked either looked at 2019 to 2023 or just the single-year comparison of 2022 to 2023. Also, they switch between those two comparisons a few times in the article without explanation, which is generally a bad thing.
2. Different income measures. There are many reasonable national and regional income measures. They chose to look at the BLS measure "Average Hourly Earnings of All Employees: Total Private", whereas I looked at the Census Bureau's "Median Personal Income" from the CPS. The two measures give pretty similar growth rates between 2019 and 2023, but if you use my years of 2015 and 2024, the differences are large. The BLS figure rose 39% over that period while the CPS one rose 49%, compared with a 60% rise for the national ZORI over the same period, and a 46% rise for NYC (all these are nominal figures). So in the NYC case, the measure you choose may be the difference between it outpacing income and not doing so.
I'd again argue that their income measure is worse for this purpose. First because it's a mean, not a median. To me, it doesn't make sense to compare median rent with mean earnings, and means are usually worse for this analysis regardless. Second, it's data collected from employers, not employees, so for many people it won't be reflective of their total income (e.g. self-employed people, people with multiple jobs).
Read Kevin Erdmann who has good explanations for the “rents rising everywhere. Not just in the expensive places” phenomenon.
https://kevinerdmann.substack.com/
Was pleasantly shocked to see my name and a excerpt from my comment on the original post on here!
Was then immediately bummed it didn’t get a response blurb haha
In any event, thanks!
That just means I don't have a devastating takedown of what you said!
> I’m suspicious of including “housing (construction)” on this list - couldn’t you use the same argument to reclassify any manufactured good as a service good?
It's my vague understanding that, as an empirically observed fact (at least today, I don't know how far back it goes), things that are made in factories and then shipped elsewhere generally exhibit falling cost curves over time, while things that are made onsite at the location where they're demanded generally do not. I don't know anything about why this is the case, but (assuming I'm not completely misinformed about this) it seems like a good sign that it's correct not to equate these two categories.
Housing is a form of manufacturing. Factories shouldn’t really matter.
Brian Potter ("Construction Physics" on Substack) recently published his first book and I just finished it the other day. Highly recommended, I learned many interesting and thought-provoking things.
https://press.stripe.com/origins-of-efficiency
Turns out that the investigating and researching and writing of that book, were sparked directly by Potter's personal involvement in trying to make housing construction gain efficiency the way so many other forms of manufacturing have.
You can read about that here:
https://www.construction-physics.com/p/my-book-the-origins-of-efficiency
Here's the lede of that Substack article:
"Seven years ago, I joined a well-funded, high-profile construction startup called Katerra. At the time I was a structural engineer with about ten years of experience, and over the course of my career I had become increasingly disillusioned with the inefficient state of the construction industry....
Productivity statistics told much the same story: unlike productivity in other industries, like manufacturing or agriculture, construction productivity has been flat or declining for decades, and it’s only getting more expensive to build homes, apartments, and other buildings over time.
Katerra had a plan for changing all that...."
Kinda. In Build Baby Build, Bryan Caplan argues that government regulations, not just supply and demand, are the primary reason for high housing costs, especially in desirable areas, and that the benefits of deregulation would be to halve average housing prices, reduce inequality, increase social mobility, promote economic growth, create construction jobs, decrease homelessness, increase birth rates, help the environment, and cut crime.
Traffic congestion can be managed by pricing mechanisms (e.g., charging for parking and driving) rather than by restricting housing supply.
Besides all of the other factors folks have noted, housing does remain a very labor-intensive form of “manufacturing”, so it does indeed have more characteristics of the service businesses than does most of the rest of manufacturing.
Only if and when a very significant percentage of housing were pre-fab homes would that be likely to change any time soon.
This is kind of correct:
Even if Baumol cost disease refers to *manufactured* vs. *service* goods, for rich countries the real distinction that should matter is *tradeable* vs *non-tradeable* goods and services. (Meaning: Tradeable across countries).
This is because international commerce will make the price of tradeable goods and services fall to the world average cost. For rich countries, this means they will get cheaper. In the past, basically no service was "tradeable", but the rise of things like telemedicine is changing that.
On the other hand, the price of *non tradeable* goods will differ across countries, becoming more expensive on the richer countries. Usually this means services (think of a barber), but it also means housing (because of location, location, location...).
That’s surely true but only part of the answer. Productivity for manufactured goods has increased within countries as well.
I would expect that the manufacturing industries with external competition would become more efficient because otherwise they go out of business. See steel in the US and the big-3 auto companies.
The US health care industry is still (mostly) shielded from competing with foreign health care. Same for the US K-12 education industry.
A good counter-example that supports your point is that SpaceX started competing with ULA/Lockheed/Boeing even for US contracts (e.g. DoD and NRO launches) that were not going to go to foreign launch providers such as Ariane.
I wonder how many domestically produced and consumed goods have seen manufacturing productivity gains without an external competitor?
To put it bluntly, housing, at least in US, is first and foremost services for segregation from badly behaved people ('good schools' etc.) The physical house could be built cheaper, but good neighbors can't, and the culture has very little stomach for enforcing high standards of public order and decorum demanded by young parents (singles care much less) precisely on the kinds of people who need such enforcement the most, so housing price is the only thing left to balance supply and demand. It sucks for everybody, including those same vibecession singles who can perhaps afford their urban rents but know they can't hope to buy a house in a 'good school district' for a decade, but nobody has yet figured out how to unpick the mess. Because real causes are so politically radioactive, people usually bark up wrong trees (e.g. the various factions of yimbys) or just shut up and do whatever it takes to pay their way in, or give up and enjoy single city life.
That's not really relevant to the specific point being discussed in this subthread, which is specifically about the role of construction costs in affordability.
Apparently I should have been blunter. My goal was to point out that construction costs are a red herring.
How do we know that? They could be smaller than land value costs but still big enough to matter. (This is certainly true of, e.g., grocery and energy prices.)
By deduction and observation. There is plenty of dirt cheap housing in US where no-one wants to live, either because it's too far from existing concentrations of productive capital, or because it is unsafe. Unlike grocery and energy, which are normal fungible goods, housing _in desirable locations_ is a positional good almost by definition. Density cannot increase indefinitely while retaining desirability, and nobody has figured out how to create new desirable locations from scratch. In this state of affairs, any potential savings from lower construction costs per square foot will be offset by higher 'land value costs' (if such a split even makes sense) or by an increase in the required amount of construction (more square footage, more granite countertops, etc.) I.e. construction costs are partly endogenous, as they depend not only on technology or productivity, but also on what is demanded by law or regulation to build a salable house in a locality, and law and regulation can be changed to protect existing homeowners' investments. This means that the split of the single price people pay for a house into components is artificial, unless perhaps we're talking about real estate developers buying whole tracts of land and converting it to housing. Very very few people in US buy land and structure separately, or buy land and build a house on it (the latter is common in Japan btw).
Does this also imply that an increase in construction costs per square foot must be offset by lower land value costs? That doesn't sound right.
I don't your theory of housing as a social separator explains the vibecession. You're saying that the problem of separating out desirable and undesirable people has somehow gotten more acute over the last several years? Hasn't this been a central concern of all human societies since the dawn of time? If anything, we're much less class-conscious in America than at any time in the last few hundred years.
And that lack of class consciousness is, arguably, part of the problem. Someone who lacks "smoke consciousness" might be in big trouble if there's a fire.
I am not out to explain the vibecession with this model. But any discussion of housing in America that ignores the considerations that go into it is in my opinion going to be at best unproductive.
By and large manufactured homes have been banned from most places that people want to live. So you are forced to build with low-productivity techniques. And in many cases (for example with elevators), labor rules specifically require especially low-productivity techniques.
With tradable goods, competition causes manufacturing to move to places that don't have such oppressive regulation, but in the case of housing the ban on manufactured homes prevents this.
Here's an article from the Minneapolis Fed about how poorly designed regulation on manufactured homes has hurt our ability to build new housing:
https://www.minneapolisfed.org/article/2025/learning-from-the-first-and-only-manufactured-housing-boom
And here the Richmond Fed discusses some other potential reasons for why housing construction productivity has fallen:
https://www.richmondfed.org/publications/research/economic_brief/2025/eb_25-31
Today I achieved a rare window into a sense of enjoyment and high morale. I situated myself as a culturally Anglo Canadian in the sense of belonging to the group as a worthy tribe come hell or high water. Although the culture is extensively disparaged I experienced a sense of security in that I believe it is good and worth being a part of even if it fails or fades. I felt like treating other people like I might be going with them to the trenches in the war. This sense of morale and comraderie also revived my fellow feeling for non-Anglo Canadians, due to the confidence that our shared Anglo-shaded culture can be strong enough and attractive enough to bring us together as a cohesive national-tribal entity with a shared mission and belief in our joint legitimacy.
> Question for Aristides and others: why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.
Matt Yglesias had a good post about this (https://www.slowboring.com/p/the-high-cost-of-promoting-homeownership). It's worth reading the whole thing, but I'll quote the two most directly relevant paragraphs:
> One question is whether you, a person living in the actually existing United States of America, should either own a home or have a clear aspiration to become a homeowner. And here I think the answer for most people is pretty clearly yes. Now, of course, if you don’t have the means or the opportunity, then you don’t have the means or the opportunity. But if you *do* have good credit history and enough savings to make a downpayment, then buying a house is generally the smart move. This is in part because of the home mortgage interest tax deduction. But the bigger deal, in my view, is that you can get a government subsidized loan to purchase owner occupied housing and turn your modest savings into the seed of a larger leveraged investment. There is no equivalent to Fannie Mae for buying a diversified portfolio of stocks. So even though the diversified portfolio of stocks would be a better investment all else being equal, the availability of a loan on generous terms is a big advantage to buying a house.
> Another issue is that owner occupied housing gets very favorable treatment for the purposes of capital gains taxation, so after tax investment gains in owner occupied housing are larger than they appear at first glance.
He goes on to explain that these laws and programs exist because of the widespread ideological belief that mass homeownership is a positive good in and of itself. In the rest of the post, he argues that in fact it is not, and I agree. In Georgetopia, probably most single-family homes would be rented, perhaps with 30-year leases since families do value stability.
As to why owner-occupied apartments (i.e., condominiums) aren't more popular, I don't know, but my guess would be that dealing with the homeowner's association that has to exist in order to solve collective-action problems is just a huge pain in the ass and most people would rather not.
As a Millennial who is still renting, I would keep renting forever rather than buying something with a shared wall (or an HOA). If I buy property, then it's my property, not community property. (I grew up in a house in the suburbs, so committing to anything less than that is a failure.)
I was a homeowner for years and operated from the same determination that you have. Raised my first child that way etc, because that was how I was raised and it was just obvious that anything short of it would be a step backwards.
Then unexpectedly, almost randomly to be honest, when approaching 50 I stumbled into living in a townhouse which is part of an HOA. Had no expectations good or bad because hadn't done it before nor had any of my closest friends nor my spouse, and we didn't start out thinking of it as anything permanent.
Anyway it's turned out to be great. Years later we're in the same townhouse and still love it and are raising a child in it, and neither my wife or I would go back to single-home owning unless under duress. TBH we'd probably rent before we'd do that, but the overall thing is that all things considered we like this way more than either of those two options. Which was a total surprise for both of us.
None of which is to say that you or anyone else has to come to the same conclusion. More just that (a) YMMV, always; and (b) sometimes what seems obvious in one stage of life, can turn out very differently during another if we let it.
Do you have any concerns about increasing rent over the years? One thing about a U.S. mortgage is that the monthly payment stays the same. Obviously you have all the maintenance expenses; I understand that. But still, the predictable mortgage payment and the tax-deductible nature of the payment weigh heavily in favor of ownership.
What advantages do you find from a townhouse and a HOA over a single-family house?
Well, townhouses are cheaper to build and maintain, and therefore to own, all else being equal. That would be the main benefit.
Probably, but the way Paul was talking about it sounds like there were other benefits besides price. I'm curious what those are.
Well....and without quizzing my wife since she's not home at the moment....
-- for us the townhouse, even a small older one like this, has turned out to be the right amount of house. And a decent-sized patio having a nice shade tree is perfect: a pleasant outdoor space to relax in or have a small dinner group on, without any of the obligations/effort of a big deck or backyard. And the townhouses layout includes large-yard-sized greenspaces just steps away to play with kids in, throw a ball for the dog, etc.
-- the HOA handles all snow removal (a biggie where we live), fall leaf clearing from our patios if individually desired, maintenance of our patio fences and all the sidewalks, etc. And since doing those services in bulk they use professional contractors with proper equipment, meaning the snow removal and repairs and whatever are done better and much cheaper per household than I ever could as a SFH owner.
-- homeowners insurance is way cheaper, and from year to year doesn’t increase even as much as general inflation (I assume because the HOA is responsible for the roof, major plumbing and other structural stuff which from an insurers’ perspective is the big-ticket claim risks). During my few years as a renter I paid nearly as much for renters’ insurance as our current homeowners insurance costs.
-- the HOA handles all landscaping, including a community garden which any member can participate in, etc, unless a given unit owner wishes to take charge of the smallish greenspace directly in front of most units. Somewhere around half of our association’s members do that, and my sister (a serious lifelong gardener) happily does it in the smaller HOA that she’s a part of. There is however no _obligation_, meaning if you’re not into that the greenspaces immediate to your home will still be pleasant. This includes in particular shade trees which people get very worked up about whether or not they personally have the inclination/time/skills to maintain them.
-- part of what HOA dues pay for is insurances covering the entire association: major repairs, general liability, etc. Since those policies are purchased in bulk so to speak, it's costing us individually (when you do the arithmetic from the HOA’s annual budget funded by the dues) much less than the marginal reductIon in our individual insurance costs.
-- the above arrangement also removes, for us, the threat of slip-and-fall type stuff in front of our home. Such instances are very rare but when they occur it’s the HOA’s problem, they hire the lawyers to fight it and etc. Same with anything like a city water main bursting and doing local damage: it’s the HOA’s headache and expense to deal with, full stop.
-- roofs and gutters, oh boy....every veteran homeowner knows what a huge headache they end up being. Repairing them, cleaning them, occasionally having to replace them ($$$). That’s all on the HOA and if the association is sensible they are building capital-reserve replenishment into the monthly dues so that special assessments don’t have to be used. (Our members loath special assessments and won’t vote in any board member who doesn’t feel that way about this issue.)
-- the same point about cost efficiency applies: the HOA when the time comes for one of structures (‘clusters”), replaces an entire roof covering two dozen homes. Did I mention that replacing a roof suck$?? Also since the HOA is a regulated entity with steady cash flow it doesn’t fall into short-sighted ideas like trying to milk a roof past its warranty (my wife, from her time as a young homeowner with her first husband, has some cautionary tales to tell).
-- though I grew up with having an attic and previously was a homeowner with one, I’ve found that not having one has greatly improved my habits in terms of defaulting to retaining old stuff just because there’s an easy place to stick it. (Put another way, in hindsight I realize that a silly fraction of SFH mortgage payments was paying to store a lot of old stuff that was going to end up being dumpstered after my funeral.) YMMV on this point of course, e.g. my wife for a while considered it an annoying drawback. But as we get older she is coming around to my view of it.
I owned a townhouse in Boulder for 13 years and liked it a lot, but I don't have kids. The main advantages were amenities (workout room, pool) and never having to mow the grass or shovel snow. Also, my back patio opened up on to a nice park.
Buying an apartment can be bad as somewhere you want to live.
If an elevator fails, the roof fails or something happens to the building, then as a unit owner you are liable to a percentage of the costs. The exact costs and contractor are out of your control. The management org can place liens on your unit. They can choose the worst contractor, the one with the biggest kickback, their relatives or a combination of the above.
you are supposed to have a multi-year ‘sinking fund’ and insurance to cover stuff. People may vote to eliminate or reduce them in order to reduce their dues. The management org may mismanage or embezzle funds.
The above can be combatted by auditors, additional insurance and the courts, though the process takes your time and money.
You could also end up with creepy neighbours or their friends hanging out in the lobby or elevator, and units being illegally sublet to become crack dens or airbnb lettings with lots of strangers coming and going.
or you could buy a house without a HOA that you own and control fully
As an investment you can buy many apartments or an entire building to even out the risks, and you don't have to actually live there
If you are renting an apartment then you are not liable for building stuff, can just move out and don’t have to convince someone else to buy the apartment from you and take the risks on
Any explanation for this will be US-specific. I'm British and don't have this association. We have lots of rented houses over here, and lots of owned flats/apartments (including very high-end ones, >£1 million).
In large towns/cities it's common for prospective homeowners to start by buying a small flat and then upgrade to a house after a few years (we did this) rather than try to jump straight to the house.
I was also surprised (as a fellow Brit) of the US assumption that in any unit that had a shared wall, that must inevitably mean a HOA type arrangement as well.
Almost all British houses have a shared wall, semi-detached (which have 1) and terraced houses (which have 2) are very common.... fully detached (with 0) less so.
I've never heard of one that had a US HOA arrangement. Its just a shared wall. Why would you need a HOA (which I can perhaps understands for apartment buildings)?
I guess there are laws and such governing what you can and can't do to it in the UK (party wall rules).... but after living in my own semi home for 10 years, and in my parents semi for 20 years, I've never seen anyone have recourse to them. Its just treated like any other wall for 99.99% of all household maintenance/decoration activities.
I'd no idea why a HOA would be mandatory.... any more than it'd seem to be mandatory for having a shared fence/wall in the garden between 2 properties which presumably even fully detached US houses have.
The American HOA system seems quite arbitary to me, and I think to any other non-US based posters.... again, with the possible exception of apartments in a block where there are lots of shared areas critical to accessing your apartment (lobbies/elevators/stairs/corridors/gardens etc).
All true, ownership is artificially encouraged by US policy. But the question Scott has is why ownership in the US is so highly correlated with detached homes. The mortgage interest deduction is available to townhome and condo owners as well. You suggest it's because of the inherent challenges of the shared parts of a condominium/townhome, but I'm not sure that's it. Those forms of ownership are a lot more common in other countries (Europe). It could be a cultural difference, but a regulatory regime difference would also make sense of that pattern.
I assume the explanation of the correlation is that there are bigger economies of scale for ownership of units in the same building than there are for ownership of separate homes. Some percentage of rental owners are big institutions, and they will be disproportionately concentrated in big apartment buildings, and that will lead to a correlation, even if not one as strong as the observed one.
I agree. I searched "scale" to see if anyone made this point. efficiency in housing service provision would be entirely in cases with lots of similar units close together. Without that theres much less reason for owner and occupant to be different. US mortgage policy mostly removes the liquidity constraint, remaining use case for renting a house is short timeline (college student for example). If you are long term renting a single family home, it seems like a market failure unless you have something idiosyncratic going on.
> . But GDP growth last quarter was 4.3%
Careful--many economic statistics from last quarter are suspect to due a combination of Trump's usual bullshit (https://en.wikipedia.org/wiki/Bureau_of_Labor_Statistics#Firing_of_Commissioner_McEntarfer) and the shut down (and wider staff cuts) preventing data from being collected
The fuckery you linked to--which I agree is bad--is at the BLS, while GDP is calculated by the BEA. As far as I know there isn't a similar charge to be levied at the BEA.
Its also extremely hard to fake US GDP estimates. There are tons of inputs, the bulk of which come from data easily accessible outside of government sources. Other institutions (banks, think tanks, etc) frequently do release competing estimates on the same data, although these generally come pretty close to the "official" BEA analysis. So if the BEA were forced into making some ludicrous change to its methodology clearly tilting the scales in favor of claiming an outlandish amount of growth, it would A) certainly make the news and B) not be an actual problem, other than being embarrassing. People would just elevate some other non-Government institution as the new standard bearer for GDP estimates
Yes
> there was a sudden turn from the early 2000s world where everyone loved technology and thought that the information superhighway was the utopian world of the cyber-future, to the late 2000s world where everyone hated techno-fascist tech-bro techno-oligarchs using The Algorithm to addict our children.
Not the same timeline, but the core reason to like Silicon Valley companies (cool new tech) faded into oblivion after the iPhone. None of the new stuff is ever anything important: Apple Watch, iPads, VR headsets (which should have been awesome?), Steam, Nintendo Switch, 5G, and all the redundant social media sites.
Compare that to the extremely useful stuff we got before: Google Maps, videos on demand, Wikipedia, flat screen monitors/TVs, wifi, MP3s, and texting.
This is a good point. I feel like people get jaded even by amazing technology quickly though. It's just been a couple of years since we invented the magical computer program that can hold up a conversation and answer questions on any possible subject, which is something which we would have found absolutely fucking amazing in 1999. But everybody played with it for a few days, then immediately got bored and started calling it slop. How did we get so jaded so quickly?
I'm thinking that it's less about the technology and more about the intra-elite competition that has made journalists extremely cranky about Silicon Valley.
>the magical computer program that can hold up a conversation and answer questions on any possible subject
Which, of course, only exacerbated the vibecession. If the program really is so magical, won't it take your job in a couple of years? A rare concern relevant both to journos and normies.
> But everybody played with it for a few days, then immediately got bored and started calling it slop. How did we get so jaded so quickly?
Did we? My happily retired dad will occasionally send me an essay on some point he wishes to argue written by chatGPT. I work in a tech company, our engineers are using AI tools.
I think what happened is:
- When it comes to AI Art. Most played for it for a few days then got bored because to them making art literally was a toy. And a small motivated group drove the slop narrative hard because it threatened their jobs. This includes journalists.
- When it comes to using AI productively. Having it write you an email or summarise one isn't sexy so it didn't drive any discourse positive or negative.
Nitpick: GPT and its like are not primarily computer programs. They are evolved or trained, not programmed. You can't write them down in a form that a human programmer could understand and repeat with pen and paper. One test is that you can debug a program when it produces an incorrect output, but you can't debug GPT when it hallucinates. You're in a position much closer to neurophysiologists with their patch clamps and optical neural probes and fMRI.
(I know this is beside the point of your argument, but it's a pet peeve. Sorry)
>They are evolved or trained, not programmed.
Can I put in a plea for "curve-fit" as well? :-)
Just for your amusement: Shortly before I retired, I had a couple of conversations with my manager where
a) He was queasy about fudge factors in some of the equations we used
b) He was favorable towards AI
yet AI can be viewed as "fudge factors" by the gigabyte... :-)
( Not that I'm hostile towards it - Even with current hallucination rates, I find ChatGPT and Claude and Gemini quite useful, albeit mostly in hobby and online conversation contexts. )
Curve-fit is definitely a better fit than programming.
Many Thanks!
Still a computer program, even if the vast majority of it is a big list of parameters.
Very persuasive argument!
You answered your own question. "But everybody played with it for a few days, then immediately got bored"
If 2025 LLMs were genuinely useful or entertaining to most people, this part wouldn't have happened. You'll be able to watch the monthly usage count grow from smartwatch numbers to smartphone numbers as this changes.
I'm not sure what you are trying to say? Usage numbers for AI are growing, aren't they?
On the other hand:
> [...] I literally heard it from NYT reporters at the time. There was a top-down decision that tech could not be covered positively, even when there was a true, newsworthy and positive story. I'd never heard anything like it.
https://x.com/KelseyTuoc/status/1588231892792328192
You know how factory farming treats animals poorly, but people just ignore it because they love meat so much? Few would have cared what the NYT rants about if VR had been amazing starting in 2016, self-driving cars went big by 2020 like Google had predicted, etc.
People still have mostly positive opinions on specific tech companies.
Again, as I noted on the original post's comments, there's a difference: in the 00s, the "writing class" - ie. the professions where you get money for speculating on topics like "vibecession", or at least have some idle time where you need to look busy on the computer that you can use for poasting on the Internet - saw technological development as a boon that will only displace the blue-collars and thus drive consumer prices down, whereas now the development of AI means the writing class sees its own jobs as acutely threatened.
True. But it happened before the recent AI scare. I feel musk and Peter Thiel and other right wing tech leaders changed the narrative. What was once liberating was now capitalist hegemony. And capitalism becomes more more unpopular post 2008.
Besides that the crypto fad soured people, myself included. If all that’s left of technological innovation is snake oil then it’s not going to be as popular as an iPhone. And *even there* sentiment has changed on phones, what was once liberating is now intrusive and along with social media - is seen as destructive.
I'd say that even before the recent events (say, from ChatGPT 3.5 on) there was a general *feeling* that AI development might eventually lead to problems for creatives. Sure, for a long time that feeling was easy to answer with "ah, no, look at Google Translate, no dice", but the undercurrent was there. Then things started feeling more and more real after November 2022.
When the iPhone came out, humanity launched about a hundred objects into space a year. Today its about 3000 a year.
Cool new tech hasn't faded anywhere. Space, self driving, electric cars, drones, robotics. There's tons of cool stuff. Though the fact you don't see it may be an point of data in favour of the "it was the NYT" argument.
> Space, self driving, electric cars, drones, robotics
Lol yeah why aren't ordinary people rushing to buy trips to space, their own waymo, overpriced electric cars, useless drones, and robotic arm toys. Must be the NYT at it again.
1) Ordinary people don't have to buy trips to space to be excited about new space technology.
2) Citation needed that electric cars, drones, and robots are bad technologies.
No doubt there is a "lowest hanging fruit already picked" factor. When I ask myself what technology I could even conceivably want, (that aren't immortality or AGI), none of them seem as significant as what I have now.
For the record, VR IS awesome. But you have to know how to get the best experience, which isn't trivial.
> none of them seem as significant as what I have now
I think hypothetically, drone delivery would be. Removing some huge percent of cars from a city's traffic would have been amazing and measurable, and creating just-in-time grocery shopping options would have reduced food waste a big percent too.
But like fusion energy, we're probably not going to get it until after AGI, and only if we survive every single AI "great filter"...
>creating just-in-time grocery shopping options would have reduced food waste a big percent too.
This might be a US only thing too. Outside the US we already have just-in-time grocery shopping. Its just called "the corner shop" and everywhere I've lived (in the UK and a little elsewhere in the EU) its about a 2 minute walk from your house.
Currently I have two within that "very quick walk" range and I live in suburbia. 1 a "NY bodega" like shop, and another a full mini-mart. I've never lived anywhere the "corner shop" was more than a 4-5m walk away.
Drone delivery isn't going to make this particular difference outside the US except for extremely rural people (i.e. rural people who live outside the local village).
I don't know how you can claim my viewpoint is too US centric, and then immediately claim to speak for all of "Outside the US" after living in a few European suburbia. Shouldn't you have immediately recognized the irony? I don't understand.
Well, I can't defeinitively and conclusively speak for everywhere.... but the only place I am aware it definitely is NOT the case is the US. I am fairly well travelled, and "local shops" interspersed in residential areas sems pretty ubiquitous outside the US. The US very definitely appears to be the outlier here which is what I noted.
Are we not allowed to note phenomena that appear to be confined to the US *unless* we definitively rule out its occurence in all of the remaining 190+ countries first? Seems like an isolated demand for rigour.
Buddy, just look up the info you're looking for online before making your argument. It would be faster than trying to warp your own personal experiences into some kind of universal experience while being 100x more likely to be true.
You're also apparently under the impression anyone would believe a random internet poster's life experiences or authority on a topic.
AI is pretty cool!
Too late to contribute to the original discussion, but I wonder how much of this is downstream of the increasing ubiquity of debt?
Just squinting at some student loan numbers, it seems like during the time of the mid-2010, average student loan debt roughly tripled. This seems to match up with the rise of the vibecession.
I'm having a weird life, and have basically never carried debt, and my personal vibes have always been great. I've also been able to make some crazy life moves that have been personally and professionally fulfilling that I don't think I'd have been comfortable risking if I had massive debt hanging over my head.
I can see path where debt locks you into a path where you have to earn to repay the debt (meaning you might take a job you hate) but you don't get the same benefit future generations got from this trade-off (they chose the bad job they hated instead of a job they would have loved, because the bad job was compensated better.) Previous generations got to make the choice, current ones don't and don't get to keep the extra money.
I can even see the debt being self reinforcing; because your income goes to pay back the student loans, you can't build up the nest egg to pay cash for a car, so you get a high car loan. Now you're paying both off, and can't build for a mortgage down payment.
Love the idea and a brief glance at the data tells an opposing story.
Broadly, the Federal Reserve tracks "Household Debt Service Payments as a Percent of Disposable Personal Income" (1) over a 45 year period and we're currently in a normal range.
Specifically, from the US Treasury Department (2) graph 3.1.5, it looks like non-mortgage debt has 4 factors: Student Loans, Auto Loans, Credit Card Loans, and Other. It looks like Student Loans and Auto Loans have been growing rapidly while Credit Card debt and Other debt have remained constant. Since it looks like those numbers are nominal, that would equate to credit card debt and other debt declining in real terms.
Again, though, I'd defer to someone with more experience in this stuff.
(1) https://fred.stlouisfed.org/series/TDSP
(2) https://home.treasury.gov/system/files/261/FSOC2021AnnualReportCharts.pdf
I haven't verified this, but I also recall having seen several articles stating that the real cost of attending college has gone down in the last 10 years or so. Not crazy to assume that college debt would share a similar pattern.
I've also been debt-free and have accumulated a significant financial cushion, but I've also spent all of 2025 unemployed, applying for lots of jobs (even entry-level ones) and never receiving a single offer. It sucks.
CJ L had an interesting comment on the original post about the cost of debt. https://www.astralcodexten.com/p/vibecession-much-more-than-you-wanted/comment/184414228
Two comments on the housing things:
Re: sticky housing prices
I became a landlord as I had to move for work. The management agency that I used raises the rent each year by inflation, but rental prices have gone up way above that. I choose not to evict the old lady with a cat that I have been renting to, as i make a profit and she has paid on time reliably for the past few years. My country has strong anti-eviction laws. If I forced her out and let out my property again at the market rates, it would cost me money. Then I could get tweakers as my next tenants who destroy everything, turn my house into a crack den / meth lab and are near impossible to evict. The risk isn't worth it for me and the old lady is friendly, so I would feel mean forcing her out.
Re: house prices and dual incomes
House and rental prices in non rent controlled areas are often set by what people are willing or able to pay. In the countries where I have lived, supply has been constrained by planning law. When buying, this is often how much a mortgage lender will lend you based on your family’s salary. It follows that if your family has a second salary due to your wife working, then you (and everyone else with a working partner that has that second salary) can use it to bid up the prices of houses that you want to live in.
As rental costs are also linked to buy to let mortgage interest and the returns that you can get by investing in a rental property compared to a savings account or investing in the stock market, then higher purchase prices for houses will also have some influence on higher rental prices.
Also - If rental property income cant beat selling the property and depositing the money in a low risk savings account or similar, landlords will sell up, supply will decrease and there will be further upward pressure on rents.
Planning law does not grow on trees. Homeowners in some form lobby for it to protect their life investments for much the same reasons you keep your old lady renter.
I would love to be able to knock my house down and build whatever I could on the land and have never had any attachment to it. It has no architectural value. Strangely people seem to be attached to particular houses or neighbourhoods.
Where I live now you can freely knock your house down and build a 20 storey ‘tube house’ pay by hour love hotel where it stands with practically zero building regulations or code. Rent is about 1/20th of the cost of where my house is, but land costs much more.
Another note on sticky housing prices, maybe by American standards it would be fair to say basically all of Europe has rent control in some way? Rental contracts are unlimited (not yearly leases where you can raise the price however you want), you can't really raise the rent much more than inflation, and it's really hard to get rid of tenants unless they do something wrong.
When Europeans hear rent control, we think of new lease rents, not existing ones, those can basically never be raised at will.
I hear that it's really hard to get rid of tenants even if they do something wrong if they're refugees or any kind of 'underrepresented minority'. What if someone thinks police are racist? Can't risk that.
“Finally, we really aren’t in one right now, as the economic data has deteriorated meaningfully and the negative sentiment is warranted at this point.” —Scanlon
This comment is pretty laughable, considering the most recent quarterly numbers.
When I read the first part, I thought Scanlon was going to say “because the economy is actually stronger now”. But I guess leftists are gonna leftist.
The irony of the person who coined “vibecession” basing her claim that we are no longer in a vibecession on negative vibes is not unnoticed.
In aggregate the GDP is up and large companies are doing well. Small companies are definitely not doing as well, at least since after tariffs. Also , companies oriented towards lower-income consumers are not great either*. But the aggregates indicate that yes, we are doing okay.
* https://econjared.substack.com/p/is-this-economy-great-or-awful
I, personally feel the vibecesssion. For me the vibes come from perpetual uncertainty, perceptions of current and future instability, and the widespread recognition of the possibility of wider instability, especially going forwards.
The increased risk perception increases my mental model of my financial risk, thereby making me feel poorer. It's like all my assets and investments have a built in depreciation factor due to tail risks. And my future revenue has a larger discount factor, so I feel poorer today ( net present value calculations )
Do you not feel like the vibes are off? Unbothered by poor governance? Does that impact your assessment of your savings today?
I identify as center politically, but am concerned by national and global political trends.
I was not commenting about the reality of the vibecession either way, to be clear.
I was solely commenting - as Scott himself did - that Scanlon claiming the vibecession is no longer a thing because the economy is now worse than it was is flat out false.
My only comment to you is that there is little doubt that the media you consume feed your instability concerns because they believe that it is in their own interest to do so. Which is very different from saying your concerns are wholly illegitimate.
[FWIW, I’m personally very concerned about many many national and global governance issues. But I’d guess my overlap with Scott’s concerns would be only about 50%.]
Your comment that “leftists are going to leftist” reminds me that Trump is in power in the US. This in turn is explained by the partisan economic sentiment graph that Scott showed, which switched with the president. Over here were I to say the economy was better that people think, I’d be the leftist.
I’m assuming this means you are in Great Britain.
You have my condolences… 😏
It’s great. We have castles and Roman ruins.
>Still, did Baumol or the other economists who first discussed the effect in the 1960s predict it would make people feel like things were outright worse, as opposed to just getting better less than would be expected from raw productivity numbers? Seems strange.
>Also, hasn’t the Baumol effect been basically constant since at least the Industrial Revolution? And isn’t the Vibecession only 5 - 20 years old?
I can’t speak for Baumol, but Irving Kristol’s “Two Cheers for Capitalism” suggests something like a ‘vibecession’ was alive and well among American youth, and the American left (particularly academics and other elites) in the 1970s, when he was writing, and argues that a large fraction of this is due to the decreasing availability of high-status social goods—i.e. Baumol’s Cost Disease.
Somewhat similarly, in CP Snow’s essay “The Two Cultures and the Scientific Revolution,” he argues that the literature-focused elite have been upset at their declining power over society since the very advent of the industrial revolution.
What both of these thinkers share is a sort of sympathy for those who they are criticizing, since they may agree that those services which are increasingly out-of-reach (a stay-at-home maid, private tutors for one’s children, going to the theater weekly) are actually quite nice to have, while the more widely available, democratic technologies which replace those goods (vacuum cleaners, cheap textbooks and online coursework, television) are not satisfactory replacements.
So why the vibecession?
I don’t know, but Kristol and Snow might suggest we look first at a change in the structure of the American elite around that time. Academics and the “literati” are particularly likely, in their view, to have a reactionary response to modern culture (often veiled in leftist/socialist/redistributionist ideas or a romanticization of a ‘nobler’ past).
I’m not sure this theory actually works out, but I welcome others input.
I think that:
- THe Vibecession, as Kyla writes, should be considered as the period from 2022-present.
- The phenomenon that Scott calls "The Great Vibepression" has actually been a constant for the youth across history.
The US economy was .objectively bad in the seventies.
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
Good landlords will minimize rent increases for good tenants to control risk. If your good tenants move out, then your unit might sit empty for a while, and your next tenant may be terrible and cost you more money, aggravation, etc. I have benefited a lot from this by always renting from individuals (rather than BigCo) and being a low-maintenance tenant.
(Like most mid-30s millennials, I'm still renting. Our adult lives have consisted of: the great recession suppressing employment and wages; rampant NIMBYism from boomers pulling up the ladder behind them constraining supply and pushing up house prices; and now sudden inflation pushing up mortgage rates and eating away at what salaries we've managed to obtain.)
I do think a lot of common statistics misstate the situation by quoting averages or medians instead of marginal values, which are what people who are actually out in the market will experience. There's also a more common and banal sin of comparing monthly or yearly growth *rates*, which tell you very little without picking a starting point and integrating from there.
>Good landlords will minimize rent increases for good tenants to control risk
This is a completely pedantic response, but not necessarily. The optimal strategy for a landlord depends a lot on market context, their overall portfolio, and their personal financial goals. Once you scale your property portfolio past a handful of properties, most landlords tend to move past focusing on good quality tenants to treating their properties as way to generate income on land speculation. The house isn't the value; it's that in 15 years a commercial developer will back up a dump truck of cash for everybody on your street to fuck off so they can put a 300 unit 5-over-1 with ground level retail up. The income from tenants in the meantime are just a bonus and a way to stay in the green after property taxes. Or they liquidate the houses they have focused on keeping in good shape to have the liquid capital to buy into or start a fund that does commercial development.
No real disagreement here, I just used to work in a weird landlord-adjacent real estate industry and now own a small number of properties myself.
I also previously used to work in a weird landlord-adjacent real estate industry, and my impression was simply that tons of landlords are not profit-maximizing analytic types. Or have a college degree, or are particularly intelligent.
Most small landlords are just not running very professional operations. Lots of them purchased a building in the before times for whatever reason, and are surprised to find themselves still a landlord, and are vaguely aware that they turn a profit somehow. Lots of them are foreigners with minimal developed-country education, who buy real estate instead of stocks because that's what rich people did back in the old country. Or they're just old and unaware of what's going on. But very few landlords I ever met struck me as financially sophisticated, profit-maximizing types
This also matches my experience and that landlord type isn't only restricted to immigrants. Plenty of unsophisticated native born people buy property because it's a very practical, approachable way to build wealth. For some people, the stock market is just too abstract and they can't make sense of it. Unfortunately this is also how we get mini boom-bust cycles in real estate. The STR fad was driven largely by unsophisticated hustle-and-grind types, whose poor business sense and is now why nobody wants to stay in AirBnBs anymore. And now there's a good amount of poorly maintained ex-STR housing stock that's being routinely put on the market now that AirBnB is clearly not a vehicle by which one can get rich quick.
On the flip side, that's inherent security in real estate - even if you can't quite turn an operating profit from rents (and let bachelor/bachelorette parties completely trash your property over the course of a few years), that parcel of land will always be worth something.
What's the percentage of landlords (and landladies!) that manage only a single property or two in addition to their regular job? What's the percentage of rental properties that are managed by amateur landpeople?
My mother owns a spare flat and she's been very reluctant to raise the rent for exactly the reasons Kevin wrote about. I had to hound and pester her, showing her the market prices in her area. I think the only thing that helped is that she had recently retired and had actual time to spare.
A good tenant is a source of passive income for an amateur person of land. A bad tenant or a lack thereof is a source of stress. With a good long-term tenant, you show up once a month to collect a stack of cash and leave. If they leave because you priced them out, you have to spend that earned cash to touch up your property to make it look presentable, you have to spend time showing your flat to potential tenants or hire a realtor to do this for you. During this time the flat is lying fallow. Even if you find a new tenant quickly, there's always the risk they will leave after a few months, and you will have to start the process anew.
So, if you have a day job and manage to snag a renter with a lackluster social life, no pets, no dangerous habits and no need to be a Karen about everything, you probably want them to stay, even if this means you end up renting to them at below-market rates.
I don't know the percentage you're asking for your first question and I suspect we are from different countries since you are using the word "flats." For your second question it really depends on how you define "amateur." In the US, build-for-rent housing is an extremely common real estate investment. In our major metros, most landlords are corporate landlords with access to institutional capital for major development projects. But build for rent really is not common in most of the world, so I suspect this is not the case where you are from.
Those are all certainly normal concerns landlords tend to have. And maybe exacerbated in countries with relatively flat wages but increasing rental housing costs, which is not really a problem where I live.
“…well before 2022. Memory can be faulty, but don’t we need something like this to explain the Trump campaign…”
Dude, prior to 2015/2016 or so it wasn’t a vibecession.
The economy really was punk for years after the Great Financial Crisis.
Real U.S. GDP growth
2007 2.13%
2008 –2.54%
2009 0.11%
2010 2.78%
2011 1.54%
2012 1.55%
2013 3.01%
2014 2.69%
2015 2.12%
2016 2.18%
These growth rates were MUCH less than they had been for the 25 years prior to the 2007.
Obama was dealt a bad hand and generally made it worse. So claims that the Trump campaign is evidence of “vibecesson” are bunk.
I’m with Scanlon on when “vibecession” began as a legitimate thing.
The Friends theme was channeling the same period of job market malaise that also brought you the 1990 film Slackers.
Except by the time Friends was at its peak of popularity, that GenX "everything sucks" period was in the rearview, we were into the Clinton years, and heading into the fun part of the first big IT boom. (Personally I managed to graduate in '99, but then went to grad school for long enough to miss out on the boom -- by the time I decided grad school wasn't for me, the bubble was just ready to pop. I joined a startup, which folded within six months. Then I finally went back and got a Master's degree, graduating in 2009. Things have worked out fine for me in the long run, but oof. Timing: I have it!)
Friends might be part of the problem for Gen Z. I gather it’s still popular. Do these jobbing waiters, actors, chef, palaeontologists, masseurs/singers and whatever chandler did seem poor to you? Seems they have a nice 2 pads in New York and plenty of spending money.
Not realistic I know, but Gen Z might not be checking into that.
Exactly. Search for the blog post "No Friend in 'Friends' " by Rat Faced Man. He argues precisely what you say, that 'Friends' did a lot of damage:
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Failing to do the math on life is much more subtle and widespread than dressing up like Mr. Rogers and putting on an all-day train-and-puppet show. I mentioned previously that people get all kinds of fake ideas and bogus life scripts from various places, and a key place for people who are adults now [in 2016 - C.], trying to figure out what to do next, is lame 90s sitcoms. It’s outrageous but it has to be true, because lame 90s sitcoms had immense audience penetration of a kind that today’s prestige dramas can’t begin to imagine. For every person who watched Jon Snow take it in the shorts, almost eight watched Ross Geller search for a monkey. If people act out what they see on TV, they’re going to be acting out, among other things, Friends.
The enabling conceit of Friends (among many other shows of the period) is that you can move to New York right out of college, screw around for a few years, then you marry, have kids, and somehow “learn how to adult.” I know a bunch of people who tried that out and they’re all childless or broke (or maybe finally grudgingly squeezing one out at 39 while still renting and carrying education debt with meager or negligible retirement savings.) Turns out that working 10 hours/week at a coffee shop doesn’t pay your way in one of the world’s most competitive rental markets. But that’s easy mockery. Truth is, paleontologists and sex columnists can’t afford to live in Manhattan either — they make less than NYC garbagemen.
The ugly truth is that prestige jobs are fraud lifestyle “jobs” for people whose real money comes from elsewhere, and by “elsewhere” I mean Mom and Dad (or possible Grand-papa.) Maybe it’s old money, maybe Dad just owns a Chevy dealership in Columbus, Ohio. Whatever. These are jobs for rich kids to put on their resumes as they climb the social ladder and network with other rich kids. The math makes this obvious. In real life, the Friends would have been barely solvent even if they were working as doctors and lawyers. In short, it’s a toxic life script that you have to consciously reject.
Thanks. Excellent comment.
I'm from behind the Iron Curtain and 90's American sitcoms were incredibly damaging to the local psyche, almost like that meme about *Grapes of Wrath*: "A movie about a poor American family forced to move to another state to escape droughts and dustbowls? We have to show it! Wait, what do you mean 'in their own car'?"
*Grace Under Fire* was a random-ass sitcom that was for some reason chosen for translation and syndication here. The titular character is a recently divorced mother of three, trying to juggle a factory job with raising multiple kids on a single income while trying to avoid her abusive alcoholic ex. Extremely relatable!
What does her house look like? She probably has to rent a shitty one-room apartment with her son sleeping in the kitchen to give her and the daughter some privacy, doesn't she? Or even worse, rent a room from some grandma? Nope, she can afford a house! Granted, it was a small house by American standards, but it certainly looked like luxury to us back then!
Huh. I always thought that it was widely understood even at the time that the most ridiculous thing about Friends was that these people could afford their apartments. (I think there’s even a joke about this in some sf movie or show, where the aliens ask about it?) But maybe my own real circle of friends was unusually well-informed about the American economic landscape?
You are right. I think at the time it was seen as unrealistic, maybe not as unrealistic as now. But Gen Z doesn’t know that.
Ah, interesting… Maybe time has stripped away the context, and that’s how you get “this is what they (the woke mob and immigrants, or the billionaires, depending which flavor of populism you chose) have taken from you!”
They made at least a passing effort to explain the apartments in the show. For one thing, they're on the sixth floor and there's no elevator, which makes the apartments somewhat less desirable than they normally would be.
The bigger factor is that the building is rent controlled and Monica's grandmother has been leasing the apartment for decade at what is now an absurdly low rent and is currently subletting it to Monica. Chandler and Joey are probably paying much closer to market rent, but their apartment is much smaller than Monica's. Chandler makes very good money for a 20-something; Joey usually doesn't, but Chandler seems to be willing to subsidize Joey.
That said, the apartments are still enormous by NYC standards. I can only assume that the camera crew is subletting the fourth wall from them.
I usually lean toward the CPI approach that discounts prices for hedonic improvements — I understand why it exists — but in practice most people already account for tech improvements in their own heads. What matters more in lived experience is the price of frequent and unavoidable purchases like food and housing, and those rose sharply during the recent inflationary surge. Those categories should arguably carry more weight.
I’m also not especially swayed by appeals to Calvin’s grandparents. The “vibecession” debate is really two different conversations talking past each other: one about the current malaise and economic anxiety of the past few years — felt across generations but especially among Gen Z — and another about factory work in the 1950s, which is a different world entirely.
The early 2000s were, by contrast, a strikingly optimistic period — even after 2001 and Iraq — whereas today simply isn’t. That shift in recent mood is what is important.
This hasn’t been a stable economic era for the current generation either. 2001 brought a mild downturn; 2008 delivered a severe Great Recession that some countries never fully recovered from; and the Covid shock, followed by messy post-Covid inflation, has piled on further uncertainty.
AI now looms over the labour market, with its loudest champions often celebrating the potential loss of jobs, (or actual job losses in quarterly reports) including in once-prestigious professions. It’s no wonder Gen Z feels uneasy or is turning to anti capitalism.
Has there ever been a stable economic era? We've always had recessions (or even depressions) every 10-20 years, as far as I can tell. The fact that we haven't had a full-on depression in nearly a century is a remarkable achievement.
Yes. 1945 - 1970 and 1982-2007 were stable. The 70s not so much and post 2008 has been weak and unstable.
Some caveats. There were minor recessions in 1953 and 1958, both shallow.
There was a shallow dip in 1991 and the web bust in 2001. growth in these eras was higher than post 2008
These were very much exceptions to the rule, though I suppose that if you're young enough and don't pay attention to history they might feel like they were the norm. And even then, they only broke out of the normal pattern by managing runs of (mostly) solid growth that were twice as long as usual.
Im not sure why people would have to be historians when instead they can just live through stable eras, and then unstable eras. Or be born into an unstable era after a stable one and talk ti their parents.
Perhaps stable is not the correct word here, it’s not like 3-4% growth per year can continue. However, as the song says, if we had not seen such riches we could live with being poor.
I mean the Chinese are feeling despondent as growth slows down from 10% to 5%.
But if we were to be economic historians with a real understanding of previous eras then it’s just not true that this era is stable - outside the US has been even worse since 2008. Since 2008, the UK economy has felt persistently unstable rather than cycling back into a long, confident expansion. The financial crisis and subsequent austerity period brought stagnant productivity and a prolonged fall in real wages. Then there was a the 2011–12 near-double-dip slowdown; then Brexit uncertainty from 2016 to 2019 suppressed business investment and weakened sterling.
Covid created a sharp collapse and uneven rebound that left structural scars, and from 2022 onward the country was hit by an energy-price and inflation shock, rising interest rates, falling living standards, and the market turmoil surrounding the Truss mini-budget. Now we have Labour and more austerity. Misery followed by misery.
This isn’t a vibe recession though, it’s the real thing.
I guess maybe we're just talking about different things. I'm addressing the widespread claim that now is some historically bad situation, pointing out that ups and downs are just normal.
As for whether this is a vibecesssion... all the economic indicators normally used to measure recessions say we're not in a recession, though neither is it a period of great growth. We may be heading into a recession, though. It's hard to know. Recessions are only identified with certainty a year or two after the fact; it's hard to know whether you're in one when you are, and very hard to know whether one is coming.
Feudalism was stable for a really long time!
Feudal economies were notoriously unstable. A bit of bad weather caused widespread starvation.
Starvation and stability are not mutually contradictory.
We're talking about economic stability. If one year everyone's eating and the next year a lot of them are dying of starvation, that's extreme instability.
I think the vibecession benefits greatly from Nietzsche:
1. Signals in group status as being ironic, contrarian, and The Cut reader
2. It is a symptom of ressentiment and revenge of the weak Nietzsche warned of
3. It is also a facet of his greatest warning to wit Nihilism
4. Finally, it’s a reactionary neurotic posture adopted by those who fail to tend to the existentialist duty to create one’s own meaning in a post god world
How do you know somebody has read Nietzsche? Oh, you will know.
God has been dead for a while, the weak are always with us, but what’s new recently?
How do you know when someone lacks rhetorical skill to respond with legitimate counter argument? Ad hominem. Aka you will know.
Get well soon.
It was a general attack on people who read Nietzsche, not you. Not an ad hominem unlike “Get well soon” - which I assume is part of your excellent rhetorical skills.
Quoting your favourite philosopher is all very well, and any teenager can do it, but the vibecession is a recent feeling. So what’s new? Despite your excellent rhetorical skills that question is still unanswered.
A competent philosopher should be relevant long after their death.
Very grateful for those "Highlights" posts! As least as good as the original post - and it became work to get through all comments, nowadays. As a German, I agree, we have less of a "vibecession", as we are in zero-growth territory for quite some years - econ-vibes are not great, too, but then they were rarely ever. A) Inflation - is a big factor in feeling not-so-great: Until Covid, prices at ALDI were super-stable for two decades as least. my stable food (pasta) was less than an 1€/kg, then the shelves went empty (!!!) and when pasta returned, price had doubled. Things calmed down, but we are still in +50% territory for many food-prices I remember (oats, Windbeutel, Schokolade ...). Sure, my shares rose 50%, too, and salary went up somewhat, but mood is affected on each visit at the supermarket. And eating out? I rarely do, but boy those new prices feel B) Rents in Germany: Well, there is usu. no real rent-control for new contracts. But there are strict limits on how much one can raise yearly AND very strict limitations on how to end a contract (at least if that lower old rent is paid regularly). In addition, many landlords are private people: My mom had 2 apartments to rent out; she felt very, very bad about raising the rents ever - and she votes conservative, not social-democratic ;)
C) Buying an apartment in Germany/Europe is much less uncommon than in the USofA, it seems. Why? Well, there are more apartments compared to houses ( at least the ratio is different). No giant suburbias in ol` dense Europe. And as this has been for a while, the legal rules for apartment-ownerships seem more clear and less troublesome in most of Europe, too. ( I tried once to understand US-condos but, yep, there seemed to be much unexpected differences in the details.)
The most surprising thing I've read about Germany recently is that trains apparently no longer arrive on time, which is a heavy blow to the German self-image of punctuality and reliability, and the starkest manifestation of the general economic malaise. How accurate is this narrative?
It's 100% accurate. You might even underestimate the effect, both in terms of how unreliable the German train system is now, and how much reputation this costs in (Western) Europe. Living in a neighboring country, the German railway has probably overtaken the weather as the default small talk topic that everyone can easily agree on.
Deutschebahn is a victim of chronic underinvestment to the point where every neighboring country is also aware of it failing, but at least as a person from a neighboring country it doesn’t seem to be perceived as „everything that’s wrong with Germany” but more as a cautionary tale, that endlessly postponing investment into crucial infrastructure at some point will bite you. Germany otherwise seems economically as fine as the rest of Europe (other than the Southern, maybe?) meaning vibes are OKish and the social net is still holding, but there is some unease about long term viability during moments of reflection.
Narrative is true. Even official numbers show only 60% of trains on time. Less sure how much we Germans care. Most drive cars. When I take trains (to airport), I allow for delays by going earlier. Shrug. And I buy cheap "fixed connection"-tickets: if there is delay they change into open tickets (take any trains from A to Z). Last time, I got emailed 3 weeks before, my ticket got opened 😁
In the US, limits on how much rent can go up on *existing* leases are called "rent control" too. It's crazy how in Europe, that's so much taken for granted that you only call it rent control when it applies to new leases.
Thanks! And 'new leases' mean any new contract, I assume. Interesting. Otoh, no limits on rent change equals right to kick out people anytime, by claiming a 567% raise. As a Caplan-reader I see upsides, but I see why most voters see downsides. And some limits (=protection of existing contracts) as: not crazy.
> Question for Aristides and others: why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.
At least in the US, this is partially just a definition question: An apartment you own is simply called a condominium instead. But I would make a data-less guess that the remaining difference is largely an income effect: You buy when you have more money, and since you have more money, you get the bigger thing with more space.
In response to Moose's comment:
> Every explanation for the vibecession that does not attempt to explain why there is a huge drop in 2021 specifically and persistently lower vibes for the following years should be disregarded. I think the best explanation is just inflation: this is what is most different in 2021-2024 compared to previous time periods, but you can also blame the shift to remote work, or higher housing prices. Examples of bad explanations would be “phones bad”, “media bad”, or “inequality bad” without explaining why they became worse in 2021.
I wouldn't be so quick to dismiss these sorts of explanations just because there was a sharp change in 2021. For example, with everyone locked up during COVID, there could have been a jump in the impact of social media. In fact, based on the evidence you (and I, and others) presented showing a massive (and arguably growing) gap between economic reality and perception indicates to me that it is indeed very likely that something related to that perception--like the media--is to blame.
> I would like to see someone seriously investigate an average 1955 couple’s budget vs. an average modern couple’s budget, discuss how far each one would go, and do a more careful analysis of who was getting the better deal, and by how much.
Again, lacking data here, but I think that the "you can afford a tradlife" idea is right-ish. It's not literally right, but that's largely because we've made it illegal, or at least very socially undesirable. Smaller houses, very difficult to build. Electricity Let your kids play on their own so you have time for other things, forget about it. 1950s quality health care, any doctor who tried would be stripped of their medical license. You see tweets like "in the 60s my grandfather could support a house with 3 kids and a stay at home wife on a blue-collar salary" which is *true* but missing a ton of important context. They have that information but not any of the relevant details.
A comment on inflation: I agree that people confuse "inflation" with "price level" and get wildly angry when the price of anything goes up, even if their wages went up even more, and think that prices are going to go back down. This fact may be exacerbated by inflation being abnormally low from about 2009 until COVID: https://fred.stlouisfed.org/series/CORESTICKM159SFRBATL
I think people got used to a regime with minimal price increases for most consumer goods (food, gas, etc.) and now even an inflation rate of 2%, which is what the fed targets, feels brutal.
> For example, with everyone locked up during COVID, there could have been a jump in the impact of social media
This is an attempt at explaining the sharp change that happened around 2021, and its a LOT better of an explanation for the observed data than a simple "social media bad" argument. I still think it's mostly inflation, but I'm open to putting some of the blame on the pandemic.
There is a lot being made of “taking people at their word”, but what circumstances do young working people have to compare against in order to make their judgment that they are economically badly off? Not their parents today, not their peers…
I’m a late-thirties working professional who can observe in themself an unconsidered background belief that things are economically harder now than they were 20 years ago. But when I look at that belief critically I find that I basically have no sense at all of how things were economically for people back then, when I was a kid or adolescent. I feel the vibecession. But we should absolutely *not* be taking young working people at their word, because we don’t have a good justification for the economic beliefs we have.
In my view, the answer must be found in a false narrative, or myth, of how *good* things used to be economically in the 90s and 2000s, and therefore of how much better they were than now—a narrative which would have arisen though I’m not sure where that is coming from. Perhaps the unattainability of home ownership is indirectly the explanation. Not “people feel poor because they can’t afford a house”, but “people feel like their parents were better off than they actually were, because their parents could afford one.”
I entirely agree with you that trying to compare your lifestyle with anything but the recent past is an exercise in myth-making. Not to say that it's entirely futile, or that I'm 100% certain that the pessimists are always wrong. Just that it's so difficult to make an objective comparison that it isn't possible more than a tiny fraction of the people talking comparatively actually have a leg to stand on.
Everything changes over long periods of time, leaving no stable reference point for intergenerational comparisons. You can compare individual things (e.g. I bet it's much easier to get out-of-season fruit now than it was in 1950, phones are obviously way better, nannies and haircuts are probably much more expensive due to Baumol's cost disease, etc.). But clearly, today's world is better in countless ways than 1950, and maybe worse in countless other ways. Assigning an overall score seems very subjective.
I highly suspect that you're tripping across the same issue that Robert Putnam found by searching through social statistics. Basically, there's a been a decline in social capital in the US since the 60's. His book The Upswing, for all it's faults (not the least because he was unable to answer the why) did a good job of showing how social connectedness rose till the 60's and then declined.
Agreed, and it ties in with the Boomer complaints because they consumed a lot of that social capital, or at the very least presided over the decline.
Both this post and the original are sorely missing the tangible vs intangible values graph, see #10 here:
https://www.derekthompson.org/p/the-26-most-important-ideas-for-2026
From 2019 to 2023, peoples' stated importance of "patriotism", "religion", "having children", and "community involvement" tanked, while the importance of money is on a steady increase. The more you care about money, the more your vibes will "sublimate" economic concerns, be they housing, prices, etc.
Would be interested to hear from someone in China about whether they have an even worse rising tide of rising expectations.
I'm fully convinced nearly all of the bad vibes are due to completely unrealistic memories (cultural or personal) of the past, combined with (social) media selling opulence as normal/expected, combined with the much-discussed loss of community (which is complex, to be sure), rather than actual economic conditions.
In the late 90's/early 00's, when I was growing up, my parents made somewhere in the realm of $100k in 2025 dollars. It felt like a typical middle-class lifestyle. We had a 1600 sq foot house in a somewhat low cost of living rural CA small town.
We went out to eat maybe once a month, at most. A typical dinner was something like baked chicken breast with half a baked potato and microwaved frozen peas, or ground beef and bagged seasoning tacos, or pork chops and applesauce.
We went on one trip a year, usually, and it was a road trip where we brought food stored in ice chests, rarely ate out and roomed at budget, but not bottom of the barrel hotels. I flew on an airplane once before going to college, for a trip we saved up for for nearly 10 years.
My mom was cognizant of which gas stations in towns we frequented were cheapest. She knew what days the store tended to discount meat. She cut coupons. Neither of my parents drank or had expensive hobbies. We tried and, to my knowledge, mostly succeeded at not holding credit card debt. We usually only had one car. They were always used, usually purchased from relatives or people we knew from church. I had toys, but not a ton of them. The significant kid purchases--a bike not from wal-mart and my first video game console--I made myself by saving up my allowance and odd jobs I did for my grandfather.
My parents invested more in my and my sister's hobbies and sports than fancy material goods--photography and softball for her, golf (always used clubs and the cheap local course) and forensics for me.
It seemed like a solid, comfortable lifestyle. My parents were sometimes worried about money but in ways that seemed normal. I never thought we wouldn't have food or shelter or security.
My own household, now, has only recently eclipsed $100k. We live in the suburbs of a high cost of living city. I don't feel a bit more wealthy than when I did growing up. I feel 2-3x more wealthy. I eat out way more than I did growing up. Like once a week. The meals I had growing up now seem quite modest. I travel way more. I don't worry about coupons. I know which stores are cheaper and invest the time to try to find good deals on things, but at this point that feels more like habit than necessity (my parents instilled in me a very robust sense of frugality).
I'm amazed by what culinary wonders I have access to now. I'm pretty sure sushi didn't exist in my hometown when I was growing up; I first learned what Pho was well into adulthood.
I feel, and am, incredibly wealthy, and I felt this way when we were making $60k and living in a studio apartment. Even then I felt richer than I was when growing up (though I didn't have kids at the time, to be fair).
This sounds a bit off, to be honest. Perhaps the rural small town had fewer restaurants?
Yep. Unrealistic memories, and the social networks where you watch people's photos from their perfect vacations, and listen to bots telling you how everything is horrible. The actual problem is that now we got better entertainment on screens, so people meet less often.
“The Chinese story has an obvious moral: people care about growth rate more than level. But even this doesn’t work for America - our Vibecession doesn’t correspond to a period of unusually low growth.”
Scott, you can’t have it both ways.
If you’re gonna claim that the vibecession dates back 15-20 years, rather than just 4, then it absolutely IS the case that growth rates now are less than what they were from 1982-2000.
George Will made this point well ages ago: “If long-term U.S. growth were about 3.5 percent, it would restore cheerfulness — whereas if growth stays closer to 2 percent, we’ll have ‘continuing social disappointment and political crankiness.’”
I think you're technically right, but I think the difference is not that huge. Hard to say what the minimum meaningful difference in GDP growth is, but according to Mr. Will it's apparently 150 basis points. My quick math from FRED data says that average real GDP growth was 3.02% from 1982 to 2000, and 2.35% from 2001-2024. Granted, it's only 2.11% if you look at 2009 to 2024, but that's still a difference of 91 basis points vs. Mr. Will's 150.
I’d seen it written elsewhere as 1% annual, I.e. 100 basis points, as being the large difference.
And remember that 3% annual growth is in fact 50% faster growth than 2% annual growth.
While I cannot claim that it is literally a linear “50% better” relationship, I do think that the growth rate on a multiyear basis really is the single best explanatory value to vibes.
It's interesting how much of a challenge investigating the vibescession has ended up being. I've seen many smart people have their audiences turn against them because they found themselves reluctantly agreeing with the economists rather than the public after doing their own research. The fact that not even you could find the cause means it's tricky indeed.
During your original post, I had a lot of ideas for angles to investigate, but by the time I was in a position to type something down, the comments section was so flooded that I knew nobody would ever see my work.
So I'm only going to leave one idea this time, rather than add so much spam that I risk creating a gish gallop. It can also be considered a response to your boomer's article.
A common experience among us "low-vibes" young people, are constant reminders from our parents about how much of a disappointment we are to them. They frequently ask us why we aren't hitting our milestones: finding a wife (or even a girlfriend), getting our own place, having kids, building a career. The implication has always been that at our age, our parents were able to do those things. So why can't we?
You press them for an anecdote, and they'll tell you about how they were able to get a job by walking into a building and hand delivering resumes, or maybe they'll talk about how they were able to pay their way through college without taking on any debt. For some reason, they never talk about the actual struggles they went through, almost as if they had forgotten them. Is it no wonder why young people have such a rosy picture of the past, when all their information about it is filtered through nostalgic parents?
And yet we are forced to live up to that false ideal. You say the stats show that age of first home purchase hasn't changed that much between boomers and the current generation, yet our parents disagree! We have these unrealistic expectations foisted on us, and then we are called lazy, or stupid, or wasteful, when we don't meet them.
People aren't developing unrealistic expectations because of their phones! My argument is that the source of them is much closer to home.
I don't know how much this one idea is able to explain the entire "Great vibepression", but I can easily imagine a scenario where the youth are "low-vibes" because their parents call them disappointments while older people are "low-vibes" because they are disappointed in their children. Both separate effects end up adding together to create the appearance of a single unified "Vibepression"
I wonder how you would design a survey to test this question, because I somehow doubt most parents would be willing to write down that they're disappointed in their children. That kind of attitude only tends to come out when they're put under stress, not in a sterile survey environment.
That's an interesting idea. It does seem to beg the question of why this generation is uniquely disappointing to their parents, compared with the preceding ones. Why didn't the unrealistic expectations of the Greatest get the Boomers and Gen Xers down?
Greatest were coming back from WWII. Their idea of a disappointment, calibrated to peer experiences, is somebody who ends up blown full of holes by a Nazi machine gun, or driven insane by pacific jungle horrors, or who was just too unfit to effectively participate in the first place. That was a much easier bar for Boomer kids to clear.
As a Gen Xer: they did.
Speaking as a parent; I'd be happy if my kids would just move out before age 30.
This is interesting. I see it from a slightly different angle: our younger generation is defensive about not meeting the expectations of our parents' generation, but I don't think the older generation needs to paint their early adulthood as easy for this to happen, nor do I think they generally do so. The stereotype is that older people emphasize how much harder they had it ("Back in my day, we had to walk 15 miles to school, with no shoes!" Okay, that example is a humorous exaggeration, but they do tend to emphasize that things were harder). Our generation has a vested interest in proving our parents had it easier.
You see the defensiveness a lot on social media. Reddit posts and TikToks that appear to show we have it harder than our parents get upvoted and spread because it protects our ego and lets us justify ourselves to our parents. Defensive posts in general seem popular on social media within their target demographic. E.g. teachers and nurses often post memes or jokes about how they work really hard and are underappreciated.
None of this explains why 2022 specifically had bad vibes, but it could partly explain longer term bad vibes. Social media may also amplify this type of thing.
There's a problem when the story is that the parents got a job and a house and a wife despite having a harder life, and they keep complaining that their children still don't have those things even with their easier life.
Their children should be ahead because their lives are so much easier, but their parents keep telling them they're behind; which implies that either they're less capable than their parents or that someone is lying about something.
Finally someone gets it. The reason why I believe that it’s more than just vibes, despite so many smart people saying the opposite is because the “Economy is just fine!” take fails a lot of sanity checks.
Am I supposed to believe that decades of rising inequality, of corporate lobbying, of congressional deadlock, of a polarized 2-party system, of real estate financialization, of suffocating zoning laws, of NIMBY activism, of declining anti-trust enforcement, of unopposed monopolies running amok, of product enshitification, INSERT-PET-ISSUE-HERE.
Am I supposed to believe that after decades of all of that, there wouldn’t be any negative effects on the material well-being of the average person, which is what the economy is supposed to keep track of?
I’m seeing a lot of causes. Am I really supposed to believe there haven’t been any effects?
the effects of all those things have been swamped by the rising tide of improving technology
Yes. That's how we perceive it and why we're defensive.
The older generation isn't necessarily lying. I haven't heard them claim housing is more affordable today. They talk about other things that were harder in their time, all of which may be true.
I think if our parents were telling us it's fine if we're a bit behind because things were easier in their time, our social media posts about then vs now wouldn't have the same defensive tone. We keep making posts about how much easier they had it.
"between 2008 and 2023, and I don’t think this was an especially bad time for community and purpose compared to any other time since the 60s"
[Jonathan Haidt has entered the chat]
You state the 3rd quarter GDP as though it were known. But the people in charge of knowing and reporting it were replaced because their boss didn't like the numbers they were reporting. Perhaps the new crew will be reporting as accurately, or even more accurately, than the old crew. But that's not the way I'd bet.
>Also, hasn’t the Baumol effect been basically constant since at least the Industrial Revolution? And isn’t the Vibecession only 5 - 20 years old?
It is, indeed, at least as old as that.
https://samzdat.com/2017/06/01/the-meridian-of-her-greatness/
Writing from the Netherlands, we have a bit of a mixed bag. Most people are unaware we are in a recession and seem not to care much. On the other hand a lot of recent graduates believe “I will never own a house, and this is the worst thing ever”. The latter seems not true, some friends who voiced these complaints a couple of years ago are now home-owners. House prices are up 50% on average since 2021 though, so they have a point that it’s getting harder.
I believe we tend to underestimate the quality shift when it comes to housing.
I live in a house built in 2022. Compared to the houses from 1960s or 1970s, which I visit, it is a different sort of beast. Extremely hi-tech and energy savvy. An old Czech house will feel drafty and cold-ish in the middle of winter. The one I live in - well, I can walk the entire house barefoot comfortably even now with outside temperatures below zero, while spending half as much money on energy costs as someone who lives in an old house, or even less.
This is a major difference, but of course such a new house with newer technologies costs something to build.
I wanted to chime in, as an American who has lived in Europe for the last 8 years. I moved to Germany in 2017 (aged 21), and to The Netherlands in the middle of 2020, where I plan to remain.
While there are definitely economic concerns that are particular to the younger generation, it really doesn't seem like the same vibe-cession that is in the US. Housing is the biggest topic and complaint, and rightly so - students are being admitted to universities, then turned away because there is no place for them to live. In 2017, I rented a room in a shared apartment in a nice location in Berlin for €300 - it would cost at least double that now, despite having just as many roommates. That said, this is often conflated not with economic issues, but with immigration issues. People blame not only refugees or the usually complained about migrants, but also so-called Highly Skilled Migrants taking tech jobs from non-EU countries (I fall into this category, though people tend to have less issues with me and more with the many people from BRIC countries).
I'd be willing to bet that a lot of the positive sentiment among young people here does come from the fact that so many are foreign and have better jobs here than they would in their home countries. Not only the non-EU immigrants, but also people from southern or eastern EU countries. I definitely see what the Italian commenter meant - I have several Italian colleagues who love their home country but never would return because they have no opportunities there. (Not to pick on Italians - I know Portuguese, Poles, Greeks, and Romanians who would say the same thing). Personally I support the EU (and its eventual growth into a "United States of Europe"), so I think this is more of a growing pains issue, but I'm getting off-topic now.
I wonder if there is something to be said about young Europeans in cities not having or not needing to have a car - I don't have one, and probably 75% of my friends don't either. (I acknowledge this is coming from living in cities - rural Germans and Dutch people definitely would make more use of a car.) Of course you still need to pay for a bike or public transportation, but it does cut out a significant cost, or rather change the category of the cost from a necessity to a luxury. I think this categorization of necessities and luxuries is a huge part of the rise of the vibe-cession.
[Edit: I looked it up to make sure I wasn't overly reliant on my own anecdotal experience. According to the Dutch Central Bureau of Statistics, car ownership rates grow gradually with age - from 3% of 18 year olds to 49% of 29 year olds, the German Statistical Bureau shows 25-45% in that age range.]
The "Doomerism" that seems to be just as much if not more prevalent here than in the US is about the environment. The biggest political movement around young people/university cities is the Greens, and there's plenty of hand-wringing around how it's too late and the Earth is ruined. I know this opinion exists in the US as well, but it feels more mainstream/accepted among my European peers than among the Americans (but that could just be a personal bias).
Scott says:
"The strongest argument against this position is that the vibecession started sometime between 2008 and 2023, and I don’t think this was an especially bad time for community and purpose compared to any other time since the 60s."
The argument that it was an especially bad time for community and purpose is falling fertility rates. Which could be both a cause and an effect of less community and purpose.
The median rent in Alabama is somewhere in the neighborhood of $1800 and Alabama was a cheap state to live in. Something bad is happening with housing for sure
I don't know. It's easy to confuse nominal and real. US Census data says that the rent part of the CPI-U has gone up 40% since 1981 relative to the rest of the CPI-U. But real median personal income is up 70% over the same period (corrected with the CPI-RS, but the difference isn't big enough to matter here). If you just look at the period 2009 to present, it looks like rents have risen about 15% in real terms and personal incomes about 22%.
This doesn’t make intuitive sense because in the 50s and sixties a house cost 2x usually single earner household income and today it’s 6x dual earner household income. A lot of games are played with hedonic adjustments and nominal GDP
Well, the rental market (which is mostly for apartments) and the ownership market (which is mostly for freestanding homes) are quite different. Renting just hasn't seen the same cost increase over the last 15 years that ownership has.
That’s true. The rational decision is to rent in most places. I think most people would prefer to own but just can’t afford it. Rent is also outrageous in many parts of the country, pace my initial example of Alabama. $1800 is not cheap. You could rent or buy in the ghetto but then you have to suffer ghetto life
Renting in Alabama is probably particularly miserable because of the military-industrial complex. Did you compare mortgage prices to rent prices? The average monthly mortgage payment is close to half of what that same house costs to rent, if it's up for rent/buy. I suspect this is because of the number of military and government contractors competing to RENT but not BUY the housing in the desirable locations, knowing they will probably move in about 2 years.
The point was that Alabama used to be considered cheap but isn’t anymore. As far as the military, sure they could potentially drive up rents locally but I doubt it would do much statewide, and they get pretty generous housing allowances. Metropolitan Washington DC is another story, so many government employees and contractors there do drive up rents and prices, in fact it’s one of the most expensive and richest areas of the country
I saw an interesting recent YouTube video "Why The Rich Are Going BROKE (At Record Rates)" :
https://www.youtube.com/watch?v=3mlpcdXgshw
So if this vibecession is a real phenomenon, could it be that relative poverty, or the perception of it, somehow trickles down just as wealth is said to?
Summarizing my understanding after reading the excellent contributions:
If vibecession is measured from the first use of the term, inflation is an adequate explanation.
If evaluated from qualitative cultural malaise, many possibilities emerge: social media, increasing costs for big items, tepid growth, misplaced nostalgia. I’m dubious of this approach given how anecdotal it is.
That said, income inequality might deserve attention. Not as a direct cause, but as a necessary condition. The steepest increases happened during relatively optimistic periods (late 70s through 2007), then plateaued. Awkward timing.
To me, this points back to social media. What changed around this time? The scope of comparison exploded. Social media made the inequality legible. Visibility of the existing inequality increased just as the populist wave began.
PS, the Friends theme may have lyrics that point to tough economic conditions, but also a community that supports each other (real vs Facebook friends), and an upbeat rhythm / vocal inflection. If anthropologists find a discussion pointing to that song as evidence of cultural depression they will feel like they are studying a different species.
My biggest takeaway from this is that American butchers earn more than British MPs or senior officials.
Victor Thorne, its just silly to believe that you need 200k to buy fancy groceries. I agree that this is a big part of QoL... so I just go and do it. I did this when my income was around 65k. I even did it while unemployed! more limited and judicious of course.
The key to feeling rich is to spend as you feel like in the moment while your bank account is still shooting up.
You seem to think you have a money constraint, but its clearly a skill constraint. you need to learn which categories of things its good to splurge on, and which are marketing traps. you need to learn to dial in a target spending level without explicit budgeting. that last skill especially takes a lot of pressure off. And then there's temperance: enjoy things when you have them and don't think about them when you don't. Most goods have sharply diminishing returns anyways.
I had the same reaction (and wouldn't have made my own post had I seen this one first): my eyes shot wide open when I saw 200k. I wonder how much of it is just from people who have a bad understanding of money?
Yeah. We make <100k for a family of 5, and can still go get Friday oysters at Whole Foods and fancy cakes for birthdays or whatever. It's not like Costco even sells actually bad food nowadays anyway.
>But actually, capitalism shrugged off the Great Recession just fine, and continued exactly as before. That must have been a bitter pill to a lot of budding socialists. I wonder if something about the situation broke people’s brains.
I get it, 2008 might as well be a different era of human history at this point, as far removed as the Middle Ages, and one might be forgiven for not remembering all the details. But do you not at least remember iconic images like these: https://www.reddit.com/r/pics/comments/l77fdv/
Maybe you'd be, given the chance, among those up there sipping champagne, while the people down here lose their jobs despite having no personal investment in the matter at all. But let me at least remind you that socialism very much saved the day in 2008. Socialism for the rich, that is, with gigantic taxpayer bailouts https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008 while everyone else gets to continue spinning the wheel under turbo capitalism. Yes, it was mostly business as usual if viewed from sufficiently far away, you got that right, but under normal market mechanisms, it absolutely would not have been.
The biggest bailout was actually for small banks, whose investments in commercial real-estate crashed (see Scott Sumner on this). Ben Bernanke's focus on the credit channel rather than monetary one was a mistake, as paying interest on excess reserves caused monetary contraction that kept us from growing the economy back for years.
Disappointed by the discrepancy between how heavily your whole thesis relies on inflation-adjusted metrics, and how willing you are to handwave away questions of inflation as some separate question best left to economists.
Very interested in the concept of inflation in terms of strictly essentials, e.g. *basic* apartment, *basic* car, *basic* food. How has bottom-dollar rent in particular been affected by private equity acquisitions? How have bottom-dollar car prices been affected by cash for clunkers and subsequent emissions regulations that effectively make the most affordable cars illegal? How bad is inflation for people shopping at the dollar store? How badly has the transition from thrift stores to eBay affected the price of secondhand essentials?
On top of that, who is it that's mostly stuck in this bottom-dollar purgatory that may not correlate with larger economic trends. Could it be the "Lost Generation" everyone's been talking about? That would sure be a double whammy.
I agree that the difficulty of measuring inflation is important, but that seems unrelated to the other points you raise.
We can, in fact, measure changes in the prices of cars, dollar store offerings, apartments, secondhand clothing, etc. That's not the hard part. If your question is "how has the price of the 10th percentile rental unit changed in the last 20 years?", we can answer that with reasonable confidence. I don't happen to know the answer for the 10th percentile, but I can tell you that the 50th percentile rental unit is more expensive in real terms than 20 years ago, but real 50th percentile incomes have risen faster than real 50th percentile rents, so it's hard to use this data to argue that apartments are less affordable.
Instead the hard part is the changing composition of those categories. What a "car" is changes a lot over time, and what the dollar store sells does, too. This is the part Scott is leaving to economists.
Obviously we could, but it seems like nobody credible is doing it (or at least nobody on Scott's radar). Are there any mainstream economists addressing a basket of goods that's effectively just, like the Citizen Penrose comment says, a roof over your head, a running car, and 2000 calories of basic food?
I'm arguing that "what a car is" effectively doesn't change over time, at least not for poor people, and that's who the vibecession is fundamentally about. For all the tech improvements, a car is still just a way to get to work, and it's effectively a mandatory purchase for most Americans. If you're saying they're worth more because of all the technology in them, to me that seems at best neutral utility, and at worst negative - a way to require poor people to buy computers they don't need and can't afford to repair when (not if) they break.
Similar to a "million dollar iphone" being affordable but you can't pay rent. The core utility of the truly essential basket of goods essentially hasn't changed in 50+ years, but I bet the price has exploded. CPI seems almost designed to obscure that fact.
I don't think you can cleanly separate which improvements to cars increase utility and became standard due to consumer demand and increased wealth in the low-end market from improvements that offer no utility to low income drivers.
To give some examples of improvements that became common or standard since the 1950s:
Airbags, 3 point seatbelts, ABS brakes, traction control, air conditioning, child seat anchors, tire pressure monitoring, more effective brakes, better tires, power windows, adjustable steering wheel, automatic transmission, catalytic converters, blind spot alerts, intermittent wipers, etc.
Even poor people generally want these features. Not every feature will be worth the added cost to every buyer, but I would guess that most of the features that became standard in low-end cars are popular even among low-income buyers. And there is clearly some utility in a feature that might save your life.
I'm not sure which date range you're most concerned with, but cars have been continually adding more technology. I think this applies with any starting date, although obviously there will be larger differences the further back you look.
As far as personal utility to me, I can easily separate them, that's why I still drive a 30 year old car. To put it simply, anything added after about the year 2000 has extremely marginal utility imo. Broader market utility is impossible to parse because we no longer have a counterfactual world in which people can choose to forgo most of those features. I think everyone would agree, it's nice to have emissions control, but if it stops working and effectively bricks your engine, totalling the car or making it un-registerable, it's better to have a car without it.
Still, I trust the used car market value more than any value-added calculations carried out by government or automotive industry interest groups, and the market value of most of those features on a bottom-dollar car is near zero, because oftentimes you can't reasonably expect them to work for the full life of the car.
Speaking as a former mechanic, there's also a handful of features that mechanics would unanimously agree exist primarily to line corporate pockets. They might not complain about it openly, because it's job security for them, but you can see it clearly in which cars they choose to buy for themselves.
> anything added after about the year 2000 has extremely marginal utility
I completely agree with you (20yo car here, I'm happy with parking sensors and AUX, despite being generally into new tech), but from my time browsing car forums, we are not the average buyer. I've seen many people actually refuse to buy a car because it didn't have one of either heated seats, Apple CarPlay, or adaptive cruise control. "Poverty spec" is the phrase used here in the UK to describe an otherwise powerful, comfortable and efficient vehicle that is lacking a few of the latest gadgets.
Yes, lots of people are measuring these things, and write about them. The BLS's Supplemental Poverty Measure and MIT's Living Wage Calculator come to mind (although I don't think the latter is very rigorous, it is widely cited).
I don't agree that the vibecession is fundamentally about poor people, unless by poor you mean the majority of people. It seems like the nexus is college-educated, employed young people who make near, or sometimes more than, the median personal income. It doesn't make sense to call that group poor.
Cars, phones, products in the dollar store etc. aren't just slightly better quality or more fun to use. Cars are more fuel efficient, safer, last longer, and require less maintenance. If, nevertheless, you reject the hedonic improvements to cars and other consumer goods as irrelevant to the bottom line, then I struggle to see how a car can even be considered an essential for most people. If all you need is a way to get to work, and you don't care about comfort or convenience, then owning a car is extravagant. Just take the bus!
No, I would argue that it all does matter, very much. Vibecessioneers aren't complaining that they literally cannot afford to get to work. Almost everyone can afford to get to work. They are complaining that they cannot afford a lifestyle that is as comfortable (i.e. considering all the hedonic aspects of their purchases) as it should be.
There are two stories here: one where the vibecession is an unreasonable response to an imagined problem, cooked up by coddled young adults. The other is that there's a real, more specific problem that the data presented here fails to convey. Essentially that the bottom rungs of the ladder have been systematically removed - in terms of jobs, housing, and transportation to name a few.
I used to make good money, and I thought the economy was just fine. Then I spent some time homeless and working below the poverty line, and it opened my eyes to very real problems affecting the lower income distribution that straight up didn't exist the last time I was similarly poor.
> Just take the bus!
What bus?
Last turn I ran the numbers, the median American lives in an urban area of about 450,000 people. I'm pretty confident America doesn't have any of those which lack a bus system. Sure, some people live way out in the suburbs where the bus doesn't reach, but if you're budget constrained, that's the wrong place to live anyway.
The median American lives in the suburbs. By self-report in 2018, 25% of adults live in urban areas, 43% suburban, and 30% rural.
https://www.pewresearch.org/decoded/2019/11/22/evaluating-what-makes-a-us-community-urban-suburban-or-rural/
The Census Bureau says 80% of the population lives in urban areas, but that's in a coding scheme with no "suburban" category and everything that isn't rural is considered urban. It also seems to classify some things as urban that the residents consider rural; I am guessing this is a combination of small exurbs in otherwise-rural areas, census tracts that span a mix of suburban and rural areas, and vibes-based self-report of areas that are objectively suburban as being rural.
I suspect what you saw was the population of metropolitan areas, but that definitely includes close suburbs. For example, someone living in Kirkland, Washington would be classified as part of the Seattle Metropolitan Area which has a population of 4 million. Seattle proper has a population of 780k within city limits, and Kirkland has a population of 92k. Seattle feels urban to me while Kirkland feels suburban.
Seattle has a pretty good transit system in my experience. Kirkland and the other Eastside suburbs (Redmond, Renton, Issaquah, etc) have bus lines that can be moderately useful for going to the airport or to downtown Seattle from a central hub like one of the suburban transit centers or from the Microsoft campus, but they were absolutely crap for getting around within the suburbs as of when I left the area in 2008.
I live in a city of a million people, and we obviously have a bus system, but I couldn't use it to get to work. I would have to leave the night before to be at the stop for the connector bus the next morning. And I'm not even in the suburbs, just on the other side of the city.
"Don't landlords raise rent on existing tenants each year to match market prices?"
No. Not really.
While AmalgamatedPropertyManagementCo that is funded by wealthy people being sold LPs by RIAs is a absolutely a thing, many (most?) landlords are smaller scale people who own lets say 4-50 rental units themselves, with or without a *local* professional manager. In that situation you are *one* bad tenant away from serious trouble. They can freeload without paying rent, can be very difficult to evict depending on jurisdiction, and depending on your margins could wipe out the profits of your other units. And/or can cause significant property damage wiping out years and years of careful capital accumulation, phrasing I'm borrowing from (I think) your post on Piketty.
Every time you take on a new tenant you are rolling the dice. So while some landlords are into profit maximization each year, a lot of them are also thinking VERY hard about *risk mitigation*. Existing tenants are more of a known quantity and your rent for new tenants is going to price in the risk.
But wait, why would a rent increase require a new tenant? Because tenants HATE rent increases. No matter how obviously necessary it feels like a jerk move so especially during an inflationary period like the one we've just been through raising each year to market price is going to make people say "hey wait a minute, haven't I been a good tenant for you, took care of the property, paid on time, etc why are you doing this to *me*?" and some percentage of them will leave.
And I suspect that landlords aren't legally allowed to discriminate who they rent to, so that goes into the risk premium they charge to new renters. It's the same as the American situation with HOAs and restrictive zoning that doesn't allow building cheap housing: if price is the only thing you're legally allowed to discriminate on, that's where all the demand for discrimination will pile into, raising it higher and higher. Stupid HOA regulations about lawns and decor and such are non-monetary means of helping keep out badly behaved people, but they only go so far and aren't easily verifiable. Money paid is.
Yes, this. Moving may suck but switching costs are much higher for landlords. New tenants have much higher uncertainty than new apartments do.
"I would like to see someone seriously investigate an average 1955 couple’s budget vs. an average modern couple’s budget."
The Matt Yglesias post and the commenter mentioning their grandparents lifestyle also compared the 50s to the present, which feels like a bit of a mott and bailey. I don't think anyone would claim there hasn't been improvement since the 50s. The period from 1945 to the late 70s had undeniably strong growth in living standards.
It's the period after around 1980 where it's unclear if there has only been weaker growth or stagnation or decline, depending on which inflation figures you use. If I think we've had 45 years of poor, or even negative, economic performance saying things "but here was good economic performance before that" doesn't assuage very much.
I'd be much more interested in a breakdown of the median 1980 household budget to find out which of those three possibilities actually happened.
I entered college in the 80s and embraced - just have to trust me - a little Neo 60s hippie atmosphere that was current on our campus and others. And I don’t scorn that now. In fact, I consider it a perfectly natural part of the 80s.
Overall, I think there is a similar attitude to the 80s that there is to the 50s. That it was somehow all fake or fraudulent. In truth, the 80s weren’t a bad time to be alive.
In particular school was a much different experience, at least for the teachers.
I think they go back to the 50s because that's when families were nearly all single-earner, that is, it's a period chosen to counter the "Everything is so expensive you need two incomes" argument by pointing out that you could have a 50s lifestyle on a single paycheck today.
But if you're just talking about rising expectations, you don't need to go back that far. Even in the 80s and 90s, houses were a lot smaller, more kids shared rooms, more families made do with one car, people ate out a lot less, food and clothing was a bigger part of the family budget, etc. etc.
Yeah. I grew up in the 80s and 90s in a not well off family with 6 kids. Nobody had their own room except my oldest brother, who was like 16 when that started. We basically never ate out, even on trips to see my grandparents. We drove straight through or stayed with relatives on the way, never in hotels. Mom made most of our bread and cooked most things from scratch.
Other than a house, I live better than my parents did. And I've owned a house, but then moved to Oregon where house prices are absolute nuts. I make low 6 figures, as a single guy with no debt. I could probably buy a house, but it would be tight to get one I'd like, and no way could I get closer than my current 35 minute commute, because I work in a college town where the city thinks it's Portland and prevents most building unless you're a college student slumlord.
One factor that needs to be considered is civic society/social trust. The 50s had much higher levels of social trust and much stronger civic society, which lets you reduce your outgoings by potentially quite a bit -- e.g., if you can turf out your children from morning till evening and be confident that the neighbours will keep an eye on them, you don't need to pay for daycare, and/or you can have a smaller house without it feeling unbearably crowded. So while you might be able to afford the physical things a 1950s family had on a single income, you won't be able to live a 1950s lifestyle, because the society of 1950 no longer exists.
Re: the Friends theme song, here are the opening lyrics for the Cheers (1982-1993) theme song. It continues in subsequent verses with similar complaints. I think this is just sitcom vibes.
Making your way in the world today
Takes everything you've got;
Taking a break from all your worries
Sure would help a lot.
Wouldn't you like to get away?
All those nights when you've got no lights,
The check is in the mail;
And your little angel
Hung the cat up by its tail;
And your third fiance didn't show
Only the first few lines of that actually made it into the show's intro, I think. I don't remember hearing the second half, at least. I just checked a couple videos of the opening credits, one from the first season and another from one of the later seasons with Kirstie Alley. In both cases the lyrics go straight from "Wouldn't you like to get away?" to the chorus about everyone knowing your name.
The specific complaints definitely got written into the song that got used, yes, but they don't seem to have gotten highlighted in the show's intro anywhere near as strongly as they did in Friends. Still, that you for posting that: I hadn't realized how downbeat the lyrics they skipped were.
"All those nights..." is the second verse, and I've definitely seen a video that includes it (from the original artist), but you're right that it's not in the show.
I hadn't seen this polling when this originally posted, but per Gallup ~60% of 30-49 year olds believe they will receive no social security: https://news.gallup.com/poll/546890/americans-upbeat-future-social-security-benefits.aspx
If you take that seriously it's a plausible reason for bad vibes in a decent economy: it would be a drastic cut in projected lifetime earnings that feels very external/difficult to fix.
> I hadn't seen this polling when this originally posted, but per Gallup ~60% of 30-49 year olds believe they will receive no social security:
And that's CRAZY optimism from the ~40% who think they'll still exist, and the 53% that thinks there will be no cut in benefits.
Our system is so profoundly "shoot yourself in the head" stupid that you only reach net neutral in terms of taxes paid vs consumed at ~$250k of income, a top ~5% income.
Let's see the math:
Net federal expenses: $6.9T - with more than 50% entitlements, and 22% interest on national debt
People in US: 340M
6.9T / 340M = $20,294 spending per person
But ~70M are children and ~100M aren’t working (retirees, students, layabouts), so there’s only ~170M working adults.
6.9T / 170M = $40,588 tax revenues needed per working adult
Okay, now the question is, what percentile of income do you need to be to hit this $40k taxes paid figure? We already went over that, it's top 5% or better. And that's net NEUTRAL, not actually paying anything positive in, you obviously need to go higher than that to reach net positive.
Literally 95% of people consume more taxes than they pay, and it's mostly entitlements.
And just OBVIOUSLY there's no way that can continue. There is not a snowball's chance social security will still exist for anyone <45 years old.
AND there's no chance there are no cuts to social security! Where are you going to move that 5%? To 1%? Make literally 99% of people net tax consumers? Make us pay ~50% in entitlements and ~50% in debt service, instead of the 52 / 22% now? Hilarious.
I agree it's silly to think there won't be any cuts, but it seems reasonable to think there will be sufficient cuts to stabilize the system and leave you with a nonzero benefit. I mean, there's no theoretical or accounting reason that couldn't happen, only political ones.
> I’d like to know more about what factors hold rents down for long-time residents. Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
I'm not sure how this is for other countries in Europe, but in my country (France), the raise of rents is highly controlled when the tenant is staying in the accommodation. It can only be risen up to a given percentage (0.87% for the 3rd quarter of 2025) once per year. Whereas the rent can be risen more freely during a tenant change, unless the accommodation is located in an area with rent control regulations in place.
But many owners actually don't choose to raise the rent at all. I have lived for several years in the same accommodation in two occasions in two different EU countries, and my rent has never risen, even during peak inflation (~15% annually). I guess this is because owners don't want to risk losing "well-behaving" tenants.
> I guess this is because owners don't want to risk losing "well-behaving" tenants.
Came here to say this. An existing known well-behaved renter is a source of, well, rent. A free paycheck. With an unknown new renter, especially since afaik no Western country allows landlords to turn away prospective renters based on demographics or other easily observable characteristics (that's illegal discrimination), landlords take a gamble with their property and raise the rent as much as legally allowed to to compensate for risk (property trashed, undesirables assembling and damaging the landlord's reputation with neighbors, not being able to easily evict badly behaving tenant), search costs etc.
I rent out a small studio which I bought when I was younger, and I keep the rent the same. Theoretically, I could raise it, but as you say, bad tenants are a thing.
My friend once unknowingly rented an apartment to a bunch of guys who started cooking meth there, and after some time caused an explosion and a fire. Such things happen.
A somewhat notorious murderer in our country (when still free) reacted to a rent rise by rigging improvised shotgun trap in his flat in order to kill the landlady. It injured a policeman during a search.
Such things happen and this is the risk inherent in every change of a tenant.
On sticky rents:
Since my comment was highlighted, I dug a bit deeper into the matter. First, ON GERMANY/SWITZERLAND, here are some numbers (from Gemini Deep Thinking, not fact-checked, but meeting my expectation even though I was careful to use a neutral prompt).
I claimed that stock rents (existing contracts) increased very moderately, while new rents absolutely skyrocketed. Gemini confirmed this. The following is inflation-adjusted for the period 2005-2025:
1) Stock Rents (Existing Contracts): -5% to +10% in Germany, -10% to -15% in Switzerland. Yes, those rents got cheaper after adjusting for inflation. Totally believable, my personal rent probably dropped inflation-adjusted by 20% over the last 15 years.
2) New Rents (Moving in): +40% to +70% for Germany, +20 to +40% in Switzerland.
3) Purchase Prices: + 120% to +160% for Germany, +80% to +110% in Switzerland.
So yes, if you want to move into a big city in Germany, you are screwed. Buying is impossible, and rents, version 2), are much less affordable than back in the days.
Here is another sanity check: 20-25 years ago, when I was in high school/college looking for my first flats, there was a rule of thumb that you should never spend more than 30% of your income for rent, because more would be unsustainable. Today, roughly 50% of the inhabitants of the top 7 German cities pay more than 30% of their income for rent, some people much more.
This is an important point. Rents are not like milk, they actually matter. People may notice if the price of milk goes up, and complain. But in the end, they pay so little for milk that it doesn't matter. But if the rents go up by 50%, that means that many people now pay 40% of their income instead of 25%-30%. That hurts massively.
It seems that Germany and Switzerland are on the extreme end because they have relatively strict rental control laws that make it difficult to increase existing rents. (Though the details and the impact on the market are different. German cities build very little new housing. Swiss cities build much more, but this is outpaced by the massive immigration into the country.) The spread between 1) and 2) apparently exists in other European countries, too, but is smaller.
THE US:
I know little about the US, so I have to rely fully on Gemini here. It claims that there are two types of US cities: rent-controlled (coastal cities like NYC, SF, LA, where >50% of apartments are "rent-stabilized", whatever this means) and free-market cities. It says that the scissors effect between 1) and 2) also exists in rent-controlled cities. For NYC and SF, stock rents have increased by 10%, but new rents by 80%. In free-market cities, stock rents went up by 25% and new rents by 50% (this latter number is apparently very volatile), so the gap is much smaller. Still, it rose everywhere in real numbers. And housing prices, which are much more important than in Germany and Switzerland, have also exploded: +90% national average, much more in coastal cities.
I cannot vouch for the US numbers, and I am not sure whether they conflict with the numbers that Scott gave in his post. Perhaps someone can resolve that?
Switzerland has reliable and cheap (compared to Swiss wages) public transport, so you can live half an hour from Zurich main station with trains every 15 minutes in peak hours and that covers quite a large area.
My AI-driven search (while obviously not definitive) confirms my prior, which is that the difference between established and new renters in the US is much, much smaller, presumably because of much less regulation.
Combining point 9 (about Calvin grandparents) and point 4 (about china growth level), is it possible that people have the reached the end of hedonistic treadmill, saw that it still sucks, and thus got depressed? In Calvin's grandparents time, while it still sucks, there's still (high) hope that their grandchildren would enjoy much higher QoL than they had. But now there doesn't seem to be a path for any children to have higher QoL than their parents. Especially considering climate change where we're forced to reduce our QoL instead.
Thus, growth rate instead of level, but applied to QoL.
For Switzerland:
It's not known as "the nation of renters" for nothing. Because there are so many renters, it's politically a good move to improve renters' rights so there are strict rent control laws.
Raising the rent for an existing tenant is limited to a government-approved amount; for new tenants you have to tell them the previous rate but you have a bit more leeway.
But you wouldn't live "in the city" unless you could afford it, you'd live within half an hour commuting distance using reliable Swiss-standard public transport - or, because the single biggest landlord in the city (at least in Zurich) is the city itself, you might get a flat in a suburb where your rent is reduced based on your income.
“For young adults in particular, I don’t think the bad vibes are at all new. My go-to illustration is the first verse of the theme song for Friends, which started airing in 1994:
‘So no one told you life was gonna be this way / Your job’s a joke, you’re broke, your love life’s D.O.A., / It’s like you’re always stuck in second gear / When it hasn’t been your day, your week / Your month, or even your year’”
The first line is key here. “No one told you life was gonna be this way.” That means people were optimistic! And the beat and the ultimate message of the song were sappy and triumphant. You have friends, that’s what counts. I don’t think anyone who saw Friends would think of it as a dark or pessimistic show.
A modest proposal: the chart at the beginning of section 7 should be ignored entirely. The underlying question is kind of garbage. According to the graphic, they asked: Thinking about an annual salary (e.g., the money you earn at your job per year) and an "all in" dollar amount (e.g., your overall net worth), how much money would it take for you to be financially successful?
So am I supposed to answer with an annual amount or a one-time amount? Is this instead of or in addition to my current financial situation? (If the latter, then given that older folks tend to be better off in terms of both annual income and net worth, then of course younger folks will give a higher number.) And, more importantly than how I *should* answer that question, how did people *actually* answer and how consistent were the interpretations from person to person?
[edit: removed a typo from my transcription of the question]
https://www.slashfilm.com/1815084/how-much-monica-apartment-friends-cost/
https://listwithclever.com/research/famous-tv-houses-2024/#numbers
The apartments in Friends were unbelievably unaffordable, and only make sense in the world of fiction, or rent-control and illegal subletting.
You emphasized it, but the graph showing sentiment swinging so widely between Presidents more or less invalidates the whole exercise of economic sentiment for me.
The 35% of the country that is Republicans is essentially worthless when it comes to economic sentiment. The 30% that are Democrats were better prior to 2021, but not by all that much. And it seems they’re just as bad as the Republicans in the Trump era
How can one view these surveys as anything other than completely worthless under those conditions?
I'm also more confident on the vibesecession proper 2022 - 2024 and attribute it to *the media and the phones*
Why?
You said it yourself:
"I hadn’t considered the bad experience → complain online → algorithm shows you pessimistic content trapped prior loop."
In 2020 - 2021 we had the pandemic first, and the inflation later. It's possible that "The Algorithm" for most people became stuck in "pandemicinflation" mode for well over two years after it was over.
>In 2020 - 2021 we had the pandemic first, and the inflation later. It's possible that "The Algorithm" for most people became stuck in "pandemicinflation" mode for well over two years after it was over.
TBH I think we should consider the possibility that the upheavals of 2020-21 have genuinely traumatised a lot of people. Big, unpredictable changes in your life over which you have no control can have that effect, after all, and traumatised people often get mentally stuck in whatever circumstances first traumatised them.
Yes! The psychological impact of the pandemic is important, both in discussion about the vibesecession as well as about political polarization
I will have to repeat myself from under the original post, but the reactions to the 140k post have been strikingly bad.
Now, I haven't read Tyler Cowen (paywall), so that's one possibility that a better response exists. Failing that, Hopperdahl's number crunching is the most detailed I've seen, and while he doesn't provide a standalone final figure, I don't think his revisions would bring the number down to 30-60k you cite, I think I'd eyeball it around 70-80k which, while admittedly significantly lower than 140k, should still be enough to make Green's overall point stand. By the follow-up he pretty much admits Green's concerns are in fact valid. (His position - surely it can't matter that much, the range of the effect is smaller and his fellow number-crunchers are certainly taking all this into account already. Needless to say, I think it's overly optimistic on his part. But he, for one, can't be accused of not engaging with the actual argument, props for him.)
But then, there's the rest. Noah Smith is... I believe the term is "not even wrong". His response to an observation that some things have become necessities without which people fall into an unproductive underclass is... that people can in fact afford those things. I mean, no shit, Sherlock? If they didn't, either social norms would have to be revised to accommodate the median person no longer affording them (with either the government or employers taking over the costs of housing, transport, health- and/or child-care), or we'd witness a total societal and economic collapse.
Others, like Yglesias, are arguably even worse, nothing but vague gesturing towards Green being debunked and silly and needing not be paid attention to. (Yglesias specifically then immediately follows with a thesis that's just perfectly consistent with Green and his observation that childcare alone eats up a significant fraction of benefits from families' second incomes. I mean, come on.)
But Baumol effect as explanation is just icing on the cake here. (And, honestly, Lincicome's argument, at east the part you cite, doesn't differ much from Green's.) Obligatory reminder - Baumol effect is just another name for Labor Theory of Value. Or rather, it's Labor Theory of Value reformulated as a localized phenomenon to make it palatable to mainstream economics. But when it's used as a go-to explanation for system-wide effects, it literally becomes just Labor Theory of Value, period. It's as if, you know...
As Freddie DeBoer wryly observed under the original post (paraphrased from memory) - if only a certain German gentleman already explained all this 150 years ago. To which I can add, if only a certain Russian gentleman already predicted, almost 20 years ago, that vibes would sour in the 2020s (using an economic framework borrowed from the German gentleman and embedding it inside his state-of-the-art mathematical models). Maybe, just maybe, it's a positive proof that their framework is just better anchored to underlying reality?
And I don't even consider myself a Marxist, a fellow traveler certainly, but I have approximately zero attachment to any parts of Marx's framework, and I'd be willing to ditch them the moment they prove useless or misleading. But when I look at an example like that, the only reaction I can have is, oh my god, there's just no competition, followers of the alternative paradigm just aren't mounting any real counterargument. Even when responding to one of their own (I don't know much of Green, but he didn't strike me as particularly leftist) laying the reasoning down in very simple, straightforward terms, they just ignore it, one way or another. It's not even that their arguments are wrong, it's just that, fundamentally, they're about something else entirely. It simply doesn't feel like a meaningful pushback.
I know I'm on enemy territory here and have little chance of convincing anyone, but at least please get this - you are very much not convincing us either.
I don’t understand how women entering the workforce in great numbers was not supposed to alter the divvying up of the pie.
With respect to Mr. Green's post and the responses: you say they are striking bad, but I don't understand why you think that. You seem to admit that his $140k figure was overstated by a factor of 2, which isn't exactly a small error. If the cost of a "participation ticket" in America is $70-80k for a family of four, I don't think Green's point still stands at all. The median family of four in America has closer to $120k of income. So the vast majority are above the cutoff. If his point is that a significant minority of Americans are poor in some relative sense, that's surely true, but it's also always been true, and he presents no compelling evidence that more people are poor now than we're in 1950 (or whatever your reference point is). The official poverty line and Green's own "participation ticket" concept aren't really comparable, as the major responses adequately argue.
Yes, Green's "participation ticket" and literally poverty are two different things. But he never says they're the same. What he's saying is, we're using outdated notions of what constitutes immiseration because we keep classifying things like cars, mobile phones, childcare, etc., as luxuries without noticing that they've become necessities (saying people lived without them in 1950 is meaningless - 1950 job market didn't operate under an expectation they'll have them). And if they're not necessities in the "literally can't survive without them" sense, it's only because of a welfare safety net that prevents you from literally starving or freezing out in the cold. Now, the net is a good thing, of course - but, in a proper nominatively deterministic fashion, it keeps you in. It's not only that it's hard to get out because you'll just outright lack things necessary to get a better paying job and get out, it's that it's designed in a way that discourages trying - with a large range of income in which even if your earnings increase, your situation just doesn't improve at all. And because people - at least otherwise healthy people - aren't literally starving or freezing out in the cold, the better-off keep pretending there's no problem at all.
So you have a large number of people who are basically fucked for life (and berated for not trying even though they often have approximately zero incentives to try), you have an even larger number of people who are one unfortunate accident away from getting fucked for life, and all of those people understandably feel bad about the place they're at. (But I guess at least they're not in danger of literally starving and freezing in the streets. Yet.)
I don't think I'm even directly referencing Green at this point, none of what he's saying is new, what's admirable about his post is that he's made an effort to explain it from first principles in a way that would be hard for people like me who have alrady internalized a framework that makes most of it pretty obvious - and yet the explanation gets completely ignored, because people are satisfied that pointing out he's using "poverty" wrong or that his numbers are off suffices to rebuke him. No, no it doesn't.
(By the way, I have not admitted Green's numbers are off. All I'm saying is that Hopperdahl - the only response I've seen that bothers to retrace Green's calculations - arrives at a number that's way over the 30-60k range Scott cites. What's the correct number, I don't know, I'm not in a position to decide, about the numbers or indeed the entirety of Green's factual claims. I live on the other side of the globe, FFS. All I can do from my vantage point is observe that one side has a coherent argument making factual claims - and no, the claims aren't just the numbers, they're also about the entire systemic mechanisms at play - and the other side does nothing to address it.)
You are incorrect that the responses to Green's post didn't attempt to rebut his specific numbers or make coherent factual claims. Responses from Scott Winship, Jeremy Horpedahl, Noah Smith, Matt Yglesias (the ones I read) all did that. I don't understand how you could read any of those essays and not think that they rebutted his specific factual claims.
I'm not trying to say that Green's "participation ticket" concept is the wrong thing to look at and the poverty line is right. His core argument was that the amount needed for the participation ticket is much more than most people make (140k vs. 85k median household income). The rebuttals correctly pointed out that the quantitative argument for that is not very good. In fact, under a more reasonable set of assumptions, the participation ticket costs quite a bit less than the median family makes (70-80k vs. 125k median income for a family of 4). Of course, many people are poor and struggle to make ends meet. But it's not reasonable to claim that most people are poor, or unable to participate in American life, or whatever.
I'm not trying to argue you out of your entire worldview! I'm merely trying to convince you of the incorrectness of your original statement: "the reactions to the 140k post have been strikingly bad."
>You are incorrect that the responses to Green's post didn't attempt to rebut his specific numbers
That's... not at all what I said. I said they argued against his specific numbers in lieu of addressing broader structural issues. (Which can't really be tied to some specific cut-off, it's not like, e.g., earning 80k makes you vulnerable, but 81k already makes everything okay.)
And, again, I really, really insist on distinguishing responses like Horperdahl's (who made a serious, honest criticism that just ultimately falls short of being an actual rebuttal) from e.g. Smith (who spectacularly missed the point), and further all those Yglesias / TheArgument type people (who themselves had little criticism to say directly, but use the existence of, e.g., Horperdahl's response as an excuse to make self-satisfied noises about silly people who dare to question their narrative).
I realize this may not be coming out clearly because, once I argue that the responses fall short, I need to refer to the strongest arguments - i.e., the ones made by people like Horperdahl (whose name I kept misspelling, sorry!), but my real issue is with Smiths/Yglesiases.
(Scott Winship I didn't read, but I'll check his argument when time allows.)
I see, I misunderstood what you were saying. I guess I'd say that Mr. Green's post contained a large number of specific, factual claims, and these were being used to support an overall thesis about the structure of American society. I think that debunking a large portion of his factual claims is a productive response, and I think all of the critics mentioned did some of this debunking (and some of them linked to the debunking work of others, but there's no shame in doing that). It's understandable to leave out broader structural issues and focus on the facts given by your interlocutor when the facts are largely wrong.
I am not wedded to the validity of particular posts by Smith, Yglesias, or whoever. But I do think that they contained lots of good counterarguments which on the whole Green did not rebut very convincingly.
The Baumol effect is not "the labor theory of value". Marginalism destroyed the LVT. The Baumol effect discusses changes over time, whereas the LVT was supposed to be a constant.
*LTV
LVT is still a live idea (Just tax land!).
>The Baumol effect is not "the labor theory of value".
...yes it is. They literally say the exact same thing. You're free to try and argue otherwise, but I assure you it'll become obvious once you actually think about it for a few seconds.
“Friends” had a theme song??
Have you never seen a network TV show?
I know lots of theme songs, but I guess I never saw an episode of “Friends” from beginning to end.
Some shows get tweaked in syndication for the stations to squeeze in an additional commercial or two. This could include a truncated intro or slightly-faster playback (I swear that everybody's voices on Friends are higher-pitched in syndication than they were during the original run).
"But an alternate interpretation of this chart is that every generation believes success is ~$500,000/year, inflation-adjusted to the value of the dollar when they were in their early 20s and forming beliefs about success. This is a bit of a stretch - surely Boomers have had plenty of time to update on the value of a dollar since their 20s, especially since many of them are still working and collecting salaries. But the math works out."
The math very much does not work out. Maybe between Zoomers and Boomers. But there was not deflation between Gen X and Millennials. The period between Millennials and Zoomers was, on average, mostly a low inflation period (first Millennials reached 20 in 2001, the 2000s and 2010s were low inflation) so the jump there is unexplained (the big sustained inflation was the late 70s, mostly between the boomers and Gen X on this metric).
“why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.”
I think this is the case because people view rent as money straight down the drain, but an equal mortgage payment as at least partially building wealth.
So people will accept a $3k/month mortgage for a house they own, but won’t accept the $3k/month rent for the same house. Instead, they’ll pay $2k/month renting an apartment, all the while wishing they had the house.
The upside of owning rather than renting is somewhat smaller for apartments since you have to deal with subdividing ownership of the building itself and responsibility and decision-making for its upkeep. Condos and co-ops are a thing, but they aren't quite as clean as either "it's your house and you can do what you want with it" or "you pay your rent and the landlord is responsible for maintenance".
Restaurateurs are people still living Calvin’s grandparents’ life, it seems to me. At least, that is the tale that emerges whenever a long time area restaurant closes to much dismay (usually) because the owners are tired and ready to retire. And there are surely more of them than ever since none of you want to bestir yourselves to cook dinner* anymore. Spare some compassion for them, I guess.
*Cooking appears to be strongly associated with the bad old days.
I think the vibecession is dual-faceted. There are those who think the economy sucks because of the opposing political party (those who bought a house before 2020), even though this has no connection to reality, and there are those who think the economy sucks because of housing (those who bought a house after 2020, or have yet to buy).
For example, I work in a blue-collar environment with 20-60 year olds. The old people and the young people all feel the same about the economy—that it sucks. The old people think it sucks because of the liberals, even though they have 3,000 square foot houses with a tiny mortgage, campers, multiple hobby-vehicles, and 4 kids. The young people think it sucks because they either just bought a starter home for a higher mortgage than the old person’s 3,000sqft home, or because they can’t afford a house at all.
The catch is the young people will also blame the housing costs on the opposing political party.
So at the end of the day, you have one group who lives lavishly but sees $10 eggs and gets mad and blames their political opponents, and you have another group who doesn’t live lavishly and is mad half their income goes to a small house and also blames their political opponents.
The first group doesn’t actually have a real problem, besides the cultural/political problem. The second group doesn’t really have a problem either compared to a 1950’s equivalent—but they’re not comparing themselves to that group… they’re comparing themselves to the current day peers of theirs that lives twice as good on the same amount of money, just because of timing of a house purchase.
Finally a comment which recognizes that old people think the economy sucks too, reflecting what we see in the data.
https://data.sca.isr.umich.edu/get-chart.php?y=2025&m=11&n=1ar&d=cha&f=pdf&k=aaec868ce04b465ebdc9ed59fd7b43b8f6d7035a318894f247b0d2cbedfc7431
One comment I haven't seen expressed much re: inflation is that the increase in prices applies pretty uniformly to all, but wage inflation is not uniform at all.
Some sectors had much higher wage growth during the high-inflation period of the early 2020s, and also those who switched jobs during this period received higher raises than those who stayed at the employers.
I haven't read the comments.
Is a 1950s lifestyle available? Do livable small houses exist? I don't think you can get health insurance where they'll splint up your leg, but there isn't so much of the machine that goes ping.
What about precarity? Were expenses enough lower and social networks stronger so that there was less risk of becoming very poor?
I do think scams have become more pervasive. There's a higher risk of losing it all, but tell me if it's just that I read about scams so the algorithm feeds me more of them.
There's that bit about _On the Road_ about how a healthy man could just head out into the world and get enough manual labor to support himself. No credentials or application dance with HR needed. Or is that too early to be part of the vibesession?
"I mean, to shop at a nice grocery store without worrying too much about prices you should probably be making at least 200k"
Jesus. Before I finished my PhD I was making 70k and never had anything resembling this thought. Granted, I also tend to buy what's on sale that week without thinking too much about it much either.
"Okay, this one I’ll leave to the economists."
There's a reason why the Fed focuses on PCE inflation instead of CPI inflation. That answers part of the question. But the question will never be entirely answered because there is no full answer, and that's because there is no single "basket of goods" for which to compare prices. It is fundamentally impossible to compare the basket of goods in 2025 to the basket of goods in 1995 because the 2025 basket has an iPhone in it and obviously the 1995 basket does not; and the iPhone is a radical enough concept by 1995 standards that a hedonic adjustment of the Zack Morris cell phone just ain't gonna work.
So you choose the least bad index, which is PCE inflation (again, that's why the Fed uses it). CPI is used by others as a matter of convention, even though it's a dirty little not-really-secret in economics that CPI has lots of problems that have already been addressed (namely with PCE). Hell, the problems with CPI are even taught to undergrads. (Related note: be skeptical of metrics that deflate over time using CPI, because CPI tends to overstate inflation and that compounds over time.)
But we all know that no one listens to economists anyway, so I'm yelling at a digital cloud.
(1) Maybe it is social media. This would line up well with the timeline, with the `great vibepression' starting right around when social media becomes omnipresent. Three potential causal mechanisms (which could interplay) (a) people are constantly comparing their actual lives to the curated image of perfection presented by their `friends,' and feeling like they are coming up short. (b) negativity bias in social media algorithms feeding people a constant drip of `the world is going to hell in a handbasket' news stories (c) a culture on major social media platforms (from facebook to slack) that, in my experience, rewards doomposting with likes and supportive posts and has any optimistic posts deluged with `don't you realize how terrible things are'/`you are a bad person for not feeling bad about how terrible things are' responses.
(2) For the postpandemic period specifically, I think AI is a major contributing factor. ChatGPT came out in 2022, and shortly after, normies that I encounter in every day life started worrying. Not so much about AI killing us all, but about the more prosaic worry of `what if AI takes my job' and `what careers will still be available for my kids.'
"Obviously nothing real changes the exact second a new president is inaugurated, so people must be using questions about the economy to express their overall happiness about the state of the world."
I don't think this follows. Imagine OpenAI announces that the latest GPT is now completely capable of replacing office workers and they're going to roll it out in two months at which point every white collar worker will lose their jobs, and because this is a convenient hypothetical, everyone believes them. A lot of people's sentiment about the economy is going to get much worse even though they're still employed today, "an economy where I have a job for exactly two more months" is a pretty bad economy!
If people think the new president is about to usher in a fascist/communist utopia/dystopia that saves/destroys the economy, well they're still wrong but they aren't obviously substituting happiness answers for economy answers.
I think this is correct. Something beaten into every economics grad student (and should be beaten into undergrads as well) is the fundamental importance of expectations. The very real nature of self-fulfilling prophecies is a bit scary.
One interesting implication of the “negative media sentiment is driving bad vibes” hypothesis is that it seems to suggest the situation could be improved by countervailing positive media sentiment. Is the quickest solution to the vibecession a Soviet-style state propaganda campaign, reminding us all of the inevitable triumph of our system?
I’m being facetious – I don’t think that would work because citizens eventually come to distrust the propaganda, just as they did in the USSR. I also don’t mean to suggest that the data being discussed in the article is propaganda, but one can’t help but notice that it is discounted by the citizenry in a similar way to Soviet economic data…
I find it interesting that the economy seems to involve at least a little hyperstition, such that widespread belief in a good economy, regardless of the source of the belief, could actually help bring a good economy into being (and vice versa).
https://en.wikipedia.org/wiki/Fridge_vs._TV
My experience probably will not generalize, but here it is anyway. I am a full professor at a state university working under a union contract. Within the contract there are salary step increases and also cost-of-living increases. The COL increases are chump change basically put in there by the state so we don’t immediately strike. I hit the maximum contractual step in 2013. Objectively, I am paid a decent wage in an area with a low cost of living, but I am far from rolling in money. However, since COL wage increases are all less than inflation, my real salary has decreased every year for 12 years. It’s hard to feel good about that even though I don’t struggle to pay the mortgage.
“Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?”
Spoken like someone who has never rented (or at least hasn’t in a long time). It is very common for landlords to avoid large rent increases in order to keep reliable tenants (ones who pay rent on time and don’t damage the property).
Re: question about homeownership vs. renting
The reason people mostly don't rent houses is because if you own a house and are renting it out to someone else, you want to charge them a rent that is high enough to cover the mortgage that you pay on the house. This means that, for a complete house, rent is almost always higher than the mortgage would be. Which makes it ridiculous to rent a house, given that the tenant is paying the mortgage plus a profit for the homeowner.
The landlord's mortgage (if any) is irrelevant to how much rent a tenant is willing to pay.
I'm currently renting a house for ~2/3 what my landlord's mortgage probably is (based on when & for how much it was last sold).
Has the house fallen in price?
Why doesn't the landlord just sell it?
Why doesn't he think he can find a tenant willing to pay more?
I could see some circumstances where it might make sense for a landlord to charge less enough to make it worth renting instead of buying, but I think the general idea holds.
>"Has the house fallen in price?"
As best as I can tell, it's appreciated.
>"Why doesn't the landlord just sell it?"
I have a lease; any buyer would be in the same position my current landlord is.
As for why he didn't sell it rather than let it out in the first place, perhaps the aforementioned appreciation provides sufficient ROI even after accounting for the rent not covering the mortgage.
>"Why doesn't he think he can find a tenant willing to pay more?"
There's a basically-identical house across the alley that had been rented but has now been vacant for over a year.
>"I could see some circumstances where it might make sense for a landlord to charge less enough to make it worth renting instead of buying, but I think the general idea holds."
Rents below mortgages for a given house are common in & around Seattle.
My working theory is that the expected rent growth rate is high enough that the NPV of future cash flows, when financed at a low fixed rate, produces a current mortgage payment in excess of current equilibrium rent.
If it was just my landlord, then irrationality might could adequately explain the discrepancy, but something like the above almost has to be the case in order for rent < mortgage & appreciation to coöccur broadly.
For people (like me) who expect to move away long before the lines cross, it makes sense to take advantage of the (relatively) cheap rent in the meantime. Bonus: no risk of sudden large mandatory expenses (e.g., roof repair/replacement).
Interesting. Basically unheard of phenomenon in my slice of the NY metro area.
Some examples of piling on the Boomers pre-2022:
*) "How the baby boomers — not millennials — screwed America". Vox 2017, updated 2019
*) "How Baby Boomers Broke America". Time 2018
*) "Don’t Blame Boomers, Blame Their Parents", Mother Jones 2019
*) "Did the over-45s ruin life for the rest of us? ", BBC 2010
*) "Did the Boomers Ruin America? A Debate", NYT 2021
*) "Millennials are struggling. Is it the fault of the baby boomers?", The Graniad 2018
So being mad at the boomers does go back a while.
I also think that things have really cranked up in intensity over the past few years.
Holy crap those "financial success" numbers...
I'm making about $200k now, supporting a family of 5, including a stay-at-home wife, and I have so much money I don't know what to do with it all! What the hell are people spending their money on? I've felt like I'm so successful I could practically retire early since I passed about $140k...
Is this a geographic thing? Seriously, people, how are we living in such entirely different worlds?
We haven't needed to keep a budget since before we had kids. We eat nice food. We regularly spend $200 on a date night between babysitting and going to a nice restaurant. I still put 15% into my 401k every year and pay off the credit card every month. We are *not* frugal people! I could lose my job and not feel worried about it for over a year. We bought a 'cheap' house but we've spent almost $300k on improvements and additions over the years...
Seriously, wtf, people. My current income is 90th percentile for the country. I'm living high on the hog. How the hell is "successful" only the top 1%?
Your comment could almost have been written by me! I am also extremely comfortable supporting a wife and five children. Only difference is I'm closer to $140k. But I, too, eat out often and save over 10% of my income, and I still feel like I have lots of money left over.
You should consider starting a business or becoming a landlord. You've got to find an interesting way to use your money in a way that is actually useful (instead of an expensive hobby). And if you aren't giving at least 10% of it away, you should strongly consider that.
A lot of it is geography, I'm sure. Some of it must be that you just don't want to make some of the expensive purchases others do. Maybe if you and your wife both had $100,000 Lexuses and took long international vacations every 3 months, you'd feel less flush.
Put me on this list too. Combined household income (in UK) translates very close to the 200k US..... and I'm currently "comfortable, if not outright well-off". Similarly live in a house purchased for around 400k in US dollars and in "high cost of living" south-east UK/around London area, 2 foreign holidays a year, student loans paid off etc etc.
I see a lot of people in my income bracket buying designer clothes, or luxury brand cars (or more often leasing them), and I don't do this. We don't eat out very often, don't shop in the high-cost supermarkets etc etc. but I'm not budgeting here, if we want something we just buy it (usually from Amazon).
This is hardly being "frugal" so much as (in my mind) the quality differential between mid-range and top-end stuff (~20%?) not being worth the price differential (~100%+) so I don't go nuts and stay with the nice mid-range stuff.
On track for super-early retirement.... who on earth is earning $199,999 and considering themselves "just below the poverty line" or "just below the participation stakes line"?
> Is this a geographic thing?
Yes. Of course that clearly depends on your city. Given you bought a cheap house then it’s not a major city, or you bought in a cheap era.
> I've felt like I'm so successful I could practically retire early since I passed about $140k...
> I could lose my job and not feel worried about it for over a year.
Well, of course you can’t retire. Unless you are one year away from a pension.
I live in an area that is not below average in housing costs. The survey was claiming to be nationally representative.
I guess I am arguing for the "all the influencers in high cost of living areas are dragging down the vibes" interpretation here. "I can't be financially secure on $200k" is only plausibly a problem in half a dozen metro areas. But somehow a *national* survey has people thinking that's the standard...
Sure. But Gen Z are still mostly teenagers. Maybe they are anticipating (many of them) living away from where they grew up - at least for a few years. The early twenty something year olds might also be in those big cities or expensive college towns and that’s what they know right now.
Not really meaning this as a full rebuttal, but you made me think of it. It just feels weird to me how these conversations/vibes seem to completely ignore... lots of smaller cities?
It's not like your only options are living on a farm or living in San Francisco... There are dozens of cities no one would call a "small town," which are full of jobs and successful industries, and in which rents are still reasonable. Maybe not as cheap as they used to be, true, but not unobtainable, especially in areas that have lots of land to expand into.
I mean, I live "in the country", but I'm really just outside the suburbs of a top 20 metropolitan area. Our housing prices have gone way up in the last 20 years, but you can still buy a home big enough for a family of 4 for $200k. There are > 400 software engineer listings on linkedin I could drive to. I feel like most metro areas are like this...
I hope that Gen Z doesn't feel like there's only 2-3 places in the country they can move to to have a career...
“Question for Aristides and others: why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.”
It’s a combination of supply and landlord quality. There are a lot more apartment rentals available and especially if you have a short moving window, it can be hard to find a house to rent, but there’s always an apartment to rent.
I’ve rented 6 apartments and 2 houses. After my experience, I would be even more hesitant to rent a house with a child. It is extremely difficult to get single house landlords to repair anything. My house rentals have had huge mold issues, AC breakdowns, plumbing backed up, and many other problems that I’ve never seen with apartments. The mold is why I did move from a house rental to an apartment rental when I had my kid, based on all the potential health issues mold can cause long term.
If I owned the house, I would pay to fix any of these problems with it, but it’s not worth it when I can get kicked out any year. Apartment Complexes have large economies of scales that makes it more profitable to make the repairs, but single house landlords have been extremely cheap in getting anything repaired, in my experience.
That makes sense. On the other hand, I rented a house for a long time where the landlord lived upstairs. The yard was ours with a few exceptions. He was great at staying on top of repairs and maintenance, probably because he lived there! But I think that you may just have to be more sensitive to the type of ownership and management when renting a house.
Follow-up to Kyla - economic sentiment data actually started breaking around COVID (per usual, COVID ruins everything). Don't know specifically what happened, but a number of prominent surveys (e.g., U-Mich, https://en.macromicro.me/charts/110438/us-michigan-consumer-sentiment-index-within-political-party) started showing huge partisan splits in what were supposed to be generic economic questions. Split was considerably less pronounced and/or non-existent prior to 2020. So from the data side, that's a big chunk of what's doing on.
Comments about how middle class people lived in the 1950's:
People generally were very frugal. They were coming out of a very long depression and years of wartime rationing. They darned socks, turned collars, patched knees and elbows, handed down or swapped clothes that were outgrown, wore shabby old clothes when they worked outdoors, and used the clothes that were completely worn out as rags and patchwork. They made a lot of their own clothes. They re-soled old shoes. They grew a lot of their own food and pickled, canned, and otherwise preserved it in various ways. Adults and kids were expected to clean their plates, and any scraps - stale or leftover food - was fed to dogs or livestock. By the way, pet dogs and cats that were sick or injured got well or died on their own. If they were suffering they were put down. Vets were for valuable farm animals and horses.
Middle class people knew they were not poor because poor people were highly visible. They lived in tenements or tarpaper shacks without indoor plumbing, and their kids needed shoes. Poor people did not own cars or televisions or washing machines. Middle class people were constantly reminded by daily that they were much better off than the poor.
Doctors at the time routinely price discriminated. They knew their patients' circumstances from visiting their homes and seeing them in the neighborhood and charged accordingly. Today there are hundreds of drugs that cost more than $100K per year. Assume that is the equivalent of $10K in 1950. That a drug could cost more than $10K a year would have been unthinkable in the 50's. No insurance plan would have covered it, and even the handful of super rich people who could have afforded it would not have bought it unless it was a true miracle cure.
The negative vibes that struck me was when my middle-school-aged daughter came home talking about it.
"Why should we have kids? There are way more people than the planet can take anyway."
"Everyone keeps saying the world is completely messed up and it's our job to fix it, and I don't want to deal with that pressure!"
She's not on social media. She's picking this up from teachers and official media specifically aimed at students, largely in the form of the Doomerism/self-flagellating brand of environmentalism. Any positivity she has about... humanity... comes from us arguing with her at home... And that's coming from a pair of libertarian parents who are about as cynical of government programs as you can be.
If she's picking those vibes up this strongly at *a rural public school in the midwest* ...
>If she's picking those vibes up this strongly at _a rural public school in the midwest ... _
Morbidly curious: What is she being taught about the US's positive/negative role in history and the current world?
Lots of time spent on the Founding Fathers and the revolution. Washington mostly gets excused for being a slave-owner. Jefferson comes out a bit worse. She went a little deeper into that because she likes Hamilton the musical.
They haven't done any US history post-civil war.
Civil war was definitely about slavery.
I get don't get the impression that the Indian Wars have gotten a ton of time devoted to them.
In general, though... she's had all of two what I would consider "useful" years of history instruction total. Elementary school just doesn't really teach it.
Many Thanks!
In my own experiences, the vibes are bad due to two reasons First, the real loss of purchasing power in a small but highly salient set of expense categories like housing Second, the increase in uncertainty about the future.
For me, I saw housing that would have been an easy comfortable purchase for me in 2019 become unaffordable in 2022. Given how much housing affects everything else (community, schools, commutes, etc) this is a huge effect.
But the second one might be a more important factor. It seems that over the past 5 years, we are increasingly living in a more 'tightly coupled' system where the amplification has been turned way up. small deviations in sentiment create positive feedback loops which cause the cost of certain goods to skyrocket overnight. We saw this in the pandemic with toilet paper. Why toilet paper, of all things? who knows. We also saw this with eggs and beef. Eggs eventually came down, but beef has not really. Recently RAM/commodity computer hardware and silver are doing the same thing. Will they be more like eggs or beef? Who knows (unless I can find the correct expert analysis which is increasingly difficult). Beyond market dynamics there is obviously the pandemic itself, the advent of AI, which might or might not wipe out all white collar jobs, the shock and awe tactics of the Trump administration, possible war with China (by 2027?!)
Basically, in 2019, I would have passed the marshmallow test with flying colors. Today, not so sure. It seems that any affordable good or service today can instantly become expensive or unaffordable, or unavailable with little to no warning. This makes planning for the future more difficult. I find myself increasingly likely to jump at opportunities for near term gain with less thought for the long game. This is personally stressful for me, being raised to see "delaying gratification" as a kind of a virtue, but it is also the knowledge that the decisions I make must be both correct and timely, rather than just correct. My decision to buy a home in 2024 rather than 2023 or 2022 meant I paid at least a 50k premium to obtain a house that met our requirements. That money may as well have been lit on fire. I carry a larger emergency fund than I would have in 2019 even though I know this is hurting the long-term gains in my retirement fund.
I was just reading your old post Burdens (https://slatestarcodex.com/2014/08/16/burdens/) yesterday, and thinking about how someone who feels like a drain on their current community should consider making a radical change and move to a community where they wouldn't be a burden. I also wouldn't want to take up J Nicholas' butcher's offer but that type of thing might be fulfilling for someone who didn't have anything else going for them.
Two comments on the comments re the "vibecession": First, their is little to no discussion of debt burdens. In the 50's - 60's (when I grew up) debt was a much smaller component of purchasing power; now it is pervasive. Student debt was, if not negligible, a much smaller part of our generation's burden, and a non-issue for much of the population. High and floating credit card debt is definitely a stressor. Folks living paycheck to paycheck find themselves putting "extraordinary" expenses on credit cards, and servicing that expensive debt for years. This is by design. Legislation making student debt non-dischargeable in bankruptcy has aggravated the problem. The second issue is job security, or the lack of it. Frankly, a growing population that is ever more productive is a process that cannot continue indefinitely. Stein's law says that anything that cannot continue forever will stop. Since we value productivity, we are beginning to compensate by not reproducing at a replacement level. Perhaps if the fruits of productivity were shared more equitably we would feel better, but the pace of change is difficult for most people, who value stability, to endure.
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
From my experience of renting in the non-rent-controlled segment of the SF market: only the big corporate-owned apartment buildings are willing to continuously raise the rent to match market prices.
Private landlords are much more interested in keeping someone there that won’t wreck the place and will pay reliably, since most of them are doing the job part-time.
The corporate buildings have a leasing office and a team helping them continuously bring new residents in. Private landlords don’t.
We ended up in a very below market apartment for years in downtown SF, because our landlord only ever bothered to raise the rent once, when his condo fees went up. Both we and him were happy in that arrangement.
We only moved when our first kid’s impending birth forced our hand, at which point he listed it for something like $1000 more.
Comment on CPI:
it is an aggregate measure used by binning different cost categories. These cost categories are based on a hypothetical average person. However, we don’t spend equal proportions of our incomes on these bins. For low wage earners, groceries is a higher proportion of your budget, therefore, if grocery bin is 4%, but overall is 2.5% because things like electronics have been getting cheaper, then you might be experiencing more inflation than someone wealthier than spends more money on bins like vacation travel and skis, etc.
I suspect some degree of vibcession is genuine decline of living standards, and telling poor people they are wrong when you use metrics based on means might blow up in your centrist face. Also, partisan tinted glasses seem to have big effect.
-observations in Canada.
Yes, that’s a big big reason. Your particular numbers are off. I think food is 10% of cpi but the bottom decile pay 25-30% of disposable income on food. Even worse they can’t really substitute for cheaper products, as they are buying the cheapest already.
That laptops face more bells and whistles doesn’t matter to them at all.
A comment on Golden Feathers comment that ‘populism’ in the Nordic, etc. countries look "more like ‘MAGA" (which GF relates to immigration patterns in the EU that I don’t dispute).
Speaking as a dane (now in the US), what is described as populism is IMO a realistic assessment of what it requires to sustain the cultural cohesion upon which everything else rides in a small country. Importantly the response is governmental, and is more data driven than ‘vibe’ driven. Denmark is clearly aiming to quantify and deal with destabilizing factors in a practical and fair way. So the government is simply doing its job, quite transparently, and functions as a stabilizing center.
When countries do not acknowledge perceived problems and disallow open discussion, there is genuine frustration, which amplifies a sense of things going badly, and worst case interpretations and overreactions get room to thrive. The political graphs to me indicate that bad vibes are related to a lack of stabilizing political centers (among many other things - thanks for the deep dives).
I find it somewhat ironic how Scandinavian-built Minnesota got expertly welfare-scammed by the same Somalis who are disproportionally on welfare in Scandinavian countries as well.
As you say, some institutions cannot really survive the loss of cultural cohesion upon which they have been built. Welfare states are one of them.
So DK determines that recent immigration patterns has resulted in ghettos with different rules and higher crime, and determine that some immigrants become a disproportionate burden on the social network (which they like and all contribute to). And the Social Democrats, not the far right wing, conclude that immigration and ghettos have to be managed. And unlike Minnesota, the problems are spelled out, not danced around, so it is more about system, not ethnicity. And frankly basic competence and transparency.
Given that the system depends on everyone playing by the same rules it is not the best system for all places. This doesn't mean the successes achieved are suspect, one can simply note that those successes were achieved under very specific conditions, not easily replicated.
So not sure I get the irony. Sure welfare states are fragile, but no state should take their orderly continuance for granted.
I find it nearly impossible to believe that real nyc rents are unchanged between 2010 and 2023—or if they are, it’s a function of supply increasing and prices falling in the outer boroughs. Manhattan rents have at least doubled since that time, and cpi is +40%. Chat gpt says median Manhattan rents are up 90%.
Anecdotally, west village rents are up that much since 2019, let alone 2010. I think measuring “nyc rents” is a bit fraught in this way—the product is changing for the worse, but unlike when it changes for the better, you’re not doing a hedonic adjustment downward.
One comment on the housing part of the overall economics: I realize that you've already included the overall housing market in the analysis, but one contributing factor to underbuilding housing, at least in California, in not just NIMBY, but red tape. At nearly a year after the Palisades fire, only about 13% of homes have received _permits_ to rebuild ( https://www.latimes.com/california/story/2025-12-17/after-rocky-start-rebuilding-in-palisades-altadena-is-gaining-momentum ) - never mind actual rebuilding... And restoring the status quo ante shouldn't trigger NIMBY restrictions, since the burnt homes were, after all, previously there.
I started seeing the Baumol effect everywhere after I learned of it a few years ago. He should've won a Nobel. It should really, *really* influence policy making around health care and education. I've heard Seth Moulton talk about it and, not surprisingly, he has endorsed some of the ideas behind Abundance.
On China, Peter Hessler was a teacher there in the early nineties and again in the late 2010s through COVID. He has been surveying his students for decades about quality of life and expectations, and he discussed some of the trends with Yascha Mounk in June.
https://writing.yaschamounk.com/p/peter-hessler
While I suppose all lifestyle spending is marginal spending, vacation/travel seems like the most common thing to sit at that cusp of your last few thousand dollars of income. Probably because unlike most things in our lives these days, it hasn't been converted to XaaS, you're pretty much always choosing whether and where to travel based on what you can afford as a one-shot expense. And it is highly flexible, you really can do a large variety of trips that involve the same destination or activity and could vary 10x in what you spend on them.
So the difference between feeling like you're keeping up with your cool young 25-39 y/o peers in the professional-managerial class versus feeling left behind could actually be really small. You swing an extra $10k in income per year when everything else is already covered and you can wring every bit of Instagram travel bragging you want from that. On the flip side, if your salary stagnates and inflation and housing costs eat away at disposable income, that's the first thing you scale back because it's not built into a budget and it's easy to adjust by e.g. shaving a day off the trip or downgrading a room. Until eventually you find that last property tax hike has finally met up with the rising hotel prices and you've been priced out of travel. I've had a respectable (for my locality) salary that's been stagnant for a decade, and it used to be trivial to pop off for a long weekend to Nashville or Alabama shores or something on that scale, and we could have gone anywhere in the USA on maybe a month's notice or less with no other planning. Now I'd need a couple months to plan the Nashville trip, and going out to California wine country would be the only trip we'd be able to take that year. But the amount of money needed to revert that to feeling like it did before really is just like 5%-10% of my salary. It is a very small amount of increased/decreased spending power to cause so visible of a lifestyle discrepancy, and I think that fits into all of this.
I think the rise of silicon valley coupled with the hollowing out of manufacturing, caused the number of viable cities\suburbs to shrink. The "economy" is ~70% "local" (grocery stores, utilities, banking and law services etc addressing a specific local market) surrounding a profit export center (a big factory, R&D center, port etc that brings external money).
If you are a software engineer, seeking to live in a "good neighborhood" while keeping your job, you are stuck in the most expensive cities in the US. Compare to factory jobs of various kinds, in the past there were centers all over the coasts and the mid west (think Indianapolis, Milwaukee, etc). Sure there might have been more opportunities in Chicago or NYC, but there were decent opportunities everywhere. (Both in the profit center and the service constellation).
You can see some of this dynamic in the graph on the increased concentration of media in NYC/SF/DC, you have 3x the number of opportunities in NYC/SF/DC, but you are subjected to that cost of living. A similar trend happened to every job. I would guess that part of the resistance of people to take over that butcher business, is the future in which that town no longer exists.
I think you are onto something here, but I wouldn't pin the cause on the transition from manufacturing to tech per se. What I think we are seeing is an across the board agglomeration and consolidation of function into specific regional areas.
This has been going on for a long time, much longer than the 'vibecession' period in the post. Look at a map of the USA, particularly old maps: The east coast, which was settled much earlier, you have a larger number of hamlets, towns and villages, etc scattered more evenly over the landscape. While many of these are defunct, you still can still see this distributed pattern of development. OTOH, the west, which was settled later, has a smaller number of population centers that are more centralized into larger (sprawling) metro areas. Patterns of consolidation in are also obvious in other industries like automobiles, aircraft, farming, etc. over the 20th century.
I believe the root cause of this is the reduction in friction or transaction and travels costs between different geographic areas. When travel frictions are high, expanding your market three towns over is difficult, so there is a natural geographic protection effect. When travel costs are low, two firms in two nearby cities directly compete for market share and scale, and in the end only one can come out on top.
Today of course we live in a globalized economy where firms compete not just against their brethren three towns over but all the way in China.
The entity that killed the local butcher was the supermarket, a different form of agglomeration enabled by the personal automobile (friction reduction).
And tech (software especially) has inherently low transportation frictions because their product can be 'manufactured' and consumed by anyone with an internet connection, vs manufacturing which requires moving real mass around.
yes I'm not claiming the transition to tech was the cause of agglomeration, just a side-effect, and downstream from that is the vibecession vibes.
I think there is also a "percolation breakdown" effect here. Agglomeration might increase linearly, but could still have sharp transition points. That is, at 10 major centers things are fine, at 9 there is a network break down.
The whole vibecession thing is sincredibly simple and I can't believe it hasn't been mentioned yet.
Real Disposable Income peaked with stimulus and then decreased, even while econ growth was fine. People care about real disposable income (RDI) not GDP. Economic growth is usually an indicator of growth in RDI but they're not the same thing.
In late 2020 and 2021 RDI massively increased, peoples transport costs decreased because they were working from home AND there was massive stimulus in government handouts, debt jubilees , that essentially brought forward spending power (which we later paid for in inflation).
Afterward economic growth was fine BUT, RDI decreased which made people upset, stimulus disappeared and prices increased.
That was it. It's third world crap, same reason third world incumbent presidnets shower out as much money as they can reight before an election
You can tell you and most commenters are fellas. Ask any woman who runs a household budget if $250 per month for a family of 4 on food is a joke? And "Groceries" aren't just food. There's a lot of dull stuff in the trolley that you can't eat. Toilet rolls, cleaning fluids (soaps, toothpaste, creams, gels), wipes, kitchen towels, etc etc etc. And soft drinks, coffee, sauces, etc etc etc. More like $10000+. And utility bills. Power, phones, internet, non-health insurance, etc etc.
1000 not 10000!
yeah 250 for a family of 4 is woefully tone-deaf. A more realistic number is $600-$1000.
There is an interesting meta-explanation that I’ve seen a few places that seems to be reinforced by almost every other speculative post like this one.
We occasionally see people express that feeling that they can’t afford to have kids. There are often predictable replies where people break down the various costs of things and compare it to income levels and conclude that actually, you can afford to have kids. Yet the feeling persists, I believe, because the problem itself is not clearly captured in the phrase: “Can’t afford to have kids”.
Consider this expanded version of the phrase: “I can’t afford to have kids that I can reliably pass on my middle-class status too as if it were hereditary, while also maintaining or increasing my own socioeconomic status.”
This, to me, explains a lot of the negative sentiment and why pointing out any individual’s circumstances in the moment does nothing to reassure them. For almost my entire adult life (I’ll be 50 soon), the primary anxiety of the adults of my generation and younger has been making the middle class somehow hereditary in practice for their kids. If you make a list of all of the things that are considered required for this its has essentially perfect overlap with the main complaints repeated in posts like this one. You have to have a minimum quality of single family home in one of the ‘correct’ areas so the kids grow up around other kids who are also bound for the middle class, adopts the correct class markers, avoids “those people”, attends an acceptable school with the right attributes (class quality, extras, *who the other students are/aren't*).
College is also necessary but not sufficient by itself. You have to at least get a 4 year degree. Depending on how much nepotism you can leverage this may just be status/class signaling. If you don’t have access to quality nepotism you’ll have to actually learn a useful set of skills here. (more young people need told this explicitly). And even if you get the housing and college parts correct, if you lack the connections and resources to be taken care of regardless of your degree, for a lot of people a college degree isn’t much more than a raffle ticket to the middle class. And an expensive one at that.
I have no hard data to share, but this is about vibes anyway. I think the primary driver of the anxiety and fear that is causing this vibe is knowing that you can do everything correctly per the above outline and, unless you have sufficient nepotism that you would have been fine regardless, you or your children can still fall out of the middle class with ease. It doesn’t mean you’re going to, but you could. And you can’t totally protect your children from it no matter how much you spend, you can only increase their chances. Maybe. No one wants their kids to have a worse life than they did. Many will not produce children unless they are confident they can assure this, not simply being able to “afford” them in the immediate term.
And examples are everywhere of the feared outcomes. For me, my own raffle ticket was a winner of sorts. I grew up poor, raised by an addict single mother on gov’t assistance, first member of my extended family to graduate college (with an accidentally useful major, statistics, was almost sociology. As an 18 year old I had no idea). I’m smart, but my upbringing also made me ruthless, distrustful, and at least partially sociopathic as a survival mechanism. All traits generally rewarded by capitalism when combined with a marketable skill. Things have not gone nearly so well for my wife. Both of her parents had master’s degrees in STEM fields and very good jobs. They also died relatively young. Her father’s estate and life insurance was largely scammed out of her mother, who was very skilled and educated but not very smart, and her mother died a few years later after losing her life insurance because she forgot to pay the premiums (early onset dementia). Neither made it to 50. Her death actually cost us a few thousand we really didn’t have to spare. My own parent’s deaths (56 & 60) also cost money on balance, but was entirely expected and qualified for assistance for the families of impoverished deceased. My wife’s socioeconomic status has slid a good amount since childhood and I’ve overheard other people in the community use her life as an object lesson/source of fear for themselves and their own children. She couldn’t really be around her peers from childhood or their parents generation without becoming severely depressed until I helped her meditate on the impermanence of all phenomena. My own SES has gone up a fair amount, I’d consider us firmly in the lower middle class, but only with a combination of both work and a good amount of luck. The current trends in childlessness resulted in us inheriting a decent house; her grandparents had 6 children, only one of which, her father, had kids of his own. So we got grandma’s old house and a chunk of land. We also don’t have kids. Not by choice, my wife is infertile. We live in one of the wrong areas anway. My wife is disabled and cannot work outside the home but does an admirable job in my opinion of keeping the house for us. I'd estimate my income and her SSI amount to about 10% of what her parents combined income was, maybe a little less. She has a whole album of photos from her childhood from luxury vacations to exotic locations we could never even dream of visiting on our adult lives, and a handful of luxury consumer goods from the 80s and 90s somehow missed by the family vultures. And the house. If something happened to me there is no one who could take care of her.
However, one could easily make a post using my current finances to make an arguement that everything is fine and we have a good life, and I tend to agree that I do. But it could all vanish in the blink of an eye.
I do remember to pay my life insurance premiums.
Something REALLY important that I haven't seen brought up is that during the vibecession, younger people had a higher consumer sentiment than old people(1). This seems to cut against roughly half of the narratives that people are putting forward, i.e. the rent being high in Brooklyn isn't a good explanation for why the Boomers' vibes are bad. (This could also be weak support of the "it's just inflation argument" since older people are hurt more by inflation due to having more savings.)
(1) https://data.sca.isr.umich.edu/get-chart.php?y=2025&m=11&n=1ar&d=cha&f=pdf&k=aaec868ce04b465ebdc9ed59fd7b43b8f6d7035a318894f247b0d2cbedfc7431
Also, thanks for including my comment Scott.
I wonder if involution (the need for people to put in more and more effort to stay in the same place because of, essentially, Moloch) is a factor here. For example, I think it will inherently be more frustrating and discouraging to people if they need to apply for hundreds of jobs to get one offer than if they only need to apply for things that stand out to them as good fits, even if they get a job of the same quality in either system. We also see this with high school, college, grad school applications, success in various competitive fields such as sports (where you need to start earlier and earlier to have any chance at the pros, and hence you don't really get stories about people discovering a talent or a passion) and resume building in general.
I also wonder if Gen Z is defining the term "financial success" differently from how Boomers would have. To me, a financially successful person is at least upper middle class (and so I think- but successful members of older generations wore furs and expensive jewelry that is much less common now); maybe to Boomers, that is 'rich,' whereas 'successful' is anyone who can pay for their basic needs and the occasional want, because people genuinely being unable to do this was much more common (see meteoric decline of extreme poverty.) On the other hand, it's much more common for middle class members of younger generations to be in serious debt and to be likely unable to ever own a house, partially because, as you discussed in your cost disease article, the cheaper versions of many goods and services are no longer produced because they either were banned or are less profitable.
It does depend on the definition of success. If it’s just comfortable then Gen Z is wrong. If it means the most successful then Gen Z is right.
As for what Gen X thinks - a retirement income does have to be that high to be very comfortable, it’s a stage of life when pensions and savings are drawn down not paid into, mortgages are paid, debts are mostly finished (including college debt - although that wasn’t a problem for boomers), and people have fewer dependents - neither parents nor children.
On living in Sacramento on $80k income:
I think the main difference here is you chose an area to live with above the US average cost without adjusting the $80k income. On average, people living in more expensive areas will have higher income. Meanwhile, the article you referenced chose an area with below average housing costs.
>I’m younger than Erica, and have less pop culture literacy: can someone tell me whether the Friends theme song was meant to express a zeitgeist that would be immediately recognizable by and sympathetic to most viewers,
Absolutely not. I watched Friends in college (graduated '96). There was zero generational malaise among my peers. The quoted lyrics are expressing the ubiquitous growing pains that everyone feels as they start to make their way as adults. It's "welcome to real life" not "we're all doomed."
My full thesis, which I didn't fully explain in the comment Scott quoted, is that it's still growing pains of early adulthood but people in the relevant demographic have gotten progressively more pessimistic about the growing pains being a temporary vs permanent condition.
I was in middle school when Friends started airing. I graduated college in the early 2000s and noticed a mix of attitudes about the growing pains among my peers at that time: some parsed them as mere growing pains while others definitely took a "we're all doomed" attitude. I was in the growing pains camp myself. Among younger friends and relatives who reached that life stage several years later, I observed increasing prevelance of the "we're all doomed" attitude.
I suspect the growing pains have objectively gotten somewhat worse. I also think there's a cultural shift going on, probably a combination of bad vibes being contagious, a series of major events that have eroded trust in institutions, and probably some other factors contributing as well.
> people in the relevant demographic have gotten progressively more pessimistic about the growing pains being a temporary vs permanent condition
I don't really understand what you're saying here. Is it that the song is really saying "20 year olds in the mid-90's have a tougher time adjusting to adulthood than 20 year olds did in the 1980's"? What's the textual evidence for this?
If you graduated in the early aughts then you graduated in a post-9/11 post dot-com-bubble world where real estate was already charging towards the 2008 meltdown. Oh and liberals were apoplectic that the 2000 election showed that the political system was broken. Even if it was only a few years later, the vibes for your generation were significantly different from the vibes for my generation and I think it's a mistake to project mid-aughts vibes onto a mid-90's song. Like I said above, there was zero "the world is doomed" vibes in the mid 90s among anyone I knew. Communism was dead, America was the unquestioned hegemon, and the economy was in the midst of a long bull run behind the PC/internet revolution.
>I don't really understand what you're saying here. Is it that the song is really saying "20 year olds in the mid-90's have a tougher time adjusting to adulthood than 20 year olds did in the 1980's"?
No.
I am making two points, one about the text of the song and one where I am trying to extrapolate between the song and my own experiences and observations half a generation later.
The claim I am making about the text of the song is that it's about 20-somethings in the 90s finding early adulthood surprisingly difficult, especially in terms of jobs, finances, and dating. I don't think the song makes any claims about other times or generations.
The second claim, which is informed by the first but also informed by other things, is that the song is evidence that 20-somethings in the 90s often experienced those sorts of growing pains. I know from my own experience that 20-somethings in the 2000s also often experienced growing pains. I have observed 20-somethings in the 2010s and 2020s also experiencing growing pains. The nature of these growing pains strikes me as qualitatively similar from the 90s through the present, although their severity has definitely varied with time: as you alluded to, I expect people graduating in boom years of the late 90s, c. 2005, and c. 2015 had an easier time career-wise than those graduating c. 2002, 2009, or 2020.
I agree with you that there does seem to be a trend of the people experiencing the growing pains being more likely in recent decades to interpret them as "the live of everyone like me are going to suck forever" rather than "my life is kinda rough right now but I expect it will get better". I saw both attitudes in parallel in the early 2000s, with the former becoming increasingly dominant in the 2010s and especially post-Covid, and I believe you that the latter attitude was strongly dominant among you and your peers in the mid-90s. I think the main thing I'm getting at (and citing the song as evidence for) is that the growing pains and the frustration from them date back at least to the mid-90s.
Come to think of it, I wouldn't be surprised if the mid-90s were actually an island of relative optimism compared to both the 80s and 2000s, for much the reasons you brought up. I obviously wasn't an adult in the 80s, but I do remember a lot of "the world is doomed" themes in music and movies from the 80s and early 90s, and that the attitude I see embodied by the song and the plotlines in the early seasons of the show may actually be a lagging effect of that. The showrunners, David Crane and Marta Kauffman, both started the respective writing careers in 1987. The duo that wrote and performed the theme song, Phil Solem and Danny Wilde of The Rembrandts, are a bit older and seem to have started their careers c. 1980. While the show started airing in 1994 and was set in the present, it would make sense if the showrunners and songwriters based the show's and song's vibes more on their own respective experience of being a struggling 20-something than on what people like you were experiencing at the time the show was airing and set.
Ten seconds with Google says that Basel and Geneva have rent control, and Swiss rents nationwide are capped so that the net yield is a reference mortgage rate plus 200 basis points (2 percentage points).
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
As a landlord myself, the incentives aren't really stacked to do so.
1. Bad tenants are a nightmare to deal with and get rid of, so when I have a good tenant I want to keep them there. In some sense not raising the rent at the end of the year is a kind of implicit discount for good behaviour
2. If rents go up 5% in a year, I raise rents 5%, and then the tenant goes elsewhere I've just lost between 10-20% of my revenue for the year because it takes a month or two to fill the apartment. So there's a local incentive in any given year to not raise the rent (even if it's unlikely the tenant actually would leave, see pt 1 as well)
3. These incentives make sense for a single year, but get more and more misaligned over the course of a decade.
4. Also, if I was a full time landlord and trying to optimise everything this makes sense. But in reality I treat it as a passive investment and outsource most of the management to a real estate agent. That agent is not really incentivised to squeeze out every last drop of profit, because losing a tenant creates a bunch of work for them to move someone out, find a new tenant, and move them in. So they're not going to be proactively telling me to raise rents, they're going to quietly hope things continue with no disruption and they keep pocketing their 4%
5. Local markets - you allude to rent controls, but there are other factors at play too depending on the region. Where I am in Japan, tenant protections are strong and it's very hard to evict someone, which emphasises pt 1. I also can't raise rent at will - I have to survey and document prices in the area and prove that the current rent is underpriced before I can raise rent. This work (on top of pts1-4) disincentivises trying to raise rents on a regular basis which results in inefficiencies across years. It also might not even work - if other houses nearby are also under-priced then I won't be able to get data to show that I need to raise rents
China is definitely a lot richer than it used to be, but its youth unemployment rate actually is ridiculously high - something like 20 to 30 percent (!) - or so I've heard. In general, going from "things kind of suck now but they're getting better quickly" to "things don't suck as much but things aren't going to get much better than this" actually is the kind of thing that sounds really bad for vibes.
> Should we subsidize journalists, on the theory that if they’re in a good mood, everyone else will be in a good mood too?
Isn’t this kind of sort of the intention behind government-subsidized news outlets in non-US countries like the CBC and BBC? In my experience they’re noticeably less extremist and aggressive than a lot of major US news networks.
I'd like to address the following from a German perspective. But I'm sure some form of this is true for multiple European countries.
> I’d like to know more about what factors hold rents down for long-time residents. Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
It's somewhat of a complex mess of various mechanisms, contract types, modernization subsidies, welfare etc. This does also vary by region. So I just want to clarify on the core point about how this is possible as straight-forward as possible;
We have various kinds of rental contract types that negotiate the rent/and possibly future increases. There are various legalese ways that decide what can be raised how, but most of the time this ends up with max ~6% rent increase per year (~20% for 3yrs) until some benchmark rent for the area/comparable objects is reached. Older contract types might be even more limited in growth p.a., I vaguely remember something about 3% p.a. Old contract is almost as good as generational wealth, especially in major metropolitan areas.
While renting out a new flat allows you to set a price from scratch. Those are also in theory capped as far as I understand, at least in some German states, but this is where theory and reality drift apart; A lot of people who just move places, especially to urban areas, possibly being from other parts of the world, won't question or fight the price, as they'd not get any place in a sellers market. While it's possible to sue, even after the fact, this remains a hobby of few. But even this aside, being able to re-rent afresh frequently allows you to track the maximum growth of the market.
> "Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?"
From what I'm hearing from everyone else here, this sounds like a 'Market for Lemons' type situation (https://en.wikipedia.org/wiki/The_Market_for_Lemons). Briefly put, each potential renter a landlord can take on, will either turn out to be someone who trashes the place, or doesn't trash the place. The landlord doesn't know, however, who will trash the place vs. not trash the place. So the price they charge new people, will be in-between the low price they'd charge people who don't trash the place, and the high price they'd charge people who do trash the place.
If you then, as a renter, reveal that you're the sort of person who doesn't trash the place, the landlord will then effectively lower your rent (over time, by not raising prices, or raising them very slowly), down to the level of rent they charge people who don't trash the place. If you as a renter instead reveal you're going around trashing the place, the landlord will raise your rent, or when that is banned, try kicking you out (which is also frowned upon, but still doable, generally speaking).
So, the market price for rent is the price for someone who may or may not trash the place. Reveal that you won't, and your rent goes down. Reveal that you will, and your rent goes up. But until you reveal it either way, your rent has to be in the middle. Therefore, the market rent has to be in the middle: higher than that charged to 100% confirmed non-trashy people, lower than that charged to 100% confirmed trashy people, because landlords are dealing with a mix of trashy and non-trashy people.
(What the exact mix is, of course, depends; it could be as high as 50-50 though, even in places with very few trashy people, simply because trashy people 'stay on the market' a lot longer than non-trashy people, and keep re-entering it as well when they get booted out of their previous place for trashing it. This is why market rents can be so much higher than the 'actual rent' people pay on average.)
Re: rent for newcomers versus longstanding tenants.
In my quite regulated province, new tenants can be charged anything for their apartment, but increases can only be some provincially-set increase, generally very close to inflation. And it's almost impossible to evict someone who pays their rent It leads to quite a different rate in rent between new apartments, and tenants who have been in the same apartment for scores of years. And I think we're generally not considered a "rent controlled" area.
Also, new buildings don't have to follow the provincial guidelines for their rent increases, as another technicality. Do all jurisdictions have such complicated landlord - tenant legislation? probably.
I think that the idea that Europe doesn't have a vibecession is 100% wrong. Maybe we should not use the word vibecession when things are really not going well¹, but people, and young people in particular, are not feeling optimistic, at least any that I meet
In 2025, I heard from people in Lisbon complaining that rents are higher than their salaries, folks in France predicting imminent civil war, Germans telling me that their economy is over, British folks telling me that they are looking to get out of the country as soon as they can, people in the Netherlands complaining about housing being almost impossible to obtain... People get mad at you if you express any optimist wrt the environment.
The word polycrisis is sometimes used to intellectualize this feeling and is used by mainstream media and academics all the time.
¹: it's like the joke that if you have an irrational fear of snakes, you should move to Australia. You'll still be afraid of snakes, but now that is a rational fear.
I feel like the perspective here can only come from people that are not only comfortable now, but have never had the serious prospect of becoming truly destitute appear before them like the ghost of Christmas future.
The vibes are vibes, but the vibes are also real. I know the feeling of "I'm eating well now, but I am a layoff and a recession away from going back to the days where it was sleep for dinner and grit for breakfast".
Thankfully I'm pretty sure I'm safe from the worst, but I also remember rebuilding distributor caps in my childhood to add some slack to the household budget; and the times feel more like that then the do milk and honey.
My take, for what it's worth:
1. We often compare ourselves to our parents. If we aren't meeting the same milestones at approximately the same ages, it impacts our vibes. At minimum we are having kids later in life, but I suspect other milestones are also delayed.
2. We don't often compare ourselves to people from previous generations who never had kids, but those people are included in a lot of the statistics. We want to assume we'll do as well as our parents, but some people inevitably don't.
3. I agree that lower friction has caused people to experience more rejection in job applications and dating. I would add that approximately nothing in my life was as soul-crushing as this was.
4. The government lost a lot of credibility during Covid. Other institutions as well. This is the reason I extrapolate from "things are shitty" to "things will continue to be shitty until I die".
5. I agree that social media algorithms notice when you start gravitating towards a negative worldview, and begin feeding you content that reinforces your negative worldview.
6. Maybe the economy is bad, or maybe something caused an entire generation to falsely believe the economy is bad. Either way, seems bad.
I think the rise in visible homelessness is huge part of the vibes. My town, and its not a large or unique one, went from essentially no visible homeless people to people routinely camping in the town square and several parks. Cities that started out with homelessness saw an equally dramatic increase, large encampments, that sort of thing.
People always point to disjuncts between personally doing well and judgements of the economy as evidence of irrationality/propaganda, but anyone living in my town could say "well I'm doing fine, but every time I go to the park or downtown I see bums and it never used to be like that so seems like something's wrong with the economy" and while you can of course critique that take it's not exactly crazy or brainwashed
I wanted to add some quick insights on rent control in Germany; it mainly consists of two elements. Both are based on an "average local rent per sqm." This attempts to take quality and amenities into account, but its obviously difficult.
The first element simply establishes this local average as the maximum for increases (and limits the percentage increase up to that point). Obviously, canceling contracts and evicting people is also heavily restricted so landlords are stuck with the contracts they have. The local rents rise slowly as the "below average" rents rise and push up the average. The second element prohibits new contracts from going more than 10% over that local rent. So landlords dont benefit much from ending a rental agreement and starting a new one.
At this point, the free markets advocates intervened in politics and warned that capping rents like that obviously disincentivizes new construction. And so any new construction (after 2014) is allowed to have any starting rent they like, and is only subject to limits to the later increases. This creates a massive disadvantage for people moving into a new area, or young people upgrading to a larger apartment for starting a family. It also incentivizes older people to stay in large apartments when their kids move out, further straining the housing market.
You can check this out in the legal texts if you are so inclined:
Limit to local average and limited percentage increases: https://www.gesetze-im-internet.de/bgb/__558.html
New contract limit to 10% above average: https://www.gesetze-im-internet.de/bgb/__556d.html
Exemption for housing built after 2014: https://www.gesetze-im-internet.de/bgb/__556f.html
This website is a bit shit, you can navigate the laws using the inconspicuous "zurück" and "weiter" buttons at the top or look at one massive text on one page: https://www.gesetze-im-internet.de/bgb/BJNR001950896.html#BJNR001950896BJNG027500360
I really don't think you should update on China. The youth unemployment rate has been like 15-25% depending on the year/source in the past 5 years: https://tradingeconomics.com/china/youth-unemployment-rate
This is a perfectly good reason for the youth to think the world is imploding.
(note that sources differ, but no matter what source you look at, it's REALLY BAD)
Theory: the vibecession is mostly about certaintly/confidence in the future, rather than the amount of stuff people can buy now. Worrying about how well-off you'll be X months/years from now is nothing new, but the Covid pandemic, and governments' response of shutting down entire countries for indefinite periods with very little warning, has made everything seem much more precarious. And of course, uncertainty is generally very bad for economic confidence, so it makes sense that people who are still traumatised by the pandemic experience will feel like the economy is teetering on the edge of collapse. This would explain why the vibecession seems to have started around 2020, i.e., the year Covid struck, and also why China is having a vibecession of its own, because the Chinese government was very strict about enforcing lockdowns.
We forget the uncertainty and doom of the past because we know the past turned out okay. I think this is what drives a lot of nostalgia.
If I could go back to when I was 22 then I could relax and enjoy life, knowing that everything was going to turn out okay. But I wasted my 22ness worrying needlessly about the future.
>We forget the uncertainty and doom of the past because we know the past turned out okay. I think this is what drives a lot of nostalgia.
To a degree, yes, although I think there are ways -- the rise of the gig economy, AI, Covid and its aftereffects -- in which the contemporary world is genuinely more uncertain than it was in, say, the early 2000s.
Seems like a lot of this is related to a perception of decreasing agency over one’s own life.
Oswald Spengler’s massive _Decline of the West_ (~1920) covers this.
The book has essentially two elements. One is a Hegelian woo theory of how civilizations change over time. This can probably be disregarded. The second is a claim of the *pattern* of civilizations change over time, and this one is uncanny in the extent to which it seems to be picking out real patterns, including the Western pattern (already present in his time, probably delayed 50 years or so by the drama of WW2, now back on schedule).
Point is, vibecesssion is massively overdetermined. The society/culture is stuck, in a nihilistic death spiral, and we all can see it. Of COURSE people are bummed out by this, regardless of economic indicators. The very refusal of our elites and chattering classes to even admit this only makes things worse.
Spengler is probably not a great map for the future because tech (especially AI, but also war tech) is unlike anything before. But he does seem a pretty great map of the past. I don’t know how we fix this (or could even have avoided it) but it’s obvious that the elements he highlights (for example the development of an elite mono-culture centered in a few “world-cities, in our case LA/NY/DC/SF) are a large part of the problem. The problem kicked in round the late 19th C (eg Nietzsche, or French birth rates), and any diagnosis that refuses to grapple with this is just not serious.
Another way to see the same thing is to look at the prevalence of YA fiction dystopias. These, once again, seem to understand the problem (Hunger Games, for example is all about the way the world-city feeds on flyover country, something the movie-makers apparently can’t quite see…)
We're talking about economic stability, and people not starving one year and starving the next is great instability.
Condo law is a fairly new thing in the US! The first condo in the CONUS was only built in 1960. (IANAL, this is all from Wikipedia articles.)
The way you can legally set up multiple units on top of one another are:
1) One owner controls the whole building and rents to tenant(s).
2) Special case of the previous: NYC-style housing cooperative, moderately popular in the early 20th century. A bunch of people are shareholders of the corporation which owns the building. Since it would be silly to pay rent and immediately get it back as dividend, on paper they set the rent to zero. A teeny tiny drawback of the setup is that your neighbors are now your business partners; since the corporation as a whole took out the mortgage to buy the building (you individually own a share, not real estate), if any member becomes unwilling or unable to pay their share, the others have to pick up the tab, or else the corporation as a whole falls into arrears and the bank can foreclose on the whole building. This is to my understanding the primary reason coops are so famously picky about who they allow to be a member.
3) Flying freehold. Ye olde law insists on ownership being quite absolute; notably it includes a god-given right for me to demolish my stuff. However, if Mr. W. E. Coyote owns the upstairs flat, and I demolish my apartment (which I own), his will fall down. It is also an unhappy situation where, for very necessary works, he needs to erect scaffolding on my land, which theoretically I could refuse, or demand a fee for. Unsurprisingly, people didn't want to create these kinds of arrangements on a massive scale.
4) A routinely applied ad-hoc fix of the above is to make both (equal) ownerships simultaneously landlord and tenant of each other. Still not quite what one would want.
5) Condominium. It fixes the (legal) problems around building, financing, and maintaining the building. Unfortunately, I understand that if you ever want to ever demolish a condo (say, because you want to build something else in its place), or otherwise change the legal form of it, you might regard the setup as a toxic waste factory. This is because if there are hundreds of individually owned flats, then it is very likely that at any one time:
- one's owner has recently died, and the right to consent to the deal is grinding its due course through the legal process;
- one's owner suffers from elderly feeblemindedness and can't quite understand what it is that is offered for him to sign;
- one has been banished from the Yyphrostikoth Meta-Republic for acting as the self-appointed Representative for Vetocracy, who will simply not agree to anything;
- one's owner has died a fair time ago, but the title to his apartment was inherited in equal share by his three children, who are not on speaking terms with each other, and one of whom has been last heard from years ago.
(This was inspired by a non-US case that I found myself in. It turned out, shortly after my family bought a flat in a condo, that the whole building complex had been legally registered as one condo, but from day one the inhabitants treated the two buildings as if they were two separate condos -- holding separate meetings, electing separate officers, keeping separate accounts at different banks. This is technically illegal, and until it's fixed, the condo couldn't get the state subsidy for insulation retrofitting. Obviously somebody suggested that the thing be legally re-founded as two separate condos, but the lawyer nicely gave the above explanation for why this is impractical. Caveat lector, the law be more accommodating to buyout-and-demolition, and/or might differ between the US and where this story happened. Again, IANAL.)
> Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?
Not if there is a real risk of their rental property sitting empty. My landlord charges below market rent but also I suspect he'd be reluctant to raise mine, given that I pay consistently. He'd have to raise rent by ~10% to, over a year, make back the cost of a single missed month at the current price.
That doesn't account for the chance that a new tenant doesn't pay, or doesn't pay consistently; a 2023 post suggests that over 10% of renters are behind on rent - https://www.ppic.org/blog/many-california-renters-remain-financially-stressed/ - suggests that over 10% of tenants are behind on rent. If it's that common, I imagine the time cost of screening a new tenant (in addition to the missed week-to-month of rent, the time cost of showing the apartment, etc) could be a strong incentive against raising rents on existing renters.
> why is renting so associated with apartments (eg your child can’t have a yard), and buying so associated with houses? I’m not denying this is true, I just can’t fully trace the economic logic that causes it.
I think it's because renting and buying are two different products. When you rent, you're generally seeking a temporary living arrangement that allows you to make enough money to buy a house. You don't care about the neighborhood, you don't want to pay a premium for a yard, you don't want to deal with maintenance. You want a roof you can sleep under while you earn money.
When you buy, you're generally deciding where you want to live for the rest of your life, or at least the foreseeable future. You care about the school system, you want a yard for your eventual kids to play in, you want a neighborhood where a house will be worth more three decades out than it was when you bought it. You want a permanent slice of stability and normalcy to anchor your family.
Jobs are more unstable than they used to be. You used to get a job and probably stick around for years if not decades. Now you're more likely to lose your job, creating uncertainty and also feeling like you need more income as a cushion just in case.
The Baumol effect hasn’t been a constant since the Industrial Revolution! I mean, it’s true that some version of Baumol has been operative at every point in time, but *which* industries are growing in productivity and which are stagnant has changed quite a bit at different points in time. There’s been a rough approximation in which “things that can be done in factories” keep getting cheaper while “things that need someone to do them in person” have not. But lots of things like goods delivery, publishing, climate control, clothes washing, etc have moved back and forth between these categories.
Isn't it rude to say the economy is doing well if you think the person you're speaking to isn't? I attiribute this to the decline in fashion standards. People just don't put any effort into their appearance these days.
I was disappointed that this response didn't include two of my favorite responses from the comments on the original post.
1. That the vibes-reality spread seems to be largely explained by the cost of debt, as studied by Larry Summers and cited by PJL.
2. That Turchin's elite overproduction hypothesis explains this via a difference between reality and expectations, mediated by the way that people answer survey questions about reality.
Maybe you could include a survey question: when did the vibecession begin. Curious to see how much it is affected by age.
Could loans/debt have something to do with it? Do more people have (bigger?) student loans holding them back or something now? How much more common is getting a car loan, and how long do they take to pay off now vs then?
Maybe COVID lockdowns screwed up our collective mental health and it's still screwed up?
As regards sticky rents: I'm a landlord with one rental and it took us 5 years to get around to raising the rent on our tenant and we still only raised it to near the bottom of market rate. She's a *great* tenant and has other options so we were afraid of pushing her out by raising it too much.
If we were renting to somebody new we'd snap to market rate.
So the idea that newcomers to a city are paying more in rent than long-time renters makes a lot of sense to me.
This is absolutely true. Having a good tenant who pays the rent on time, treats the apartment well, doesn’t cause problems, etc. is worth a lot and therefore landlords don’t want to lose them by raising the rent.
Feels weird commenting on a comments post but I do have part of the answer for:
"I’d like to know more about what factors hold rents down for long-time residents. Without rent control laws, wouldn’t landlords raise rents on existing renters each year to keep them equal to the market price?"
My understanding is that a large fraction (most?) landlords prefer to keep good tenants in rather than maximize profit. That keeps cost low for a stable, "good" tenant, but forces unproven new tenants to pay market rate until proven, at which point you get a stable rate protected from increasing market prices. Also because landlords know you can afford whatever rent they charged you to start, they don't want to lower it and take less profit or raise it and risk the tenant leaving.
What I don't know is how this works for large apartment buildings with little tenant-owner relationship that presumably drive most of the market value for new tenants. Maybe that's rent control stuff, maybe they worry enough about vacancies that keeping a tenant in a lower rate is still better than risking an empty unit for 6 months, or maybe they actually just increase rent more than other forms of renting?
on the "which inflation measure to use" question - it's very true that there are a lot of different inflation metrics, the choice matters a lot over the long term, and there's not an easy way to pick which one is 'right'. however one clue is that if you use the most aggressive ones like raw CPI (higher inflation -> lower income growth), they lead to conclusions that don't make sense (no median income growth over 40 years despite the median American consuming a lot more in that time), so they're probably not right https://www.nber.org/papers/w23292
Could it be unusually long streak of low public trust in government is not just a correlation? Or if it is, both share the same cause?
Shift from believing government to be badly managed to government actively trying to make your life worse?
When I was USSR citizen in 86, the mood shifted from “they keeping us safe behind the iron curtain “ to “they are willing to kill us just to keep their own asses safe” - 5 years later no more USSR
Enron scandal killed post 9-11 trust. The subprime mortgage was a scam perpetuated by banks. Bailout of the same banks without any personal accountability to people who stole so much changed conversation to “they are willing to sell us all just to keep their own asses safe” - 5 years later you got Trump, no more USA as we knew it.
Trust in government correlates with optimism.
If you don’t trust the government you don’t believe that future will be better, doesn’t matter what is happening now
"Although there was some shift in the underlying terrain" you mean like when Cambridge Analytica broke into national headlines? lol
Two quick responses:
1) re: China—while China still sees GDP growth it has cooled from the double digit growth of 20 years ago. More to the point, slowing growth has come hand in hand with such shockingly high youth unemployment that the government no longer reports it. I have heard from some political economists that it’s somewhere in the 20-30% range.
2) Re: Stickiness of existing rents. My cousin is a realtor and has told me that because it can take a month or two to fill a rental, the loss rent is often higher than the delta between a a below market rent increase to encourage existing renters to stay and the maximum rent increase the open market could bear. Whereas if they are moving out for non-rent related reasons then you may as well jump your rent up to the market price.
If I were a boomer who left this economic mess to younger generations while enriching myself and staying silent—never advocating for saving or reform—I would be deeply ashamed. Some of this was hindsight, yes, but much was obvious all along. The difference is that half the people who knew better simply cashed in, and there was no incentive to change course. Over the next 10-20 years, as boomers die out, they'll attempt to preserve their legacy, insisting "things aren't so bad," dismissing concerns as mere "vibesession," questioning whether young people's struggles are even real, claiming "things are better than they've ever been." But increasingly, that legacy is one of cashing out and staying silent.