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Illiterate cynics

Gallup recently released the results of a poll they run every election cycle or two. In it, they ask respondents whether they believe their family is better off now than four years ago. Take a look at the results below:

These responses are staggering. This year, a meager 39% of Americans feel better off, while over half feel worse off than they were in 2020.

Do these people have memory loss?

In 2020, unemployment reached its highest point in modern history, we had one of the deadliest pandemics in American history, and the average American’s life expectancy dropped by nearly two whole years. Businesses were shuttered, median household income dropped by nearly $5,000 per year, our cities were burning, and wildfires were blanketing the globe.

Simply put, 2020 was awful.

These respondents’ perceptions of the world are detached from reality. And it makes me wonder what other kinds of memory loss we’re having. Are we really so ignorant of the recent past that we look back on one of the worst years in modern American history as better than today?

Or is there something behind this cynicism toward the present? First, let’s take a look at some numbers on the state of our country today. Then, we’ll try to figure out why everyone’s so pessimistic despite 2024 being a pretty decent year.

America is not crumbling; it’s thriving

After a half-century of relying on foreign imports of oil to fuel our growing economy, the United States headed into 2024 having become energy independent. While we still benefit from the supply of foreign oil to keep prices low, we no longer are fully reliant on foreign powers and cartels like OPEC to meet our energy needs.

The employment rate is also the highest it has been since the start of the 2008 Global Financial Crisis. We’ve not just come back from the pandemic—our economy is more active than it was beforehand.

Inflation has definitely been a concern for many over the past couple of years, and with good reason. Prices of household items increased significantly over the past four years. But the good news is that wages have grown even faster! Americans have even more purchasing power today than they did in 2020.

And while things like groceries have increased in price significantly, the Average American actually has to work less for the food they eat than at almost any other time in American history. To afford a week’s worth of groceries, the average American has to work about three and a half hours, compared to the 4.5 hours they would have had to work in the 1990s.

And it’s not like these benefits have been isolated among certain groups of individuals. Since the end of 2019, the bottom half of Americans have doubled their wealth, while the rest of the middle class saw a 54% increase in wealth.

Millennials have also surpassed previous generations in terms of wealth ownership. Today’s 30-40 year-olds are better off financially than the 30-40 year-olds of previous generations.

This is predominantly because, after decades of decreasing, homeownership rates among young professionals has increased over the last decade. While we like to tell ourselves that it used to be so easy to buy a home compared to today, millennials are beginning to achieve homeownership at similar levels to their parents!

With all of these trends, one would expect to see Americans feel pretty good about our current situation! But for all of the talk there has been over recent years about a “soft landing”, nobody seems to recognize that it already happened.

Finance writer/trader Ben Carlson put it best:

But pessimism remains popular