We economists could easily make the case that America’s economy is in fine shape. Jobs are being created, unemployment is low, wages are rising faster than inflation, which remains contained, and national output remains ascendant. But while economists express such views, our fellow countrymen and women don’t seem to be buying it.
As reported by The New York Times, nearly twice as many Americans view the nation as being on the wrong track as on the right one. Late last year, many more people saw the economy as getting worse than better. Why is there such a disconnect between economists and a significant fraction of the balance of humanity?
There are many possible factors, but one is the volatility of the economy. People instinctively know that while the economy could be expanding today and employers could be hiring, the world could be rather different tomorrow. In some sense, the economy has become too dynamic for certain people’s tastes.
Rapid change, including in the form of emerging technologies, has shattered job security and has also left many people behind. Economists, by contrast, frequently argue that the economy is still not dynamic enough.