this post was submitted on 01 May 2025
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Today I Learned

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I swear I had Econ in college, but I don't remember anyone saying this so succinctly. It's from a weird place too, but this quote hits home. It's like population decline, but for money.

It was a truly baffling thing for an American president to say. And University of Michigan economist Justin Wolfers explained on MSNBC that things could get very bad as Trump’s scheme becomes reality. Wolfers ntoed that the idea of how much you can afford to buy with your income is called “real income.” And if real income falls, that’s called a recession. Wolfers went on to explain that if things decline as badly as Trump’s example, where someone who bought 30 dolls could only afford to buy two dolls, that’s called a depression.

Video from MSNBC: https://www.youtube.com/watch?v=sAZxLm6M_V0

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[–] Dagwood222@lemm.ee 2 points 11 months ago (1 children)

For decades, 'middle class' in America was one income supporting a family of four. In those days, $1 million was considered a vast fortune. Then Reagan got elected. By 1993, when Bush Sr. left office, 'middle class' was two incomes to run the home, and $1 million was what a rich guy spent on a party.

[–] asteriskeverything@lemmy.world 1 points 11 months ago (1 children)

They blame it on women wanting careers and a life outside homemaking.

[–] Dagwood222@lemm.ee 0 points 11 months ago (1 children)

I've heard that one dozens and dozens of times. They claim that "Women's Lib" lowered wages. Ask them to show one time that actual wages were cut and they can't. Doesn't stop them from repeating it.

[–] JasonDJ@lemmy.zip 0 points 11 months ago (1 children)

The angle is supply and demand (of labor).

It's a damn good thing a bunch of boomers died in Vietnam or it probably would've been worse, earlier.

[–] asteriskeverything@lemmy.world 0 points 11 months ago (1 children)

Dude... that war had a draft, that is in poor taste.

[–] JasonDJ@lemmy.zip 0 points 11 months ago (1 children)

I wouldn't be surprised in the least to learn that the draft and the war was a capitalist plot to thin the numbers of boomers.

We didn't have enough schools or colleges for them coming up. Sure as hell wasn't going to be enough work around for them to all find gainful employment.

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[–] hildegarde@lemmy.blahaj.zone 1 points 11 months ago (12 children)

TIL every year with a rent increase is a recession. Whenever housing prices increase faster than income that's a recession. When college tuition goes up faster than incomes that's a recession.

[–] roofuskit@lemmy.world 1 points 11 months ago (1 children)

Yeah, we've been in a recession since the 70s and never stopped.

[–] HubertManne@piefed.social 0 points 11 months ago (1 children)

pretty much. sometimes did not seem so since we racked up debt to offset. At one point it was considered unsustainable for a country to function with debt/gdp over 100%

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[–] djsoren19@lemmy.blahaj.zone 0 points 11 months ago

correct.

It seems like you're really close to figuring out why a massive portion of the United States is willing to vote for anything as long as it's not the status quo.

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[–] ultranaut@lemmy.world 0 points 11 months ago (6 children)

That isn't really the definition though. Real income can fall in a recession but it's not necessarily a recession just because incomes fell. Real income can increase or decrease both during a recession and not during a recession. It's a lot more complicated than "when your income declines there is a recession".

[–] JeremyHuntQW12@lemmy.world 0 points 11 months ago (1 children)

It isn't the definition at all.

Real income is income less inflation.

And a recession is two consecutive quarters of negative GDP growth.

[–] ultranaut@lemmy.world 0 points 11 months ago* (last edited 11 months ago)

EDIT: Sorry, thought I was replying to someone else originally.

There have been recessions with less than two quarters of negative growth, it is not a requirement. The NBER uses a variety of indicators, there can be recessions lasting only a few months.

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[–] ryathal@sh.itjust.works 0 points 11 months ago (1 children)

Economics just redefines terms as needed for the moment. Recession is really a label that can't really be applied until after you're in it anyway.

Inflation has also gotten watered down to be less meaningful once it started being a problem.

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[–] possiblylinux127@lemmy.zip 0 points 11 months ago

Wrong community?

[–] idunnololz@lemmy.world 0 points 11 months ago* (last edited 11 months ago) (2 children)

And what metric is this measured in? Big Macs?

[–] Franklin@lemmy.ca 0 points 11 months ago

Entry level codling job, 3.2 - 4.5 Big Macs/hour 17 years of experience in Java, PHP, Rust, Python, Cobol, C#, C++ and Typescript required

[–] Rednax@lemmy.world 0 points 11 months ago* (last edited 11 months ago)

It is a unitless measure, since you divide income (euro) by price of goods and services (euro).

[–] makyo@lemmy.world 0 points 11 months ago (1 children)

I have had this dream for a while now that the major media networks displayed real income changes next to the Dow and other stock tickers. Just so normal people are reminded of how their money is doing compared to rich people's money.

[–] pelespirit@sh.itjust.works 0 points 11 months ago* (last edited 11 months ago) (3 children)

Do you have the formula for that? I might be up for doing that here on Lemmy locally once a month or so.

[–] ozoned@lemmy.world 0 points 11 months ago (1 children)

holy shit! Both of you! PLEASE DO THIS! That'd be AMAZING!

[–] pelespirit@sh.itjust.works 0 points 11 months ago (2 children)

I'm not much a math person or econ person. Do you have any ideas on what that would like like? The Econ professor in the video said the real income is aka GDP. He was loosely speaking though, so I don't know if that's a one to one. I guess I could put something up and people will tell me how it's wrong? I don't mind that.

[–] ozoned@lemmy.world 0 points 11 months ago (1 children)

lol that's the BEST way to get the RIGHT answer on the internet. Put something up, say it's X and someone will tell you you're wrong and it's Y. Easier than asking how to do X. :-D

[–] pelespirit@sh.itjust.works 0 points 11 months ago

Whelp, here you go. It only does a quarterly GDP or "real income" analysis.

https://sh.itjust.works/post/37116488

[–] shikitohno@lemm.ee 0 points 11 months ago

I, too, am far from being either of those things, but it sounds like you could just track purchasing power to get a rough idea. Perhaps I'm misunderstanding it, but it seems to me that, if inflation or other factors have eaten into your purchasing power and you haven't gotten a corresponding raise to offset it, you can reasonably conclude that the economy is getting worse for you in your personal circumstances.

[–] Eatspancakes84@lemmy.world 0 points 11 months ago (2 children)

There is a variable called Gross National Income (GNI) corrected for inflation which is likely the variable Wolfers refers to. You can report it, but it will not be very different from GDP corrected for inflation which the media writes about all the time. Essentially production =income except for some small nuances.

[–] pelespirit@sh.itjust.works 0 points 11 months ago (3 children)

https://sh.itjust.works/post/37116488

Did you see my first crack at it? I would love your input. I think the "Real GDP" might be not adjusted for inflation? I can't tell.

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