(This article was published in the Press Review, the newsletter that the Corriere reserves for its subscribers: to receive it you need to subscribe to Il punto, and you can do so here)
They always told us that it’s all economicsThat All it’s the economy, which everything is illuminated or darkened by the economy. But they never explained the economy to us well. It’s the economy, stupid it is the first American sentence that a European commentator believes he should impart to his readers, to give the idea of having understood everything and even of being able to make them understand everything. The bottom line is that whatever a president does and says, he will win or lose depending on the performance of the economy. An idea so strong in its simplicity that we imported and Europeanized it, without realizing that in the meantime it also became complicated for the matrix, in the place of origin. It doesn’t work well in America anymore either, it doesn’t explain things there anymore either. Not quite, not like we thought.
This is confirmed by the latest major survey, carried out by the Harris company for the Guardian. He says this:
- «55% of Americans believe the economy is contracting and 56% think the United States is experiencing a recessionalthough the broadest measure of the economy, gross domestic product, is growing».
- «49% believe the S&P 500 stock market index is declining for the current year, although the index went up by approximately 24% in 2023 and increased by more than 12% this year».
- «49% believe unemployment is at a 50-year higheven though the unemployment rate was less than 4%, almost at a 50-year low».
- «72% say they believe inflation is rising. In reality, the inflation rate now fluctuates between 3% and 4% per year».
- «58% say the economy is getting worse because of the Biden administration’s mismanagement».
We are therefore at a perception of reality that ends up overturning it. The last recession in America dates back to 2020, at the beginning of the pandemic. Since, the economy has done nothing but grow, unemployment has reached historic lows, wages have increased and consumption is high. But they were the ones who put obstacles in the way of a recovery felt first-hand by ordinary people inflation and the consequent increase in rates by the Federal Reserve (the central bank) to contain prices. Now the country is a far cry from the 40-year peak of 9.1% reached in June 2022: in April linflation fell from 3.5% to 3.4%. But it also remains far from the classic central bank target of 2% and the Fed is keeping rates high.
He created all this an unprecedented short circuit. On the one hand, the basic indicators, starting with the GDP, say that the economy is strong; on the other hand, the majority of Americans, 55%, say that the economy is only getting worse. A “stubborn gap” between actual reality and emotional reality, between data and sensations. To put it in a very American word, between numbers and vibesvibrations, emotional perceptions based on instincts and impulses, the unconscious subjugating the conscious.
From here it was born a brilliant synthesis, one of those crases that English (especially American English) is always inclined to provide to those who chew it like a native. Which in turn is always led by a pragmatic cultural imprint to merge very complex phenomena into words and acronyms, into neologisms that become common language.
In this case, the neologism is vibecession. Just wanting to translate it: vibrorecessiona recession linked precisely to vibrations, a perceived recession that translates into actual behaviorin choices unrelated to the data but closely linked to another actual reality, much more important for everyone: the reality of one’s daily lifeof one’s anxieties, of one’s worries.
The ingenious inventor of this ingenious word is called Kyla Scanlon: it’s a writer, video creator, podcaster, editor, illustrator «and a lot of other words, but more than anything I consider myself an educator and a commentator» he says yes to himself. She is 26 years old and when she started talking about vibecession he was only 24, two years ago, in his newsletter on Substack and then in an article in the New York Times (America has this flaw: there is no adulthood to be an opinion maker, there are not only seventy-year-olds who pontificate but also twenty-year-olds who understand things before them). Scanlon wrote:
«The vibrations of the economy are… strange. This quirk has real effects. A recent study found that the wider vibrations they actually guide people’s actionsand that media narratives about the economy contributed 42% to the decline in consumer sentiment in the second half of 2021».
«Indicators such as GDP are important, but often the root of economic problems lies in expectations. When we think about things like inflation, financial conditions and monetary policy, it’s better to frame them through people. And people are, of course, silly and messy. Too many economists and experts forget what economics actually is a group of people who “populate” and try to make sense of this world».
«When policy focuses more on indicators that may not fully reflect reality, and not on the foolish and disorderly people that politics is supposed to servewe enter dangerous territory».
And here we came to the lexical intuition that encompasses an era:
«There is no recession yet. Right now we find ourselves in a sort of vibecession, a “vibrorecession”a period of decline in expectations that people feel based on real-world concerns and past experiences. Things aren’t going right. And if they don’t improve, we’ll have to worry about more than bad vibes».
We were halfway through 2022: then things “went”, they “improved”. Never vibes of the majority remained negative.
It is clear that to a professional economist, to an academic accustomed to dealing with complex reports, this approach may seem naive, yet Scanlon is not at all. His reasoning, up to the semantic landing that decreed his success, it is firmly established on a rock of studies and is nourished by the sacred texts of economicsonly enriched with imaginative points that bring it further closer to the sentiment of ordinary people, giving it true citizenship within a socio-economic analysis which would otherwise be an abstract cage oscillating between learned “whys” – both interrogative and affirmative – without ever arriving at a concretely human explanation. Here is an example of this clever techno-pop mix:
«Economic indicators are a Jackson Pollock picture of data points and trends. If you think long and hard about all this data, it starts to make sense, but there are many things to interpret. Economists have basic theories about what the economy should do, but a pandemic, war, and supply chain problems have widened the gap between the “reality” of economic data and people’s experiences of that reality. If we are not careful, incorrect assumptions — what John Maynard Keynes called “animal spirits” or what the economist Fischer Black called “noise” — will fill this gap and realize our worst expectations».
So here’s how “silly and disorderly” impulses they can make the leap from a misperception of the economy’s performance to one of its own actual derailment:
«Approximately 70% of GDP is represented by consumer spending, which is largely driven by consumer sentiment. The opinion you, I and everyone else have about the state of the economy determines what and how much we buy».
In the case of America, the susceptibility and self-suggestion of the typical consumer are grafted onto an unprecedented political polarization, with half a country of republican faith (as confirmed by a YouGov poll) which is even more led to a distorted self-perception. For Democrats the opposite tends to be true, but not to the point of overturning the vibe majority.
The perception of the economy is therefore also — very much — a matter of political affiliation. Biden administration insists on gas prices, student debt, writes Ian Bremmer. After that, we go back to the fundamentals: «As long as prices and interest rates remain highmay have trouble shaking voters’ historically low confidence in his ability to do the right thing for the economy». Which calls into question the alleged irrationality of vibes, of vibrations, which are perhaps less disconnected than they appear to the pre-data. And to the prey.
