This is a rough attempt at partially explaining why people are so unhappy with Biden’s economy even though all the standard indicators are good or getting better.
Assumptions are that people in general only care about their unhappiness, and that the whole US population is subject to the same prices and unemployment rate.
A= the current population in the US
B= the unemployed
x=the unhappiness of having high prices
y=the unhappiness of being unemployed.
Obviously A is far greater than B, and y is far greater than x. However, it seems that currently,
Ax > By
I.e there are far too many of us exposed to higher prices so that even if the pain of paying higher prices is much less than being unemployed, the product of (a lot of people) and (the relatively minor pain of paying for higher prices daily) is much bigger than (few people) and (the major pain of being unemployed).
This also explains why during COVID-19, people were far more unhappy about minor inconveniences of wearing masks and isolation than a million plus people dying from COVID-19—there’s just too many people involved in the former than the latter.
This is partially encapsulated in the misery index (unemployment rate + inflation rate), but I would argue that the inflation rate should be weighed higher, and Barro’s misery index (which includes the interest rate) may be more applicable in our economy.