The most interesting debate going on these days is about consumer sentiment. The US economy has outperformed expectations by most metrics. The stock market is booming, real GDP is at potential trend, wages are growing solidly, consumers are spending, etc. And yet consumer sentiment surveys remain very negative. What gives? I think I know what’s going on here. When we look at living standards it’s important to look at how people view “necessities”. For example, in 1900 many items that were considered necessities included clothing, food and shelter. In the year 1900 an American had to spend 80% of their income on just ... (full story)