So, for a couple of years now, economics

types have debated this idea of the vibe

session, which is a term from Kyla

Scanland. And in one of her recent

newsletters, she had this chart that of

every graph I've shown you guys, this is

the one I have been thinking about the

most. I'm going to give it to to you,

Tracy, to just this is her chart of the

vibe session and how you know it's real.

>> Okay.

>> And

>> Oh, all right.

>> Walk me through what you see here.

>> Okay. So, there's two lines on the

chart. One is real disposable personal

income per capita. So how much people

can spend individually

>> accounting for inflation.

>> Accounting for inflation that spiked in

the years after the pandemic and then it

started to dip and now it's sort of

flatlining. Uh meanwhile we have the

University of Michigan consumer

sentiment which uh is very volatile but

in general had been going up in the

years from let's say 2010 to 2020 and

since 2020 has been on a broadly

downward plunging path with occasionally

tiny tiny bits of recovery but not

really. I mean what I see on the chart

is those two things used to kind of

track each other a bit. Yeah. Right.

They they they orbit around each other

and basically since the pandemic

>> Yeah.

>> There's a chasmic difference has opened

up.

>> This is the latestage capitalism thing,

right?

>> Found it. It's in the show. Yeah.

>> That's right. Eventually, you know, if

you want more and more growth, then it

takes more and more to keep people

satisfied. And I think one of the things

that's happening now is,

you know, it used to be that money was

in some senses shameful in some way. You

know, being too rich was a bad thing.

And if you were a billionaire, you were

expected to give some of your money to

charity or, I don't know, contribute to

the world in some other way. Now, we're

seeing this sort of grifting culture

take over the world. Right? Money is the

point. Even on the religious side of

things, we have prosperity gospel now,

which basically says if you're rich,

it's because God loves you. And so, it's

good to be rich. There's no limit on how

rich people want to get anymore. And I

think that's part of the reason that

we're seeing a broad dissatisfaction.

Let's put it that way. But then, you

know, realistically, I think a lot of

people also are just desperate about

their future. They see house prices.

They see insurance costs um they see,

you know, retirement programs

diminishing and and they think like,

well, the only way for me to get out of

this hole that's been dug for me is to

do something like gamble or bet on a

meme stock or something like that. So I

think you know money itself is becoming

more and more an important part of not

just not just the way our economy

functions and the businesses that get

built but also on on our culture.

>> What is your explanation of the vibe

session?

>> I mean clearly like some co kind of

broke a lot of society but I don't know

I'm like sort of um I'm an it's the

phones guy. Now granted the problem with

my theory with that church specifically

is obviously the smartphone has existed

for long before co but I still think

that like there is to some extent

because the important thing the other

important thing of that chart is like

that there has not been some major

change in affordability. There's not

been some major change in the cost of

living. Yes, there was an inflation

spike. Yes, the cost of living has gone

up. But in such a dramatic way that

could massively explain why people are

so pessimistic. I don't think you'd like

see it on the chart. Real wage growth

has generally been positive and it's

been trending up lately and it looks

more or less along that same trajectory

that was pre-COVID. So I do think like

something is going on that I would say

economists themselves are not equipped

to answer. I think we're in a point in

in the world in which economists only

have some of the answers right now.

all the answers obviously, but I think

there are things going on in the way

people perceive the economy that I would

say logically precede economics and they

have more to do with cultural status or

they have politics or just the amount of

times that people are spent like you

know scrolling their phones alternating

between doomcrolling rage bait or

doomcrolling slop. I think these are

real things and so I sort of put myself

in I definitely put myself in the it's

the phones camp. I think economists have

also historically underestimated the

importance of relative relationships and

relative gains. So, you know, most

economists would look at that chart and

focus on um personal income and say,

well, everyone's been getting better off

on an absolute basis. Everyone is, you

know, doing slightly better than before.

Realists would probably not look at that

that chart, but they'd look at uh the

actual tales of the chart. So like how

much has personal income been going up

for the wealthiest segment of society

versus the poorest society and would say

well what actually matters here is the

relative gains. Even if you are slightly

better off yourself if you see someone

who's doing much much much better than

you you're going to be annoyed and

depressed which is what that consumer

sentiment line says. connect those two

theories, right? Which is to say you

could say what you're talking about is

to some degree uh

>> we might be having very unequal wage

gains. Although I will say that if you

look at median incomes are going up too.

>> This is not just a a a factor of you

know Bill Gates or Sam Alman is getting

all the money and and nobody else is

like you look at down the income

quintiles and it doesn't we have been

seeing gains since the pandemic. On the

other hand, to the extent people are on

their phones all day looking at viral

videos, looking at Instagram,

the comparison dimension of just human

life has really changed.

>> Yeah,

>> there's that famous phrase, comparison

is the thief of joy, which is a phrase

that people have known about forever,

and now we have the ultimate comparison

engine, and no one's happy anymore.

Well, that phrase predicted it all right

there. Right. Well, there's also, isn't

there a line that um a good economy or

wealth is when you have more money than

your brother-in-law, right? That that's

like

>> So, there's the other thing which that

chart does not capture at all, which is

the effect of wealth because this is an

income chart. And so, what we know is

that like it's been incredible times for

people who already have assets. And if

you're lucky to have like the really

special assets, if you had been, you

know, someone in your family had gotten

interested in crypto at some point in

the mid2010s, you didn't work harder

probably than anyone else, but you're

like you happen to be standing on top of

a gold mine, etc. And so there is this

there is this distribution of wealth in

this country that not only is it

unequal, it feels arbitrary in many

respects. Why did that person get crazy

rich such that their bloodline never has

to work again? They're just standing in

the right thing. It feels disconnected

in many ways from the effort or time

that someone put into labor income, you

know,

>> and also this is something that

traditional economics just isn't

prepared to deal with, right?

Traditional economics is all all about

those absolute gains and we're talking

about relative differences. And then I

do you remember I wrote about this in

the OddLots newsletter? Shout out for

the OddLots newsletter. And someone

actually wrote into me saying, "Well, if

the poor owned more assets,

>> if the poor owned more assets, then they

would be in a much better position."

Which I thought, yeah, you know, have

you tried not being poor?

>> Yeah.