Authored by Jeffrey Tucker via The Brownstone Institute,

Just how much mental and psychological trauma exists in the country and world today cannot be quantified, and I would not trust any studies that tried. But this much is clear. We have lost our footing in knowing something that scientists long believed we could know: whether and to what extent an economy is growing and prospering or going the opposite way. 

Everyone seems just to be winging it these days. Ever since lockdowns utterly broke reporting, it’s been hard to tell up from down. 

The substantial hits taken by major financial indexes over the last two months seem to have triggered a shift in public sentiment from indifferent to gloomy. Probably this has nothing to do with the vast wealth held in invested retirement accounts. 

Each refresh of the page seems to deliver more bad news. 

This has in turn affected the willingness to spend and the outlook generally. 

And yet there is something strange going on. 

Inflation in real time is genuinely down from its 4-year trend and showing the best numbers since 2020. Even the CPI reflects this. The jobs outlook for the private sector is slightly improving. 

Why has consumer sentiment suddenly taken a dive? 

It’s odd because there is a paucity of evidence for a sudden shift, unless tariffs are to blame, which seems doubtful (to me). 

One possible theory: the public has a form of economic post-traumatic stress disorder, a clinical name for what was once called battle fatigue and shell shock. It is what happens to the human spirit in the face of something unexpected, terrible, and ultimately traumatizing. There are stages of recovery that move from denial, anger, bargaining, and depression, with acceptance as the last stage. 

That might be where we are. For years now, the national media and government agencies have claimed that all is well. Inflation is cooling. Job growth is strong. The recovery is upon us. Countless media articles have bemoaned the gap that separates real data and maudlin public perceptions. We are encouraged to believe that “shutting down the economy” is really no big deal, just something you do before turning it on again. 

Stop complaining! You are rich! 

It was the ultimate in economic gaslighting, something about which many of us have been kvetching for five years now. 

In 2024, Brownstone Institute commissioned a closer look. The study found that the US had been in a technical recession since 2022 and with no real recovery since 2020. The authors got to this conclusion by looking at industry price data rather than the wild underestimates from the Bureau of Labor Statistics. It set that against a realistic output estimate. They show all their work. No one has ever taken issue with the study. 

This is also the 5th anniversary of the greatest trauma of our lives, the lockdowns that wrecked millions of businesses, shut hospitals and churches, restricted movement, and decimated economic life by force. No one ever thought such a thing was possible. 

It was a trauma for people on the level of wartime. Even now, people are reluctant to talk about it, just like granddad never spoke about his experiences in World War II. 

Here we are today, desperately approaching finding normalcy again. With that has come a wake-up call concerning household finances. Real income is down. Savings are down. Bills are up. Cutbacks are necessary. They have been delayed for years as the mass media trumpeted the glories of the Biden recovery that simply did not exist or was otherwise a debt-fueled hologram. 

Now comes the University of Michigan’s Consumer Sentiment Index. After three years of showing big gains, oddly timed with the Biden presidency, it is now showing a tremendous plunge, oddly timed with the Trump inauguration. What especially makes it odd is that inflation is actually lower now than in four years. The latest numbers show none of that. 

I would offer a chart, but the Institute for Social Research of the University of Michigan withholds making its latest data live for fully one month. You have to pay to get it. This is why no public charting service can give you that data. Hey, they have to make a buck, right? Who can fault them for this?

[ZH: We have the charts… UMich inflation expectations (green) exploded higher (thanks 100% to Democrats) even as inflation (blue) continues to decline. UMich overall sentiment (red) also puked hard thanks almost entirely to respondents who identified as Democrats]

Well, there is a problem, one I never expected. I always thought of the University of Michigan data as likely more reliable than a federal agency. It seems like it comes from the “real” America, a flyover state with actual scientists who are independent. 

It only took a quick look on Grok to discover that the Institute for Social Research and this survey in particular is one of the top recipients of federal funding. 

It comes from the National Institutes of Health, the National Science Foundation, the Social Security Administration, and elsewhere. 

It totals as much as $100 million per year, from your pocket to theirs. They then sell their data – which is drawn from a survey of 1,000 people – to the private sector at a profit. This has been largely unknown and truly, no one really thought to question this glorious and objective data from the best data-mongers we have. 

In the past, it never occurred to me to look at the funding sources for this kind of research. But things are opening up. We now understand the racket. The federal government taxes you, feeds the universities and NGOs, they generate research and propaganda to feed the machine, and the cycle continues. The examples are legion and have resulted in an absolute avalanche of fake science in the last five years. 

We have no direct evidence that the latest Consumer Sentiment data is fake. It might be entirely real, an indication that people are only now waking up from a four-year dream state of denial and confusion – symptomatic of PTSD or shell shock from the trauma of the Covid lockdowns. On the other hand, one does wonder, given that we now know that this ballyhooed research center is actually a federal cutout. 

I was at an airport bar the other day, and a man asked about my awareness bracelet. It says, “I won’t be locked down.” He wondered what that meant. 

Knowing that he was likely still in the denial stage, I explained that five years ago, all our rights were deleted, the economy deliberately crashed, and life was turned inside out based on edicts, pending the release of a new shot that didn’t work but everyone was forced to get anyway. 

I tried not to make a show of this or go on too long, so I just left it there. 

His response: “Yeah that sucked.”

Long pause. 

He followed up: “We haven’t really had a kind of reckoning with all that, have we?”

“Nope,” I responded. 

He went back to his beer and nothing more was said. 

The days before the lockdown were indeed our last innocent moment.