Everyone wants an affordable America. Good luck agreeing on what that means

The midterms are next Tuesday, and if you’ve been within 50 feet of a TV, a mailbox or a YouTube pre-roll ad this fall, you already know the theme of the season: affordability.

Nearly three-quarters of Americans think economic conditions are getting worse, and health care and gas prices are leading voters’ list of midterm worries. Younger voters especially seem fed up, and a lot of them are warming to economic populism and socialism in a way that would have been hard to picture a decade ago (I wrote about that shift here).

So we all agree things cost too much and that somebody should do something about it, and as far as I can tell, that’s roughly where the agreement ends.

What do we even mean by “affordability”?

Part of the problem is that “affordability” has become a word that means whatever the person saying it needs it to mean. For one person, it means they can’t cover groceries this week and are one car repair away from going into debt. For another, it means a six-figure salary no longer buys the house, the kids and the general sense of security they were promised it would. They’re dealing with substantially different financial problems, and they’ll both tell a pollster we’re in an affordability crisis.

I suspect a lot of what we’re calling an affordability crisis is really a crisis of agency. There’s a widening gap between economic progress (as economists measure it) and economic progress (as normal people experience it). A lot of that gap comes down to whether people believe their own effort still gets them anywhere.

We’re often told that our financial futures are ultimately (and solely) our responsibility. But more and more of the outcome now depends on things that have very little to do with whether you made good decisions. You can make smart choices within those conditions, but you mostly can’t change the conditions.

So what happens to our money, and our politics, when we stop believing we have much control over our financial futures?

Your economy isn’t my economy

Because this is the thing. Our perceptions of the economy are remarkably subjective, often influenced by where you are in life, how old you are, where you live, what you own (or don’t own), and who you vote for.

Political affiliation is a pretty big filter, especially around the midterms. Many of us treat the economy partly as a scorecard for our team. We trust information from people on our side, we’re quicker to believe bad news when the other party is in charge, and we tend to give our own side the benefit of the doubt. Researchers have found the partisan gap in how Americans feel about the economy is now bigger than the gaps by income, age or education, and it can flip almost overnight when the White House changes hands.

According to a recent Harris poll, nearly everyone believes we’re in a recession right now, including Republicans, even though we are *technically* not in one right now. I’ve written about this more than once, and Politico Magazine wrote a very good piece last week about it: How affordability right now is more of a political crisis than an economy-wide collapse. People are furious about the economy, but they’re also still spending.

This is because, like economic consumer sentiment, affordability is partly relative. We don’t judge our finances against some objective standard of comfort; we judge them against the people around us and against what we think we should be able to afford by now.

Economists have found that people report being less happy when their neighbors earn more, and social media has turned “the neighbors” into every influencer with a kitchen island and a Costco-sized pantry. We also anchor on what things used to cost, which is why some part of your brain still insists a sandwich should be $9. So you can technically have more purchasing power than you did five years ago and still feel poorer, because the life you *thought* you would be able to afford keeps sliding further out of reach.

What people want, I think, is the feeling of progress: that working hard, getting raises and making good decisions will actually move them forward. Inflation messes with that in a sneaky way.

Research by Harvard economist Stefanie Stantcheva found that when people get a raise, they tend to credit their own hard work, but when prices go up, it feels like something being taken from them, and about 80% of people believe prices rise faster than wages.

“People want a progress narrative. They want to feel they have some control over their own destiny, and that the control they have can [be] used to build a better life for themselves and their kids.”

— Betsey Stevenson, University of Michigan (Source: Politico)

That’s why I think affordability has become shorthand for something beyond prices. Under all the noise about eggs and gas, people are asking whether their effort will ever reliably turn into a better life, and right now a lot of them aren’t sure.

The limits of being responsible

There’s an enormous amount of good you can do with your money. But personal finance advice has a habit of overestimating how much control any one person has over their financial situation, because our money decisions aren’t made in a vacuum. They’re made inside a set of rules and subject to external influences behind layers of jargon and legislation.

Macroeconomic forces can have a profound impact on your ability to make money and build wealth. The biggest line items in most people’s lives — housing, health care, childcare, the job itself — are influenced by things that have nothing to do with how disciplined you are. They’re decided in zoning meetings, in Congress and in corporate boardrooms.

We spend years teaching people how to manage money inside the economy and almost no time on how government decisions shape it.

Sure, we know the basics of personal finance, but most of us couldn’t tell you who sets our electricity rates, how our property tax assessment works, what a tariff actually does to the price of a washing machine, how the local zoning board affects our rent, or what a change to Medicaid funding might mean for our family.

A lot of these big, grandiose policies splashed in headlines trickle down and directly affect your money. Trickle-down economics, if you will.

Take the 2017 Tax Cuts and Jobs Act, which slashed the corporate tax rate from 35% to 21%, inherently promised companies would use the savings to raise wages and build new factories. What actually happened, according to a nonpartisan Congressional Research Service analysis, was that wages grew at about the same pace they already had been, while companies spent roughly $1 trillion buying back their own stock in 2018, which mostly rewarded people who already owned shares.

Or take tariffs, which are a tax paid by people. The importer pays at the port, and that cost tends to find its way onto your receipt; the Tax Foundation estimates this year’s tariffs will raise taxes by about $900 per household. Yet most people don’t know what a tariff is and how it impacts them.

Or housing, which is partly a story about interest rates and inflation, and also a story about your neighbors showing up to a community board meeting to oppose a six-story building because it would “change the character of the neighborhood,” which it would, by letting more people live there.

Some of this is just complicated. But a lot of it is opaque by design. Political scientist Suzanne Mettler calls it the submerged state: many government benefits are delivered through tax breaks and private institutions, so people don’t recognize them as public policy at all. The submerged state:

• Widens the K-shape. Benefits like the mortgage interest deduction or 401(k) tax incentives require you to have money to participate in the first place, so the people with the most get the most help.
• Misplaces blame in the welfare debate. Plenty of people who loudly want to end “welfare” are often, in fact, benefitting from it without realizing it.

The great risk shift

Meanwhile, the list of things you’re expected to figure out for yourself has become a full-time job. This is often called the adulting tax, the extraordinary amount of time, attention, and unpaid administrative labor required to be a functional adult.

This is, partially, by design! Yale political scientist Jacob Hacker calls it the great risk shift, and I’d argue it’s one of the most direct causes of the helplessness so many people feel. A few examples:

• Retirement. Your grandparents’ employer likely managed their retirement through a pension. Today, only about 9% of private-sector workers have access to a pension, while around half are in a 401(k)-style plan. This moves the entire burden of saving, investing, and predicting market volatility onto the employee.
• Work. The move towards gig/contract jobs and practices like “just-in-time” scheduling, mean workers are increasingly less stable and are forced to navigate benefits like retirement and health insurance alone.

We have an abundance of choices now, but more choice doesn’t always mean more freedom. Structural safety nets are replaced by a marketplace of complicated financial products (HDHP or PPO? Target-date fund or index fund? Which of these 42 Medicare Advantage plans?), overwhelming people and making it riskier for them to make the wrong choice.

Researchers Pamela Herd and Donald Moynihan call this administrative burden, and it works like a regressive tax. The people with the least time and money are the least able to claim the benefits they’re owed, appeal a denied claim or fight a zoning board.

Not everyone needs to become an amateur economist (unless they want to be!). Most people have jobs and families and would understandably rather spend their limited free time doing literally anything else. But if you don’t understand how these systems touch your money, it’s very hard to know whom (or what) to vote for, and when people keep running into the limits of their own control, it starts to do something to their heads.

What happens when you stop believing your choices matter?

There’s this concept called locus of control, which describes how much you believe the outcomes in your life come from your own actions versus outside forces. Someone with a more internal locus believes their decisions shape what happens to them. Someone with a more external locus believes luck, powerful people, institutions or plain circumstance are doing the driving.

Most of us sit somewhere in the middle, and where we sit moves around. When people watch their effort fail to change the outcome often enough, they slide toward the external end, and if you push far enough you get learned helplessness, where you stop trying even in situations where trying would help.

That’s how you get financial nihilism. Why save for nothing when you could take the trip or buy the bag? Or hypervigilance, where people hoard cash, check their investments constantly, and prepare for an economic collapse that always seems to be days away. Neither seems especially relaxing.

Financial insecurity reads to your brain as a constant, low-grade threat, so your stress response stays switched on and the part of your brain that handles long-term planning gets shoved aside by the part that’s busy scanning for danger. Layer a 24-hour stream of alarming content on top of that, and it’s not hard to understand why so many people feel overwhelmed and stuck.

Everybody wants change. Then what?

A Pew Research Center report published this month found that 61% of Americans believe there’s too much economic inequality in this country, and that the system needs major changes. Among those who want major change, few are confident it can actually happen.

So millions of people believe the system needs a serious overhaul and have almost no faith anyone can pull it off.

This type of environment makes it pretty hard to agree on my solutions, especially when we can’t even agree on what, exactly, is broken, just that something is.

Political identity, personal experience and the media we consume all shape what we think went wrong, and (not surprisingly) which solution sounds best to us. So between our brains, our bank accounts, our life stage and our politics, we’re all walking into the voting booth with a different diagnosis and a different cure in mind, and our feeds are working overtime to reassure each of us that we’re the one who’s right.

So voters throw out whoever’s in charge, the winner inherits a coalition that agreed on being angry and not much else, gridlock follows, everybody gets angrier, and we do it all again in two years.

From what we’ll build to who we’ll blame

The policies that “sell” best are the ones you can fit on a bumper sticker, which is not the same as the ones that work. Every real economic policy comes with tradeoffs, and voters (reasonably!) focus on the piece that directly affects them, which makes an honest conversation about those tradeoffs nearly impossible in a 30-second ad. So campaigns drift toward two easier moves.

The first is the fast, visible fix. For example, President Trump promised $5,000 checks to every adult if Republicans win the midterms, which will cost more than $1 trillion and which 61% of likely voters doubt will ever arrive.

Broad slogans like “tax cuts” and “making homes more affordable,” sound great, but lack any sort of detail and nuance. “Free money” is a much easier sell than the structural stuff that actually determines what housing and health care cost, and that structural stuff makes for a far less satisfying message than promising to make everything cheaper and blaming the other party when it doesn’t happen (like… someone… we know).

The other easy move is blame. Campaigns stop being about what anyone will build and start being about who deserves to be punished (typically immigrants and poor people). Blame can be emotionally satisfying, and in a zero-sum mood, compromising starts to look like surrender, which is terrible news for the boring, imperfect work of actually making things better and great news for anyone willing to stand at a podium and announce, as one candidate did in 2016, “I alone can fix it.” We have, as they say, seen how that goes.

When people stop believing established institutions can meaningfully improve their lives, they get a lot more receptive to anyone promising to blow those institutions up. The less confident we are that ordinary change is possible, the more appealing the most dramatic version of change starts to look.

A functioning economy relies a little bit on shared delusion and collective optimism. We all agree that a piece of paper with George Washington on it can be traded for a burrito, and the whole system works because enough people believe the rules are mostly fair and that showing up and making smart choices leads somewhere.

When enough people stop believing that, they stop building for a future they don’t trust and start voting to burn down whatever’s standing in the present, which is a very understandable impulse and a not sustainable long-term plan.

So, how much control do we actually have?

There’s a 1958 essay called “I, Pencil”, narrated by a pencil, which argues that no single person on Earth knows how to make one from scratch. The economy is that times a trillion, a sprawling thing nobody fully understands (including every candidate promising to fix it), and just like there’s no one definition of affordability, there’s no one definition of a good economy.

Weirdly, I find that sort of freeing. You can’t fix the national economy, and it isn’t productive to carry it around in your head all day as if you could, so regaining some agency probably means moving your attention away from the macro trends you can’t touch and toward the decisions you actually get to make.

Many of these decisions are local. Here in New York, last year’s mayoral race ended up deciding rent for about 2.4 million people when the Rent Guidelines Board, whose members the mayor appoints, voted in June to freeze rents on roughly 1 million stabilized apartments. Whatever you think of the policy, it moved more money in and out of New Yorkers’ pockets this year than probably almost anything Congress did.

Your city council and zoning board decide how much housing gets built near you, which often shapes what your rent looks like in five years. Your county assessor and local officials affect how much property tax you’ll pay, and if schools and other public goods get funded. In a lot of states, elected utility regulators are the ones who approve your electricity rates. School boards decide what your kids’ education costs, and your city decides whether you can realistically live without a car, which is one of the most expensive things most households own.

So what do you actually do?

These are the things I’ve been trying in my own life to get my hands back on the steering wheel. (The full list, with the more tactical stuff, is for paid subscribers below.)

• Keeping political anger out of my financial decisions. It’s easy to slide from “the economy is rigged” to “so why bother saving,” but that conclusion only punishes you and nobody who rigged anything is going to notice. I think of the alternative as aggressive realism, which means admitting the system has real problems while still doing the boring, protective things for myself anyway.
• Auditing my feed. At some point this year my For You page turned into a wall of people explaining that we are cooked (the economy, housing, AI, democracy, pick one), and they rarely had a real suggestion beyond “anyway, good luck.” A feed that keeps you in permanent alarm is great for engagement and terrible for making decisions about your own money.
• Learning my whole ballot, all the way down. Pay attention to your local politics! Be one of the thousand people who vote for the school board and the city council. Before I vote, look up my sample ballot a week ahead and spend 20 minutes each race, especially the ones with the most direct line to my monthly bills.

Ultimately, I think what people want from the economy is relatively simple: some reasonable confidence that the effort they put in today can produce a better life tomorrow. An affordable economy would certainly help, but more broadly, people need a reason to believe that progress is possible, and that they have some meaningful role in creating it.

Before you vote:

• Vote411 from the League of Women Voters lets you see a personalized ballot with candidates’ answers to policy questions.
• Ballotpedia’s sample ballot lookup covers down-ballot races and local measures.
• Vote.gov has registration status, deadlines, and polling place info for every state.
• BallotReady is good for researching local candidates you may not have heard of.

For paid subscribers, my full list of tips on what you can do below.

Economists told CNBC this month that older Americans are more insulated from the current round of inflation because they’re less exposed to the stuff that’s gotten much more expensive, like home prices, mortgage rates and childcare. Pew found that 60% of adults under 30 had trouble affording at least one basic necessity in the past year, compared with 26% of those 65 and older. You can see the gap in how people invest, too: a Nationwide survey found that 40% of investors have already changed their retirement savings or portfolios ahead of the midterms, including 72% of Gen Z investors and just 17% of boomers. (Please, I’m begging you, stay the course. According to Fidelity’s research, the S&P 500 has been higher 12 months after a midterm election 95% of the time since 1938.)

Economists Ulrike Malmendier and Stefan Nagel found that people who live through bad stock markets when they’re young stay more pessimistic and invest less in stocks for decades afterward, even after accounting for income, wealth and other factors.

The University of Michigan’s Surveys of Consumers found that the partisan gap in economic sentiment is bigger than the gaps by income, age or education. In Nationwide’s survey, 84% of Republican investors were worried about a recession in 2024, compared with 67% of Democrats. This year, with a different party in the White House, it’s 89% of Democrats and 68% of Republicans. People trade on it, too: after the 2016 election, researchers found that likely Republicans moved more money into stocks while likely Democrats shifted toward safer assets.