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Before the pandemic, a number of variables were statistically significant indicators for consumer sentiment in our model; in particular, the most salient variables appear to be vehicle sales, gas prices, median household income, the federal funds effective rate, personal savings and household expenditures (excluding food and energy).

During the pandemic, the personal savings rate soared. In April 2020, the metric was nearly double its previous high, recorded in May 1975.

All this taken together meant Americans were flush with cash but had nowhere to spend it. So despite the fact that the savings rate went way up, consumers still weren't feeling positively about the economy — contrary to the relationship between these two variables we saw in the decades before the pandemic.

Fast forward to 2024, and the personal savings rate has dropped to one of its lowest levels ever (the only time the savings rate was lower was in the years surrounding the Great Recession)

during and after the pandemic, Americans saw some of the highest rates of inflation the country has had in decades, and in a very short period of time. These sudden spikes naturally shocked many people who had been blissfully enjoying slow, steady price growth their entire adult lives. And it has taken a while for that shock to wear off, even as inflation has cre

the numbers align with our intuitive sense of how consumers process suddenly having their grocery store bill jump, as well as the findings from our model. In simple terms: Even if inflation is getting better, Americans aren't done being ticked off that it was bad to begin with.

surprisingly, our pre-pandemic model didn't find a notable relationship between housing prices and consumer sentiment

However, in our post-pandemic data, when we examined how correlated consumer sentiment was with each indicator we considered, consumer sentiment and median housing prices had the strongest correlation of all****** (a negative one, meaning higher prices were associated with lower consumer sentiment)

during the pandemic, low interest rates, high savings rates and changes in working patterns — namely, many workers' newfound ability to work from home — helped overheat the homebuying market, and buyers ran headlong into an enduring supply shortage. There simply weren't enough houses to buy, which drove up the costs of the ones that were for sale.

That's true even if a family has been able to save enough for a down payment, already a difficult task when rents remain high as well. Fewer people are able to cover their current housing costs while saving enough to make a down payment.

Low-income households are still the most likely to be burdened with high rents, but they're not the only ones affected anymore. High rents have also begun to affect those at middle-income levels as well.

In short, there was already a housing affordability crisis before the pandemic. Now it's worse, locking a wider array of people, at higher and higher income levels, out of the home-buying market

People who are renting but want to buy are stuck. People who live in starter homes and want to move to bigger homes are stuck. The conditions have frustrated a fundamental element of the American dream

In our pre-pandemic model, total vehicle sales had a strong positive relationship with consumer sentiment: If people were buying cars, you could pretty reasonably bet that they felt good about the economy. This feels intuitive — who buys a car if they think the economy

Cox Automotive also tracks vehicle affordability by calculating the estimated number of weeks' worth of median income needed to purchase the average new vehicle, and while that number has improved over the last two years, it remains high compared to pre-pandemic levels. In April, the most recent month with data, it took 37.7 weeks of median income to purchase a car, compared with fewer than 35 weeks at the end of 2019.

"Right before the pandemic, the typical average transaction price was around $38,000 for a new car. By 2023, it was $48,000," Schirmer said. This could all be contributing to the break in the relationship between car sales and sentiment, he noted. Basically, people might be buying cars, but they aren't necessarily happy about it.

Inspired by our model of economic indicators and sentiment from 1987 to 2019, we tried to train a similar linear regression model on the same data from 2021 to 2024 to more directly compare how things changed after the pandemic. While we were able to get a pretty good fit for this post-pandemic model,******* something interesting happened: Not a single variable showed up as a statistically significant predictor of consumer sentiment.

This suggests there's something much more complicated going on behind the scenes: Interactions between these variables are probably driving the prediction, and there's too much noise in this small post-pandemic data set for the model to disentangle i

Changes in the kinds of purchases we've discussed — homes, cars and everyday items like groceries — have fundamentally shifted the way Americans view how affordable their lives are and how they measure their quality of life.

Even though some indicators may be improving, Americans are simply weighing the factors differently than they used to, and that gives folks more than enough reason to have the economic blues.

In Greece, an unlikely economic star since the pandemic, as many as 44% of all jobs are connected to tourism. 

Can Europe’s emerging “museum economy” support sustained wealth creation and the expansive welfare systems Europeans have become accustomed to since the end of World War II? And what happens if the dollar falls and the tourists leave?

Rent and other living expenses are rising in hot spots, making it harder for many locals to make ends meet. A heightened focus on tourism, which turns a quick profit but remains a low-productivity activity, tethers these economies to a highly cyclical industry

It also risks keeping workers and capital from more profitable areas, like tech and high-end manufacturing. 

some economists, residents and politicians are concerned about the boom’s long-term implications.

“It is literally, for Americans right now, the place to go,”

The strong dollar—and a powerful post-Covid recovery—has empowered millions of Americans who would have vacationed in the U.S. before the pandemic. They are now finding they can afford a lavish European holiday.

One reason is the brutal sovereign debt crisis that hit the continent’s south especially hard just over a decade ago. Unable to stimulate demand with public spending or to energize exports by devaluing their currency—the euro, which is shared by 20 states—those countries could only boost their competitiveness by lowering wages.

“Your dollar goes a lot further,” Cross said over coffee in the lobby of her five-star hotel. “You don’t feel you’re scrounging as much.”

Tourism now generates one-fifth of economic output in Lisbon and supports one in four jobs. That boom has reverberated far beyond the capital.

Portugal’s gross domestic product grew nearly 8% between 2019 and 2024, compared with less than 1% for Germany,

The government recorded a rare 1.2% of GDP budget surplus last year, and its debt-to-GDP ratio is expected to fall to 95% this year, the lowest since 2009

Portugal’s population is growing again after years of decline, thanks in part to an influx of migrant workers and to various tax incentives and investor visas that have attracted high-income workers. 

Moedas, Lisbon’s mayor, says there’s room for further growth. For a city that doubles in size to around one million every day, including commuters, only around 35,000 are tourists, he said. “We are very far from a situation of so-called overtourism.”

The trend is part of a global readjustment following the Covid-19 lockdowns. Spending on travel and hospitality worldwide grew roughly seven times faster than the global economy over the past two years, according to Oxford Economics. That pattern is expected to continue for the next decade, though to a lesser degree.

Europe, especially southern Europe, has benefited more than many other regions. Though it is home to just 5% of the world’s population, the European Union received around one-third of all international tourist dollars—more than half a trillion dollars—last year. This is up roughly threefold over two decades, and compares with about $150 billion for the U.S., where tourism has been slower to rebound.

In Portugal, a country of 10 million that juts out into the North Atlantic from Spain, Americans recently surpassed Spaniards as the biggest group of foreign tourists. 

This and a real estate collapse that left hundreds of thousands of workers suddenly available made the region’s tourist industry ultracompetitive, much cheaper than Caribbean beach destinations and on a par with Latin American destinations like Mexico. 

Once an owner of TAP, Neeleman increased the number of direct flights to the U.S. eightfold between 2015 and 2020, adding major hubs such as JFK and Boston Logan, betting that would open up an untapped market. As bookings soared, other U.S. airlines followed. 

“It was actually comical, because I went from knowing no one who had been to Portugal to everyone telling me they were going to Portugal,”

For Gonçalo Hall, a 36-year-old tech worker, the influx of foreign cash that has transformed Lisbon has been overwhelmingly beneficial for the city. When he lived in the capital 15 years ago, he wouldn’t walk in the historic downtown after 8 p.m. It was “full of homeless people, not safe. Lots of empty and abandoned buildings,” he said. 

“The quality of life in Lisbon doesn’t match the prices. Even expats are leaving,” said Hall, who moved to the Atlantic island of Madeira during the pandemic and continues to work remotely.  

The average Portuguese employee earns around €1,000 a month after tax, or around $1,100 a month, and only 2% earn more than €2,000. A one-bedroom apartment in Lisbon can easily cost more than €500,000 to buy, or over €1,200 a month to rent. Rents in nearby cities are also climbing as people leave the capital, squeezed out as lucrative short-term rentals transform the housing market. 

Jessica Ribeiro, a 35-year-old sociologist, pays around €490 a month for an apartment that she shares with her ex-husband in a town close to Lisbon. Neither can afford to leave. Both make a little more than the minimum wage of €820 a month, and soaring rents mean it is impossible to find an apartment in the neighborhood for less than €700, Ribeiro said. 

“The harm that tourism has brought is infinitely bigger than the benefits,” Ribeiro said. “It sends people away from their place of work, making their lives much harder.” 

A frequent complaint from residents and housing advocates is that some of the boom’s biggest winners are American companies, from Airbnb to Uber, which often pay little tax in the places where they do most of their business.

Lisbon is cracking down on Airbnbs and increasing taxes on tourists, doubling the nightly city tax from €2 to €4, which should raise €80 million a year. Airbnb has paid Lisbon and Porto, Portugal’s two biggest cities, more than €63 million after entering into voluntary tax collection agreements with local officials. Moedas said he is considering “a bit more regulation” of the city’s many Ubers, whose drivers he said don’t always respect traffic rules. 

Around nine in 10 Airbnb hosts in Portugal rent their family home and almost half say the extra income helps them afford to stay in their homes, according to a spokesperson for the company. “Guests using our platform account for just 10% of total nights booked in Portugal, and we follow the rules and only allow listings that are registered with local authorities,”

Higher rents are forcing many businesses and cultural and social spaces catering to locals to close, according to Silva. “This is not an economy that is serving the needs of the majority of people,” she said.

Signs of discontent are bubbling up across the region. Tens of thousands of local residents marched in Spain’s Balearic and Canary islands in recent months to protest mass tourism and overcrowding. On Mallorca, activists have put up fake signs at some popular beaches warning in English of the risk of falling rocks or dangerous jellyfish to deter tourists, according to social-media posts.

Serving foreigners is difficult to scale up and is more exposed to economic headwinds. Like the discovery of oil, southern Europe’s new focus on tourism can crowd out higher-value activities by hogging capital and workers, a phenomenon some economists have dubbed the “beach disease.”

“Portugal isn’t an industrialized country. It’s just the playground of the EU,” said Priscila Valadão, a 43-year-old administrative assistant in Lisbon. She makes €905 a month and rents a room from a friend for €250 a month. “The type of jobs being offered…are restricted to a type of activity that really doesn’t enrich the country,”

For Europe’s policymakers, having people open hotels or restaurants is easier than incentivizing them to build up advanced manufacturing, which is capital intensive and takes a long time to pay off, said Marcos Carias, an economist with French insurer Coface. 

“Tourism is the easy way out,” Carias said. “What is the incentive to look for ingenuity and go through the pain of creating new economic value if tourism works as a short-term solution?”

Proponents say tourism attracts capital to poor regions, and can serve as a base to build a more diversified economy. Lisbon’s Moedas said he is trying to leverage the influx of foreign visitors to build up sectors such as culture and technology, including by developing conferences and cultural events. 

“Some extreme left parties basically say we need to reduce tourism,” Moedas said, but that is the wrong approach. “What we have to do is to increase other sectors like innovation, technology…. We should still invest in tourism, but we should go up the ladder.”

While Dias, the hotel owner, is diversifying into nightlife, he refuses to envisage a future where the sector would have to rely heavily on visitors from elsewhere.

More than one-third of highly qualified Portuguese students leave the country after graduating,

Even higher-paid technology workers have started decamping to cheaper places. 

Tiago Araújo, chief executive of tourism tech startup HiJiffy, has held on to his employees but says many of them have been moving out of Lisbon. The trend, which started during Covid, is now being primarily driven by the housing crisis.

In Athens, Mayor Haris Doukas says he is working on extending the tourist season, increasing the average length of stay and promoting specific types of tourism, such as organizing conferences and business meetings, to attract visitors with higher purchasing power. He’s also called for new taxes to help the city accommodate the millions of additional tourists thronging to the ancient capital.

If Americans stop coming to Lisbon, he said, “I don’t think we can charge this kind of [price] because we will have to go to Europeans, and the Europeans, they don’t have money.”

A closer look, however, would have revealed that individual journalists at BNN published lengthy stories as often as multiple times a minute, writing in generic prose familiar to anyone who has tinkered with the A.I. chatbot ChatGPT.

How easily the site and its mistakes entered the ecosystem for legitimate news highlights a growing concern: A.I.-generated content is upending, and often poisoning, the online information supply.

The websites, which seem to operate with little to no human supervision, often have generic names — such as iBusiness Day and Ireland Top News — that are modeled after actual news outlets. They crank out material in more than a dozen languages, much of which is not clearly disclosed as being artificially generated, but could easily be mistaken as being created by human writers.

Now, experts say, A.I. could turbocharge the threat, easily ripping off the work of journalists and enabling error-ridden counterfeits to circulate even more widely — as has already happened with travel guidebooks, celebrity biographies and obituaries.

The result is a machine-powered ouroboros that could squeeze out sustainable, trustworthy journalism. Even though A.I.-generated stories are often poorly constructed, they can still outrank their source material on search engines and social platforms, which often use A.I. to help position content. The artificially elevated stories can then divert advertising spending, which is increasingly assigned by automated auctions without human oversight.

NewsGuard, a company that monitors online misinformation, identified more than 800 websites that use A.I. to produce unreliable news content.

Low-paid freelancers and algorithms have churned out much of the faux-news content, prizing speed and volume over accuracy.

Former employees said they thought they were joining a legitimate news operation; one had mistaken it for BNN Bloomberg, a Canadian business news channel. BNN’s website insisted that “accuracy is nonnegotiable” and that “every piece of information underwent rigorous checks, ensuring our news remains an undeniable source of truth.”

this was not a traditional journalism outlet. While the journalists could occasionally report and write original articles, they were asked to primarily use a generative A.I. tool to compose stories, said Ms. Chakraborty and Hemin Bakir, a journalist based in Iraq who worked for BNN for almost a year. They said they had uploaded articles from other news outlets to the generative A.I. tool to create paraphrased versions for BNN to publish.

Mr. Chahal’s evangelism carried weight with his employees because of his wealth and seemingly impressive track record, they said. Born in India and raised in Northern California, Mr. Chahal made millions in the online advertising business in the early 2000s and wrote a how-to book about his rags-to-riches story that landed him an interview with Oprah Winfrey.

Mr. Chahal told Mr. Bakir to focus on checking stories that had a significant number of readers, such as those republished by MSN.com.Employees did not want their bylines on stories generated purely by A.I., but Mr. Chahal insisted on this. Soon, the tool randomly assigned their names to stories.

This crossed a line for some BNN employees, according to screenshots of WhatsApp conversations reviewed by The Times, in which they told Mr. Chahal that they were receiving complaints about stories they didn’t realize had been published under their names.

According to three journalists who worked at BNN and screenshots of WhatsApp conversations reviewed by The Times, Mr. Chahal regularly directed profanities at employees and called them idiots and morons. When employees said purely A.I.-generated news, such as the Fanning story, should be published under the generic “BNN Newsroom” byline, Mr. Chahal was dismissive.“When I do this, I won’t have a need for any of you,” he wrote on WhatsApp.Mr. Bakir replied to Mr. Chahal that assigning journalists’ bylines to A.I.-generated stories was putting their integrity and careers in “jeopardy.”

This was a strategy that Mr. Chahal favored, according to former BNN employees. He used his news service to exercise grudges, publishing slanted stories about a politician from San Francisco he disliked, Wikipedia after it published a negative entry about BNN Breaking and Elon Musk after accounts belonging to Mr. Chahal, his wife and his companies were suspended o

The increasing popularity of programmatic advertising — which uses algorithms to automatically place ads across the internet — allows A.I.-powered news sites to generate revenue by mass-producing low-quality clickbait content

Experts are nervous about how A.I.-fueled news could overwhelm accurate reporting with a deluge of junk content distorted by machine-powered repetition. A particular worry is that A.I. aggregators could chip away even further at the viability of local journalism, siphoning away its revenue and damaging its credibility by contaminating the information ecosystem.

MAGA has replaced Reaganism as the chief operating system of the Republican Party.

If Democrats hope to win in the near future they have to take the MAGA worldview seriously, and respectfully make the case, especially to working-class voters, for something better.

In a volatile world, MAGA offers people security. It promises secure borders and secure neighborhoods. It offers protection from globalization, from the creative destruction of modern capitalism. It offers protection from an educated class that looks down on you and indoctrinates your children in school. It offers you protection from corporate predators.

the problem with MAGA — and here is where the Democratic opportunity lies — is that it emerges from a mode of consciousness that is very different from the traditional American consciousness.

Americans have a zeal for continual self-improvement, a “need tirelessly to tinker, improve everything and everybody, never leave anything alone.”

“the Spirit of America is best known in Europe by one of its qualities — energy.”

we saw ourselves, as the dynamic nation par excellence. We didn’t have a common past, but we dreamed of a common futur

Americans can’t be secure if the world is in flames. That’s why America has to be active abroad in places like Ukraine, keeping wolves like Vladimir Putin at bay.

Through most of our history, we were not known for our profundity or culture but for living at full throttle.

MAGA, on the other hand, emerges from a scarcity consciousness, a zero-sum mentality: If we let in tons of immigrants they will take all our jobs; if America gets browner, “they” will replace “us.”

MAGA is based on a series of victim stories: The elites are out to screw us. Our allies are freeloading off us. Secular America is oppressing Christian America.

MAGA looks less like an American brand of conservatism and more like a European brand of conservatism. It resembles all those generations of Russian chauvinists who argued that the Russian masses embody all that is good but they are threatened by aliens from the outside

MAGA looks like a kind of right-wing Marxism, which assumes that class struggle is the permanent defining feature of politics.

MAGA is a fortress mentality, but America has traditionally been defined by a pioneering mentality. MAGA offers a strong shell, but not much in the way of wings needed to soar.

If Democrats are to thrive, they need to tap into America’s dynamic cultural roots and show how they can be applied to the 21st century

My favorite definition of dynamism is adapted from the psychologist John Bowlby: All of life is a series of daring explorations from a secure base. If Democrats are to thrive, they need to offer people a vision both of the secure base and of the daring explorations.

The American consciousness has traditionally been an abundance consciousness.

Americans can’t be secure if the border is in chaos. Popular support for continued immigration depends on a sense that the government has things under control.

Americans can’t be secure if a single setback will send people to the depths of crushing poverty. That’s why the social insurance programs that Democrats largely built are so important.

offer people a vision of the daring explorations that await them. That’s where the pessimistic post-Reagan Republicans can’t compete

champion the abundance agenda that people like Derek Thompson and my colleague Ezra Klein have been writing about. We need to build things. Lots of new homes. Supersonic airplanes and high-speed trains.

If Republicans are going to double down on class war rhetoric — elites versus masses — Democrats need to get out of that business

They need to stand up to protectionism, not join the stampede.

Democrats need to throttle back the regulators who have been given such free rein that they’ve stifled innovation.

Democrats need to take on their teachers’ unions and commit to dynamism in the field of education.

tap back into the more traditional American aspiration: We are not sentenced to a permanent class-riven future but can create a fluid, mobile society.

The economist Michael Strain of the American Enterprise Institute has offered a telling psychic critique of MAGA economic thinking: “The economics of grievance is ineffective, counterproductive and corrosive, eroding the foundations of prosperity. Messages matter. Tell people that the system is rigged, and they will aspire to less

Champion personal responsibility, and they will lift their aspirations. Promoting an optimistic vision of economic life can increase risk tolerance, ambition, effort and dynamism.”

t aspiration is not like a brick that just sits there. Aspiration is more like a flame that can be fed or dampened

“The problem is desire. We need to *want* these things. The problem is inertia. We need to want these things more than we want to prevent these things.”