When people talk of the economy being strong, they don't seem to feel that they, too, are better off.
Interpretation
This quote highlights the disconnect between national economic indicators and individual economic well-being.
Daniel Kahneman points out that while discussions about a strong economy may be prevalent, many individuals do not perceive an improvement in their own financial situation. This suggests that economic strength as measured by statistics does not necessarily align with the personal economic experiences of the average person, highlighting a disparity in perception and reality.
In practice
During a lecture on economic indicators, one might quote Kahneman to illustrate the gap between statistics and personal experience.
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
The average investor's return is significantly lower than market indices due primarily to market timing.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
Laziness is built deep into our nature.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.
Long experience, in the United States and in other advanced economies, has demonstrated that monetary policy is most successful when decisions are rendered independent of influence by elected officials.
I attempted to see famines as broad "economic" problems (concentrating on how people can buy food, or otherwise get entitled to it), rather than in terms of the grossly undifferentiated picture of aggregate food supply for the economy as a whole.
As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.
People.. were poor not because they were stupid or lazy. They worked all day long, doing complex physical tasks. They were poor because the financial institution in the country did not help them widen their economic base.
If bankers become overly conservative in response to past lending mistakes - or if examiners force such behavior - it will hurt bankers' own long-term interests and the economy in general.
The culture of self-gratification and deregulation that began during the Clinton years and continued under President George W. Bush led to the bursting of one stock market bubble at the turn of the century and a full-scale financial crash less than a decade later.
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