Don’t be fooled by the whinging, we’re ok

We don’t like carbon taxes and we don’t like boats. Mention population growth and we’re at each other’s throats. We don’t like interest rate rises and we disdain debt. We can’t stomach liars and we never forget. Australians, it seems, are a grumpy bunch these days. And, yet, we have perhaps never had more reasons to be happy.

The drought has broken. Incomes are growing. Unemployment and inflation are low. We survived the global financial crisis in better shape than almost any other developed nation.

In a speech this week, the governor of the Reserve Bank, Glenn Stevens, described how the China boom had delivered the “biggest gift” since the 1850s gold rush.

“Yet it seems we are, at the moment, mostly unhappy,” he said. “Measures of confidence are down and there is an evident sense of caution among households and firms.”

Something has clicked in the minds of households since the global financial crisis. We’ve stopped shopping, for one, prompting retailers such as David Jones to downgrade profits and others such as Just Jeans and Portmans to close doors. Westpac’s regular survey of consumer sentiment shows people are as downbeat about their household finances as they were in the 1990s recession.

Ask any economist the reasons for this faltering confidence and practitioners of the dismal science reel off a list of woes: the US and European debt crises, political fearmongering about a carbon tax, floods, the threat of higher interest rates, falling house prices, looming painful restructuring in industries exposed to a higher Australian dollar.

But just because we don’t feel like going out to buy a fridge this weekend, does that mean we are unhappy?

“No, absolutely not,” says Bob Cummins, a professor of psychology at Deakin University.

Although satisfaction with government is the lowest it has been in decade, and lower than when the Howard government was ejected in 2007, Professor Cummins says this, and confidence in the economy, make up only a small part of our total “mood happiness”.

In fact, according to the Australian Unity Wellbeing Index, Australia’s longest-running survey of wellbeing, of which Professor Cummins is the lead author, we are as happy as we’ve been in the past decade and have been since Kevin Rudd posted us $1000 cheques in late 2008. “That cheered everybody up like you wouldn’t believe.”

Professor Cummins says people as individuals experience macro-economics differently from the way economists often think. The flipside of global financial turmoil is that it reminds us how well we are doing by comparison.

A higher dollar hurts industry but means we can go on holiday. And lower retail sales mean we are building a comforting debt buffer.

The truth, Professor Cummins says, is that some of us just enjoy a good whinge, particularly about politicians. “Some people actually get off on it because it is an opportunity to slag off at people who can’t get back at you.”

We target our scorn at politicians, in particular, because their generally low standing makes this a socially acceptable way of being rude.

And whingers in search of an outlet have a growing array of means to broadcast their discontent: talkback radio, television, Twitter, Facebook and blogs. But the impact this has on happiness is limited, Professor Cummins says, because if people get too upset by the increasingly vicious nature of political debate, they can simply switch off.

“If people find that they’re being personally upset by it, they will cut off from it, turn off the television, because it’s discretionary. You don’t need to be exposed to it.” Indeed, it could be our very prosperity that is driving some of the pettiness of some complaints.

According to a professor of psychology at Murdoch University, Craig McGarty, humans tend to “normalise” to their conditions. “If you’re living in a luxury penthouse and your airconditioning breaks, you become unhappy,” he says.

Ultimately, humans, through their social interaction, tend to lift one another up more than drag one another down.

“People can together arrive at negative states but that’s a relatively rare event. If it was common we’d all exist in a permanently negative state. The general experience, especially if you think of natural disasters and other stresses, is that people strive incredibly successfully together to overcome disaster and respond to negative circumstances.”

Perhaps we’re not such a miserable lot, after all.

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This entry was posted in Behavioural Economics, Employment, Housing, Inflation, Interest Rates, Reserve Bank. Bookmark the permalink.

3 Responses to Don’t be fooled by the whinging, we’re ok

  1. Magpie says:

    I don’t know, Econogirl, you might have a point or two, but the timing was really terrible:

    Italy ‘to default’ but Spain may ‘just’ escape
    http://www.bbc.co.uk/news/business-14396557

    Debt wrangling: Your guide to economic chaos
    http://www.smh.com.au/business/debt-wrangling-your-guide-to-economic-chaos-20110804-1icr9.html

  2. mikey says:

    Let’s face it, we’re a bunch of whingers.
    Lots of people hated the Labor government for avoiding the GFC and talked down the economy relentlessly over the last few years, now that a GFC2 is on our doorstep they are gleefully pre-blaming Labor. It’s like they want a crash just to prove their convictions.

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