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It’s easy to chide Americans obsessed with a Powerball jackpot that just hit world record territory at $1.6 billion. Yes, the odds of getting hit by lightning are far better than winning the lottery. But the need for financial escapism is understandable.
It has not been a particularly pleasant autumn in terms of financial confidence in America.
While jobs are still plentiful and the Biden administration strikes an optimistic note, there’s a growing sense of serious economic trouble ahead. Recession rumors are inescapable. Interest rates keep going up. Markets are tanking. High inflation means cash in the bank is worth less. Consumer confidence is down. There’s a war and energy crisis in Europe. Fears of COVID variants and a newly announced flu epidemic add to the tension. Heading into the midterms, only 19% of Americans say the economy is on the right track.
With their 401(k) offering little relief, many Americans have turned instead to the Powerball jackpot, which has been growing for months and now stands at $1.6 billion for Saturday night’s drawing. Despite the odds of winning the jackpot being one in 292.2 million, Americans are reading up on how to receive their prize should they win: the cash payment or the annuity option. Worrying about such a delightful problem—absurd though it may be—is itself a form of financial escapism. And, as evidenced by a viral tweet about how to maximize one’s paid vacation days, people are keen on any hopeful get-around in these gloomy times.
Interest in the Powerball jackpot is so high that minor glitches with ticket machines make local news broadcasts, and residents in the five states without Powerball have a serious case of envy.
Winning the jackpot would allow winners to leave their jobs behind and become far less vulnerable to economic forces beyond their control. But barring that, many people are still interested in workplace strategies that can help them gain a little more control over their lives, especially if the widely predicted recession leads to widespread layoffs (watch out, remote workers) and employer’s start to regain the upper hand.
Consider the Twitter user @afashola_, whose Oct. 24 tweet has garnered 35,000 retweets and nearly 200,000 likes. Their strategy centers around taking vacation days right after or before company holidays. If applied correctly, according to the tweet, one could get 46 days off in 2023.
Many commenters pointed out flaws in this strategy, but the unexpected popularity of the tweet suggests employees are longing for more control over their work-life balance.
Americans could use a boost. The middle class has taken a hit in recent months. In mid-October, the average wealth of the middle 40% in America had dropped by 7% since March, according to new data made available by Bloomberg and produced by University of California, Berkeley economists. That kind of decline in wealth—estimated to be around $27,000— hasn’t been seen since the 2008 global financial crisis.
What’s more, activities that might have provided a sense of financial escape in the 2010s have proven less trustworthy of late. Think of the crypto bro or meme stock retail trader whose big profits have turned into steep losses.
And, not surprisingly, U.S. consumer confidence fell in the October reading of the Conference Board Consumer Confidence Index. The Present Situation Index (based on consumers’ assessment of current business and labor market conditions) declined sharply to 138.9 from 150.2. The Expectations Index (based on consumers’ short-term outlook for income, business, and labor market conditions) declined to 78.1 from 79.5.
“The Present Situation Index fell sharply, suggesting economic growth slowed to start Q4. Consumers’ expectations regarding the short-term outlook remained dismal. The Expectations Index is still lingering below a reading of 80—a level associated with recession—suggesting recession risks appear to be rising,” said Lynn Franco, senior director of economic indicators at the Conference Board, in a statement.
Only 17.5% of consumers said business conditions were “good,” down from 20.7%, and 24% said they were “bad,” up from 20.9%. And looking ahead, 23.3% expect business conditions to worsen six months hence, up from 21.9%.
Perhaps all the doom and gloom helps explain another kind of escapism, nostalgia, which recently took off at McDonald’s, of all places. The fast-food giant, which topped Wall Street’s estimates for its third-quarter despite higher prices, offered adult happy meals designed to resemble ones from decades past, with quasi-psychedelic reimagined versions of mascots like Hamburglar and Grimace. Demand was so strong that McDonald’s workers in online forums begged customers to stop ordering the meals, which were in short supply.
The idea, to evoke childhood memories among older customers, worked like a charm. With many top economists and CEOs preparing for difficult recession, longing for simpler times, like strategizing for an unlikely jackpot, can be hard to resist.
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