By the numbers, the overall U.S. economy may look good, but down at the street level the view is a lot grimmer and grittier.

The surge in interest rates imposed by the Federal Reserve to slow inflation has closed like an acrid cloud over would-be homeowners, car buyers, growing families, and businesses new and old, large and small. It has meant missing opportunities, settling for less — and waiting and waiting and waiting.

It’s not that the average American is underwater. It’s that many feel that they’re struggling more than they anticipated and feel more constricted. In the American Dream, if you work hard, things are supposed to get better. Fairly or not, that may be a big part of why so many voters have expressed unhappiness with President Biden’s handling of the economy.

The cost of borrowing, whether for mortgages, credit cards or car loans, is the highest in more than two decades. And that is weighing especially hard on people in California, where housing, gas and many other things are more expensive than in most other states.

California’s economy also relies more on interest rate-sensitive sectors such as real estate and high tech, which helps explain why the state has been lagging in job growth and its unemployment rate is the highest in the nation.

Harder to budget

When interest rates rise, savers can earn more on their deposits. But in America’s consumer society, for most people higher rates mean that a lot of things cost a little (or a lot) more. That makes it harder to stretch an individual or family budget. It may mean giving up on the nicer car you had your heart set on, or settling for a smaller house, or a shorter, less glamorous vacation.

And with every uptick in interest rates, which is almost inevitably passed on to customers, some have had to give up on a purchase entirely.

Geovanny Panchame, a creative director at an advertising agency, knows these feelings all too well: He thinks often about what could have been if he and his wife had bought the starter home they were planning for in 2020.

Back then, they had been pre-approved at an interest rate of 3.1% — right around the national average — but were outbid several times. They figured they’d wait a few years to save more money for a nicer place.

Four years later, the couple are still renting an apartment in Culver City — and now they’re expecting their first child.

Pushing to buy a house and get settled before their son is born in December, they recently made an $885,000 offer for a three-bedroom, 1.5-bath home in Inglewood. They plan to put down 10%. At the current average mortgage interest rate of 7%, that would mean a monthly payment of about $5,300 — $1,900 more than if they had an interest rate of 3.1%.

The source of that increase is the Federal Reserve’s power to set basic interest rates, which determines the interest rates for almost everything else in the economy. The Fed’s benchmark rate went up rapidly, from near zero in early 2022 to a generational high of about 5.5%, where it has been for almost a year. The rate has been higher in the past, but after two decades in which it was mostly at rock bottom, most people had gotten used to both very low inflation and low interest rates.

“Clearly, we look back and we probably should have kept going and hopped into something,” Panchame, 39, said. “I’ve been really sacrificing a lot to get to this point to purchase a home and now I just feel like I got here but I didn’t work quick enough because interest rates have gotten the better of me.”

Add property taxes and home insurance, and it’s even more painful for home buyers because those costs have also risen sharply since the COVID-19 pandemic, along with housing prices themselves.

A typical buyer of a mid-tier home in California, priced at about $785,000 in the spring, was looking at a total housing payment of about $5,900 a month. That’s up from $3,250 in March of 2020 and almost $4,600 in March of 2022, when the Fed began raising interest rates, according to the California Legislative Analyst’s Office.

It wasn’t supposed to work like that: Lifting interest rates as fast and as high as the Fed did, in its effort to curb inflation, should have led to falling home prices.

But that didn’t happen, mainly because relatively few homes came on the market. Most existing homeowners had locked in lower mortgage rates before the surge; selling those houses once interest rates took off would have meant paying higher prices and interest rates on other homes, or bloated rents for apartments.

For most homeowners sitting on the low rates of the past, their financial well-being was further supported by low unemployment and incomes that generally remained on par with inflation or grew a little faster. And many had cushions of savings built up in early phases of the pandemic, thanks partly to government support.

All of which has kept the U.S. economy as a whole humming along, blunting the full effects of higher interest rates.

“Consumers are doing their job,” said Claire Li, senior analyst at Moody’s Investors Service, though she added that there are now signs of slower spending, evidenced by consumers cutting back on credit card purchases.

Unlike most home loans, credit card interest rates aren’t fixed. And today the average rate has bounced up to almost 22% from 14.6% in 2021, according to Fed data. That’s starting to squeeze more borrowers, adding to their unease.

Rising credit card debt

In California, the 30-day delinquency rate on credit cards is nearing 5% — something not seen since late 2009 around the end of the Great Recession, according to the California Policy Lab at UC Berkeley.

Lower-income and younger borrowers are more prone to falling behind on credit card, auto and other consumer loan payments than those with higher incomes. And it’s these groups that are feeling the effects of higher interest rates the most.

Christian Shorter, a self-employed tech serviceman who lives in Chino, just bought a used Volkswagen Jetta for $21,000. He put down $3,500 and financed the rest over 69 months at an annual interest rate of 24%. His monthly payment is more than $480, and by the end of the loan he will have paid about $15,000 in interest.

Shorter, 45, said he doesn’t have good credit. He plans to take out a personal loan when interest rates drop and pay off the car debt. “Definitely, definitely, they should lower interest rates,” he said of the Fed.

Between the jump in interest rates and prices of new vehicles, some auto buyers have downgraded to cheaper models. The biggest shift, though, especially in California, has been a move by more buyers to turn to electric vehicles to save on fuel costs, says Joseph Yoon, a consumer analyst at Edmunds, the car research and information firm in Santa Monica.

In May, he said, buyers on average financed about $41,000 on a new vehicle purchase at an interest rate of 7.3% (compared with 4.1% in December 2021). Over 69 months, that translates to a monthly payment of $745.

“For a big part of the population, they’re looking at this car market and saying, ‘I got to wait for something to break,’ like interest rates or dealer incentives,” Yoon said.

For a lot of small-business owners, who drive much of the economy in Los Angeles, they don’t have the luxury of waiting it out. They need funds to survive, or to expand when things are going well.

But many can’t qualify with traditional commercial lenders, and when they can they’re typically looking at interest rates of 9%; that’s more than double what they were before the Fed’s rate hikes, according to surveys by the National Federation of Independent Business.

One result: More and more people in Southern California are looking for help from lenders such as Brea-based Lendistry, one of the nation’s largest minority-led community development financial institutions.

From January to May, applications were up 21% and the dollar volume of loans rose 33% compared with a year earlier, said Everett Sands, Lendistry’s chief executive. Interest rates on his loans range from 7.5% to 14.5%.

“Business owners, they’re resilient, entrepreneurial, scrappy — they’ll figure out a way,” he said, adding that he sees many doing side jobs like driving for Uber or making Instacart deliveries at night.

Even so, Sands said, the higher borrowing costs inevitably mean less money spent on things like investing in new technology and software and bringing on additional staff, as well as delays in owners growing their businesses.

“Some of them lose out in progressing forward.”

Jurni Rayne, 42, started her brunch business, Gritz N Wafflez, as a ghost kitchen in February 2022, preparing food orders for delivery services. She financed that by maxing out her credit cards and getting a merchant cash advance, which is like a payday loan with super high interest rates. Her debts reached $70,000.

“When you put everything on the line, you get desperate,” said Rayne, a Dallas native who moved to Los Angeles a decade ago and has worked as a manager at California Pizza Kitchen and the Cheesecake Factory. “You don’t care about the interest rate, because it’s something like between passion and insanity.”

She has since paid off all the merchant loans. And her business has seen such strong growth that last year Rayne got out of the ghost kitchen and into a small spot in Pico-Union, starting with just three tables. She now has 17 tables and a staff of 14.

This fall she’ll be moving to a bigger location in Koreatown and has her sights on a second restaurant in South Los Angeles. But she frets that she could have expanded sooner if interest rates had been lower and she’d had more access to financing.

Economists call that an opportunity cost. For Rayne, it’s personal.

“Absolutely, lower interest rates would have helped me,” she said.

For many others, the wait for lower rates continues without the balm of intermediate success.

Lynn Miller, 60, began looking to buy a home in Orange County about a year ago, hoping to upgrade from her current 1,600-square-foot apartment.

“It’s not bad, it’s just not mine — the dishwasher is crappy, the washing machine is old,” she said of her rental in Corona del Mar. “I’m obviously not going to invest in these appliances. It’s just different not owning your own home.”

It’s been a discouraging process, she said, especially when she inputs her numbers into the mortgage calculators on Zillow and Realtor.com, which churn out estimates based on current interest rates.

“If you look at those monthly payment numbers, it’s shocking,” Miller, a marketing consultant, said. “It’ll get better, but it’s just not better right now.”

She’s continuing her house search — she’d love to buy a single-family, three-bedroom home with a backyard for a dog — but is holding off for now.

“I’m still waiting because I do think that interest rates are going to go down,” Miller said, although she knows it’s a guessing game. “I could end up waiting a long time.”

The California state Senate on Thursday passed legislation aimed at helping the news industry by imposing a new tax on some of the biggest tech companies in the world.

Senate Bill 1327 would tax Amazon, Meta and Google for the data they collect from users and pump the money from this “data extraction mitigation fee” into news organizations by giving them a tax credit for employing full-time journalists.

“Just as we have funded a movie industry tax credit, with no state involvement in content, the same goes for this journalism tax credit,” Sen. Steve Glazer (D-Orinda) said as he presented the bill on the Senate floor, casting it as a measure to protect democracy and a free press.

Its passage comes the same week lawmakers advanced another bill that seeks to resuscitate the local news business, which has suffered from declining revenue as technology changes the way people consume news. Assembly Bill 886 would require digital platforms to pay news outlets a fee when they sell advertising alongside news content.

Glazer said his bill is meant as a complement to the other measure, adding that he and its author, Assemblymember Buffy Wicks (D-Oakland), plan to work with the companies that could be affected by both bills “in balancing everyone’s interest.”

The legislation passed 27 to 7, with one Republican — Sen. Scott Wilk (R-Santa Clarita) — joining Democrats in support. As a tax increase, it required support from two-thirds of the Senate and now advances to the Assembly.

A Republican who opposed the bill said technology is changing many industries, not just journalism, and that some of the innovations have led to inspiring new ways to consume news, such as through podcasts or nonprofit news outlets.

“These are all new models, and very few people under the age of 50 … even pick up a paper newspaper,” said Sen. Roger Niello (R-Fair Oaks.) “So this is an evolution of the marketplace.”

Opponents of the bill include tech company trade associations Technet, Internet Coalition and Chamber of Progress; the California Chamber of Commerce; and numerous local chambers of commerce.

Supporters include unions representing journalists, a coalition of online and nonprofit news outlets, and the publishers of several small newspapers.

For decades, gun control policy in the U.S. has been virtually untouchable — except through efforts to make America’s gun culture deadlier, raising the toll of innocent victims.

Two recent developments suggest that the ground may finally be shifting toward rationality.

One is an “advisory” from Surgeon General Vivek Murthy identifying firearm violence as a public health crisis — the boldest statement from a government official calling attention to the horrific consequences of the nation’s turn away from common sense gun control.

Murthy’s report is in the finest tradition of public health policy, akin to the 1964 report by Surgeon General Luther Terry that placed the links between smoking and cancer, bronchitis and coronary disease into the public record.

As Murthy himself observes, that initiative placed the U.S. on a course of tobacco regulation that reduced the prevalence of smoking from 42% of adults in 1964 to 11.5% in 2022.

The other is a June 21 Supreme Court decision finding that laws barring domestic abusers from possessing guns are constitutional. The ruling is an indication — albeit slight — that a majority on the court has concluded that earlier decisions that found almost any state and local restrictions violated the 2nd Amendment were far too indulgent.

Let’s take the advisory and ruling in order.

Murthy’s advisory is an extraordinary synopsis of the toll of America’s fascination with firearms and its failure to regulate gun ownership.

He reports that firearms are now the leading cause of death among children and adolescents, having passed motor vehicles in 2019. In 2022, guns killed more than 48,200 Americans through homicides, suicides and accidents, rising by about 16,000 over the previous 10 years.

Murthy’s report notes that guns are used in 55% of all suicide attempts and that their lethality in those cases is unmatched — nearly 90% end in death, higher than any other method.

The report treats mass shootings (defined as those with four or more victims, not counting the shooter) soberly. These account for only about 1% of all firearm deaths, but their impact is far greater due to their “outsized collective trauma on society” and their “strong negative effect on the public’s perception of safety.” One in three adults “say fear prevents them from going to certain places or events.”

Murthy’s report puts the lie to the familiar claim by Republicans and gun rights fanatics that the problem, especially when it comes to mass shooting, is mental health, not firearms.

House Speaker Mike Johnson (R-La.), for instance, told Fox News anchor Sean Hannity in October, after a gunman killed 18 people in Lewiston, Maine: “Mental health, obviously, as in this case, is a big issue, and we have got to seriously address that as a society and as a government.”

Yet Murthy reports that “one’s mental health diagnosis or psychological profile alone is not a strong predictor of perpetrating violence of any type…. Importantly, most people with serious mental illness are not violent against others. In fact, people with serious mental illnesses are more likely to be victims of violence.”

For all their nattering about the need to address mental health, anyway, Republicans have never lifted a finger to promote any programs to do so.

Now to the Supreme Court.

The rate of firearm deaths of childen and adolescents in the U.S. vastly surpassed the rates in other developed countries.

(U.S. Surgeon General)

Rahimi v. United States, which yielded an 8-1 decision on June 21, is the first gun-rights case to come before the court since a 2022 decision known as Bruen, in which Clarence Thomas, writing for a 6-3 majority, essentially found that all modern efforts to regulate firearms are unconstitutional.

Thomas held, in effect, that the only legitimate basis for judging gun laws is historical — weighing the laws against the language of the 2nd Amendment to determine how the amendment was viewed by its drafters in 1789 and how their approach was dictated by the political and social context of that time.

In Bruen, Thomas ridiculed Justice Stephen Breyer’s dissent (with which justices Sonia Sotomayor and Elena Kagan concurred). Breyer had opened his argument with nine pages of statistics about gun ownership and its consequences for health and safety.

“It is hard to see what legitimate purpose can possibly be served” by Breyer’s figures, Thomas sneered. “Why, for example, does the dissent think it is relevant to recount the mass shootings that have occurred in recent years?”

In Rahimi, however, Chief Justice John G. Roberts Jr. asserted that the consequences of unrestricted gun ownership were highly relevant. To be fair, this was easy. The record made clear that Zackey Rahimi, the gun owner at the center of the case, was one vicious specimen indeed. As Roberts laid out in the opening three pages of his majority opinion, Rahimi had beat up his girlfriend (the mother of his child) and fired in her direction or at a bystander as she fled his grasp.

After she got a restraining order against him, he stalked her, threatened a different woman with a gun, was suspected by police of at least five other shootings, fired at motorists in at least two road-rage incidents and fired his gun indiscriminately at least two other times. Police searched his home and found a pistol and a rifle. He was charged under a Texas law that criminalized possessing a gun while under a retraining order due to domestic violence.

Despite all that, the 5th Circuit Court of Appeals overturned Rahimi’s conviction, citing Bruen.

Roberts’ decision in Rahimi is a step toward ratcheting back the Bruen effect, in which almost every gun regulation is suspect. That brings us to the “originalism” principle, which undergirds the court conservatives’ distaste for restrictions on gun rights. As expressed by Thomas in his Bruen opinion, originalism holds that interpreting the constitution must depend on the “public understanding of a legal text in the period after its enactment or ratification.”

As the now-retired Breyer put it in a recent essay, “the originalist, instead of looking to the text and asking what the words mean now, may well ask what they would have meant to an ordinary eighteenth-century person” and applies them to the world of today. (Breyer isn’t a fan of originalism.)

Scholars such as Stanford historian Jack Rakove argue that interpretations of the 2nd Amendment depend more on originalism than any other provisions of the Constitution. Its impact emerged most notably in the Supreme Court’s so-called Heller decision. In that 2008 decision written by Justice Antonin Scalia, a 5-4 majority overturned a Washington, D.C., ordinance largely barring citizens from possessing handguns for self-defense in their own home.

Heller overturned more than the D.C. law — it upended more than 200 years of scholarship about the meaning of the 2nd Amendment’s preamble, which links “the right of the people to keep and bear arms” to the establishment of “a well regulated Militia.”

As Breyer pointed out, historians and linguists had argued (in a friend-of-the-court brief in the Bruen case) that the phrase “bear arms” overwhelmingly referred to “war, soldiering, or other forms of armed action by a group” — not to an individual right. Heller, however, established an individual right to gun ownership for the first time.

Bruen expanded that right to gun ownership outside the home. The ruling deemed unconstitutional a New York law requiring citizens to have a license to carry firearms in public. America’s rising tide of gun violence can fairly be traced to Heller.

Scholars have pointed to numerous problems with originalism. One is that judges are (usually) not historians. They may be utterly at sea when trying to find the apposite historical application to contemporary conditions.

The drafters of the 2nd Amendment, as it happens, were concerned about the public threat of a government’s standing army; historians argue that the amendment was designed to prevent the federal government from interfering with the creation of state militias.

Firearms in the 18th century were “not nearly as threatening or lethal as those available today,” Rakove writes; people in that era were concerned not with threats from “casual strangers, embittered family members, violent youth gangs, freeway snipers, and careless weapons keepers.”

In other words, applying an 18th century mind-set to 21st century conditions is a fool’s errand. “Originalism” only interferes with judges’ responsibility to ponder the real-world impacts of their decision — their option, Rakove says, is to “ransack” the historical record for quotations that can support their preexisting goals.

“Originalism,” says Breyer, “tells judges not to consider the practical consequences of their interpretations.” Its product is the paralysis of federal, state, and local efforts to regulate gun ownership. It’s also responsible for the contraction of individual rights being rolled back almost gleefully by the current Supreme Court majority, notably abortion and other women’s reproductive healthcare rights, as originalists argue that the concept of privacy on which those other rights are based can’t be found in the Constitution.

It’s also proper to note that the public during the time the 2nd Amendment was drafted, enacted and ratified is very different from the public affected by its consequences today. In 1791, among other distinctions, enslaved people were not considered citizens and women could not vote. Who set the terms back then under which today’s Americans must live?

Rahimi won’t solve the mess in gun regulation created by the Heller and Bruen rulings. A multitude of pending cases might strengthen it or undermine it. But at least it’s a step back from the abyss.

Murthy’s advisory gives a similar impression of being a first step on a path that might lead nowhere. He calls for more research on violence prevention strategies and laws preventing children’s access to guns, universal background checks, banning assault weapons and restricting the carrying of loaded firearms in public.

The bottom line, of course, is that America’s gun violence crisis can only be solved by fewer guns. There’s a long road ahead to reaching that goal.