A New York Times/CBS poll found Americans the most dissatisfied they have been about their country’s direction since 1992. And two things are particularly noteworthy about the survey. First is the unhappiness was as universal as you ever see in a large-scale study, cutting across party, gender, age, and geographic lines. The second is that public sentiment is lagging indicator, worsening as the economy deteriorates and not improving until there are clear signs of recovery. For the collective mood to be this negative when the US is at the beginning of a downturn points to at least a couple of culprits. One is that the public believes that this is no ordinary recession in the making. Second is that the unhappiness is about more than the economy, but also about the US’s fallen standing in the world and the patent, unabashed dishonest of many government and business leaders.
It’s also noteworthy that the respondents saw inadequate regulation as the main cause of America’s economic woes. Yet the powers that be have devoted a great deal more effort to throwing money at the problem than at addressing the root problems.
From the New York Times:
In the poll, 81 percent of respondents said they believed “things have pretty seriously gotten off on the wrong track,” up from 69 percent a year ago and 35 percent in early 2002…..
The poll found that Americans blame government officials for the crisis more than banks or home buyers and other borrowers. Forty percent of respondents said regulators were mostly to blame, while 28 percent named lenders and 14 percent named borrowers.
In assessing possible responses to the mortgage crisis, Americans displayed a populist streak, favoring help for individuals but not for financial institutions. A clear majority said they did not want the government to lend a hand to banks, even if the measures would help limit the depth of a recession.
“What I learned from economics is that the market is not always going to be a happy place,” Sandi Heller, who works at the University of Colorado and is also studying for a master’s degree in business there, said in a follow-up interview. If the government steps in to help out, said Ms. Heller, 43, it could encourage banks to take more foolish risks.
“There are a million and one better ways for the government to spend that money,” she said…..
More than 70 percent said their financial situation was fairly good or very good, a number that has dropped only modestly since 2006.
Yet many say they are merely managing to stay in place, rather than get ahead. This view is consistent with the income statistics of the past five years, which suggest that median household income has still not returned to the inflation-adjusted peak it hit in 1999. Since the Census Bureau began keeping records in the 1960s, there has never been an extended economic expansion that ended without setting a new record for household income…..
Charles Parrish, a 56-year-old retired fireman in Evans, Ga., who now works a maintenance job for the local school system, said he was worried the country was not preparing children for the high-technology economy of the future. Instead, the government passed a stimulus package that simply sends checks to taxpayers and worsens the deficit in the process.
“Who’s going to pay back the money?” Mr. Parrish, an independent, said. “We are. They are giving me money, except I’m going to have to pay interest on it.”
John MacCain out. John Parrish in.
The public negative mood is indeed reactive to present circumstances. If those circumstances are diverse, they are all negative, hence the breadth of discontent.
However, in my view that is not the reason for the scale of discontent noted here—81 %—nor of the comprehensiveness of discontent across demographic and other factions in the US. There are cyclical components to mass public response at work. This is something I’ve studied extensively, and toward which I have a model and theoretical approach that regretibly I can’t capsulize at any appropriate level for a blog post. These behavioral shifts aren’t fundamentally economic in source, but will affect economic trends as well, if secondarily. We’re talking about public moods here to put it crudely, although there is more at work than that.
The skinny: there is a temporal window for the bulk of the US population (not the entirety but the bulk) from July, 07 to Jan, 09 with maximum effect from Jan, 08 to Jun, 08 where wide swings in mood or response of off prior trendlines are possible. These swings could be either up or down from trend. They could precipitate enduring trend deflection points, but more likely much of the underlying mood/perception will move back closer to prior trends. That time frame is _not_ arbitrarily chosen. Nor, however, is it in anyway determined or driven by present events, no matter how negative or positive, but rather by an underlying and very long term mechanism (think centuries, or rather don’t try: it won’t make any sense until I get around to publishing on this).
What I’m saying is that a huge, population-wide bummer is not fundamentally ’caused’ by actual circumstances; rather an underlying potential for a mood swing ‘finds it’s purpose’ which may accentuate that action, in this case to the downside. I don’t doubt that this all sounds terribly vague; my apologies. But much of that negative mood, and especially its comprehensiveness, will split back into fractions by the fall. Some spirits will lift, but given we have real and majorly negative circumstances we will more likely then see finger-pointing and argument regarding ‘who’s to blame’ at a public level rather than only at a blogopolitan level by as at present.
“81% of Americans Say Country Headed the Wrong Way”
Funnier: What are their choices in the up coming elections?
I was at the Gym this morning and heard CNBC’s Squak Box. The “America is about optimism, not pessimism” meme was run full tilt. Also, a backhanded insinuation that this poll, and polls like it, are the inevitable result of a MSM that does nothing but spread negativity. I was struck by two things. First was the way the negativity was also linked to “the left” and the other was that they were saying “this is the free market! It is how it works! we have recessions every once in a while! this is going to be a great opportunity!”
OK. I am losing my job, actually, we are losing our whole company. And that’s a lot of pessimism spreading material for a lot of folks. What am I going to do for work? I am 52. What do you think I have to be optimistic about? In a contracting economy and a tight labor market, who is going to hire me? And what did my loyalty to my company get me? Nothing. I walk away with unemployment benefits. great.
And this is “normal” and how the system “is supposed to work”.
Well it must be working for someone. But I’m thinking it works for a very small percentage of people right now, and works well for them.
But perhaps the rest of us have this sinking feeling that we have been idiots (as opposed to being victims). We are second guessing where we went wrong. And blame ourselves and the times.
Hard to think it’s time to be all “rah rah rah” for the free market system when you are part of the expendable mass of inefficiency the market is evacuating through its asshole.
One interesting point is that 63% believe the government should NOT bail out Bear Sterns, regardless of the consequences.
The public clearly is NOT buying “the sky is falling” arguments being put forth by the participants, and public opinion is in stark contrast to that of the big boys on Wall Street and the Fed.
from swimming freestyle:
Two disappointing and, undoubtedly, related statistics. And stinging indictments of a Bush Administration that is so ideologically bent on deregulation, they’ve given up any stewardship of the American economy. As a consequence, we continue to drift towards an economic downturn European analysts refer to as depression-like while Mr. Bernanke dances nervously in Congressional hearings afraid to say the “R” word and President Bush goes AWOL to a NATO conference. It will require some real Houdini like moves on the part of the Administration and their minions to squirm out of accountability for this gigantic mess.
Democrats need to loudly remind voters the consequences of leaders allowing outdated and disproven ideological considerations to interfere with the business of managing the government and the, now obvious, implications for the American people.
Loudly. Very loudly.
Richard Kline wrote:
“But much of that negative mood, and especially its comprehensiveness, will split back into fractions by the fall.”
If we assume that in an election year, the axiom “It’s the economy, stupid!” still holds true, I’m afraid your conclusion may prove invalid.
Reading the NYT article Yves referred to, I was struck by the following passage:
“Yet many say they are merely managing to stay in place, rather than get ahead. This view is consistent with the income statistics of the past five years, which suggest that median household income has still not returned to the inflation-adjusted peak it hit in 1999. Since the Census Bureau began keeping records in the 1960s, there has never been an extended economic expansion that ended without setting a new record for household income.“
Considering how important the perception of wealth or better said, progression of wealth is to any voter (“Are you better off today…?”) I am not sure that current frameworks explaining/predicting public opinion are fully adequate.
It looks like this time, it IS different. Different enough to expose any “model and theoretical approach” to an outlier of sizeable magnitude.
Time will tell.