Tuesday, June 19, 2007

This great economy can't catch a break with the public

As Donald Luskin notes:
The unemployment rate is an ultra-low 4.5%, and an all-time record 137 million Americans have jobs, producing an all-time record $13.6 trillion in annual gross domestic product, which includes all-time records for both manufacturing and exports.
Yet the American people aren't feeling so good about the good economy. They must have high expectations. Is it related to gas prices? I think so; gas prices have a psychological effect that are more entrenched that employment. It's not an entirely rational view but people read into high prices as a negative.
NEW YORK A new Gallup Poll will only reinforce those who claim that while the rich get richer most Americans don't feel they are sharing in the growth in our economy. The stock market may be climbing and the unemployment remains relatively low, but 7 in 10 Americans believe the economy is getting worse -- the most negative reading in nearly six years.

Only one in three Americans rate the economy today as either excellent or good, while the percentage saying the economy is getting better fell from 28% to 23% in one month.

Gallup adds: "For the first time this year, a majority of Americans are negative about the employment market, saying it is a bad time to find a quality job."

The 70% negative rating is up 10 points since April. Also, just in the past month, there has been a significant five-point drop, from 28% to 23%, in the percentage saying conditions are getting better.

"When asked about the most pressing financial problems their family faces today, Americans mention healthcare costs, lack of money or low wages, and oil and gas prices," Gallup reports. "Healthcare costs are mentioned by 16% of Americans while 13% say low wages and 11% say oil and gas prices. These percentages are virtually unchanged from last month."
Stephen Rose at Huffington Post, of all places, has an interesting and surprisingly refreshing take.
This dichotomy between a negative view of the state of the overall economy and the conditions of people in general, versus the positive view of one's personal evaluation of risk and living standards on the other, is repeated regularly across polls and within the same poll.

What should one make of these various answers?

After reviewing various polls with their optimistic and pessimistic answers, Kusnet, Michel, and Teixeira of the Economic Policy Institute in their 2006 book, Talking Past Each Other, articulate the typical left position: "With most people, the intensity, the insecurity, and the arduousness of their economic struggles are woven into the fabric of their lives--and are central to their identity." In essence, they throw out the positive evaluation of about one's own condition as people making up answers because they don't want to face reality.

This seems very wrong to me. Although the polling answers are contradictory, it would appear that people at all but the lowest income levels are mostly satisfied with their current life and the opportunities that their own children have. This is not to say that they don't want more or they don't face a difficult juggling act to determine what to buy and how much to save. But blanket appeals to their insecurities and economic plight have not worked in the past and aren't likely to work in future.

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