Pew Research is out with a survey this afternoon that says "46% say they are hearing mostly bad news about the nation's economy." What's the story there? That 54% of people apparently aren't.
It's not, however, as if most people are finding things pretty cheery; most are finding a mix of good and bad news on the economy. This is a big deal because economies are notoriously emotional things. A 9-percent jump in people who say they're hearing mostly bad news probably means most people believe what they're hearing and are likely to make some decisions because of it. That's the kind of thing that starts recessions.
This is one of the challenges facing presidential candidates. They will hammer the Obama administration mercilessly in the coming months, potentially causing consumers to pull back, stuff the nation into a recession, which -- if they're successful with their strategy -- they get to inherit.
The dismal science, indeed.
Maybe the economy needs more people in search of instant gratification. A separate study says if that's the case, young people are the answer. The survey said the more credit card debt and college loans young adults had, the higher their self-esteem and the more they felt in control of their lives.
Until they turn 30, according to the Discover Disco Blog.
Right around that fateful 30th birthday, however, the stress of owing tons and tons of money seemed to kick in. Starting at age 28, the more debt people had, the bigger a hit their self-esteem took. This may be because if you ask an 18-year-old with a credit card how much money they expect to making by the time they reach the distant age of 30, they'll probably put the figure at around a bajillion dollars. By their late 20′s, these folks "may be realizing that they overestimated how much money they were going to earn in their jobs," as Dwyer puts it. "When they took out the loans, they may have thought they would pay off their debts easily, and it is turning out that it is not as easy as they had hoped.".
3rd paragraph is very interesting to consider.
If republicans "win" the battle of public opinion, we loss any progress the economy has made...
And crashing the economy is something they were good at 4 years ago...
I though that whole "animal spirits" thing died when Keynes did.
You have one party that says spend money and raise taxes while ignoring the fundamental problems and another party that says spend less money and take in less taxes while ignoring the fundamental problems. Whoever wins we will get more bad financial news we can try and paint it as "animal spirits" or we could look at the fundamental problems.
We have overspent and been unwilling to pay the current tab let alone what we have run up in the past years. We all know it won't last but neither party will have a platform in 2012 that will be anything stronger than reducing the deficit substantially over 10 years. That might cut it if we get magic 5% annual growth on our GDP but in stagflation that will kick our butts.
You can't have robust growth without credit or consumers, both of which are still missing in action in our last conflagration.
With tens of millions wiped out, and most of the rest recovering from a halving of their net worth, don't hold your breath for a consumer spending boom. Sure, there were a few more in the stores this past Christmas, but most of those were probably shoplifters. Frugality is here to stay.
Corporations have also probably figured out that starving, bankrupt consumers don’t buy much. Perversely, this means that productivity will keep soaring, as will corporate profits, which is how the stock market is able to hold its own.
The housing bubble helped America stay near full employment for a few years. Besides other things such as home ownership and asset inflation, the housing bubble worked as an enormous job creation program. This helped offset the move of manufacturing offshore - you can make TVs or clothes in China, but you can’t build houses for Americans in China. Now that the housing bubble is over, these jobs look like they are gone for good.
So tax cuts, please explain once again how that works to our advantage....