I’ve got admit that it puzzles me that anybody’s puzzled that the opinion of the American people on the economy is pretty sour:
Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession, according to the latest New York Times/CBS News poll.
Amid rising gas prices, stubborn unemployment and a cacophonous debate in Washington over the federal government’s ability to meet its future obligations, the poll presents stark evidence that the slow, if unsteady, gains in public confidence earlier this year that a recovery was under way are now all but gone.
I have several ways of gauging the state of the economy all totally anecdotal and non-scientific. I ask my customers. I ask my vendors. Last night I asked the owner of the Chinese restaurant where I picked up my carry-out. He said that business was awful—he’d been in business 50 years in that location and he’d never seen things so slow. I told him I was doing what I could.
I look at the For Sale signs and the cars parked in the parking lots at the mall and how many people are in the Ace Hardware. All of these signs and more show that the economy is persistently slow.
Sure, GDP is growing. It will when you increase federal spending at the rate we have over the last several years. It’s not the sort of thing you can base a robust recovery on.
And manufacturing is up. However, the interpretation I put on the mass layoffs at the start of the Great Recession seems to be proving out. Many companies used the downturn in the economy as an opportunity for getting rid of a lot of employees who didn’t add much to the bottom line, they can produce a lot more product without hiring more people, and they aren’t eager to staff up again. That’s certainly good for the companies but it won’t do a great deal to boost retail or reduce unemployment. And forget housing. There is so much unused and/or unsold inventory in both housing stock and commercial building that we won’t need to build anything for years.
However, the things that people buy are more expensive than they were last year at this time and they’re not getting paid a lot more. For most people that’s inflation whether it meets the technical definition or not.
We’ve got an economy in the doldrums, people are still afraid for their jobs, and prices on what ordinary people actually buy are rising. Is it any wonder that people are discouraged?