The graph above is from an ABC/Washington Post poll that’s been taken for the last 35 years or more. The detailed results are here. As you can see over the period of the last 12 years optimism about our system has given way to uncertainty about it.
To some degree I think that’s unfair. Today we have more information, more timely information, and more detailed information being dumped on us at a faster rate than ever before and that includes information about business, the economy, and government. The wisdom of Bismarck’s remark that anybody who likes law or sausage should never watch either of them being made and the Scottish proverb Never show a fool a job half done becomes apparent. Even at its very best the working of government is messy and unsatisfying. Very few issues are resolved in an hour or even in a six week story arc with heroes rewarded and villains punished. Some thorny issues are never resolved at all—they can merely be accommodated to.
However, I think that some of the change reflects the increasing detachment from or even indifference of policymakers to the realities that ordinary people experience every day. So, for example, when Ben Bernanke dismisses inflation as a problem and the Federal Reserve in its most recent official statement characterizes the underlying inflation as subdued while most people see the prices of most of the things they buy on a daily basis, e.g. food, gas at the pump, rent or mortgage payments, and utility bills seemingly rising on a daily basis and their wages remaining flat or rising much more slowly. I doubt that most people take much solace in the fact that Dr. Bernanke is technically correct. This conflict produces uncertainty.
When the Obama Administration made the decision to oppose expedited review of the challenges to the Affordable Care Act by the Supreme Court it may have been the right one from a tactical standpoint to defend one of the administration’s keystone accomplishments but, if successful, one of the strategic outcomes will be uncertainty as to whether the ACA will stand or not.
Failure to take a decisive position on the upheavals going on in the Middle East may be prudent but it also produces uncertainty. Strategic ambiguity has its benefits but also its costs.
When will the last American soldier return from Iraq? Unknown. The last American soldier return from Afghanistan? Unknown. Will China become the world’s leading economy? Unknown. The list is endless.
The amazing thing isn’t that uncertainty has supplanted optimism over the last twelve years but that there’s as much optimism (and pessimism) as there is.
Uncertainty has its own costs. When you’re uncertain about the future you’re less likely to take risks. An employee may decide not to take that new job. A consumer may decide not to make that additional purchase. That manager may decide to hold onto cash to see what happens next rather than expanding his business.