Sad Sack

In Barack Obama’s speech at the convention last week, he presented himself as the nation’s best hope for the amelioration of a dolorous litany of woes. But is this glum tableau an accurate accounting of how most voters see the nation, and their own lives? Apparently not, according to this item in today’s Wall Street Journal.


  1. the one eyed man says

    The American Enterprise Institute is a hard right advocacy group, so the provenance of the report might raise suspicions. More significant is that fact that its survey is completely divergent from the Consumer Confidence Index, which economists use to gauge sentiment. If people feel good about their personal economic situation, they tend to spend money more freely. It is near a record low:

    The author’s chief economic assertion (“the economy is actually growing and unemployment is still lower than it was during much of the Clinton presidency”) is demonstrably false.

    Most economists think we are in a recession, defined as two consecutive quarters of economic shrinkage. Since recessions are officially announced after the fact, it is too soon to know for sure if we are in one. However, the economy — if not contracting or remaining stagnant — at best has anemic growth, which is well below the expansion in population. If you want to use the stock market as a proxy for the economy — as it is investors’ collective evaluation — then it’s useful to note that the popular stock averages are lower than they were at the turn of the century.

    While the unemployment rate is about the same as the Clinton administration – the last I looked, they were within 0.1% – the author uses a misleading statistic. The unemployment rate is the percentage of people actively looking for work compared the universe of workers. It does not include people who stopped looking because they gave up, those who were downsized from full time to part time work, and the chronically unemployed.

    The more useful metric is job creation, which compares how many net new jobs are actually added to the workforce. There were 23 million new jobs under Clinton, and there are about six million new jobs under Bush.

    The metrics which really count for evaluating the economic health of the average American are things like median income, disposable income, net debt, and household balance sheet. On these criteria, things are as bad for the average household as they have been in a very long time.

    Posted September 1, 2008 at 4:53 pm | Permalink
  2. the one eyed man says

    Just saw this item on which offers further refutation of the WSJ piece:

    Posted September 1, 2008 at 5:41 pm | Permalink
  3. Malcolm says

    Well, thanks for the spadework, Peter; you raise worthwhile objections. (I do hope that you consider the output of liberal think tanks to be of as questionable provenance as that of conservative ones.)

    The point of the article, however, was about the attitude of the voters themselves, as expressed in recent polls. Do you dispute those numbers?

    I’d also point out that there was a tremendous flurry of job creation during the dot-com boom of the 90’s; I’m sure many of those positions evaporated when the bubble burst.

    Posted September 1, 2008 at 10:17 pm | Permalink
  4. Charles says

    If I may be allowed to put forth an uninformed opinion about the article…

    Ms. Bowman says that the “relentless negativity of the media” accounts for the gap between the optimism of people concerning their own lives and economic futures (76%) and the lack of optimism concerning the economy of the nation (18%). This may or may not be partly true, but I doubt it can be simplified like this. The poll numbers are about perceptions, and perceptions are not always (some would say “not usually”) grounded in reality. It would seem to me that it might be more of a psychological issue than an economic issue. In other words, people are naturally optimistic about their own lives because human beings need to have some sort of hope to survive. No matter how dire things may look around us, we are convinced that somehow everything will work out for us. Kind of like how most people think that cancer, lightning strikes, and drive-by shootings are things that happen to “other people” and not them.

    The economy of the country, on the other hand, is an abstract concept for most people. It’s probably safe to say that a majority of the population (myself included) doesn’t really understand the intricacies of the nation’s economy. This can be interpreted in a number of ways. Like Ms. Bowman, we could say that we need to rely on the (relentlessly negative) media for our opinions on the economy, and thus we develop warped opinions of how bad things are. On the other hand, we could also say that this disconnect between our perception of the nation’s economy and our own personal economic futures means that it is just as likely that we are being overly optimistic about own own futures because we do not understand the forces that drive the nation’s economy and how we are subject to them.

    Being one of the ignorant masses, though, I couldn’t say which is more likely. I do know that things probably aren’t as simple as people on both sides of the political spectrum would like us to believe, though.

    Posted September 1, 2008 at 10:35 pm | Permalink
  5. I would consider anything published by liberal think tanks to be equally suspect. Advocacy groups exist for a reason, and dispassionate dissemination of the Truth is not one of them.

    Every recent poll — except this one — shows that people are apprehensive and fearful about the economy. It is inconceivable that 80% of Americans think the country is on the wrong track, but simultaneously think the economy is hunky dory. As mentioned above, the Consumer Confidence Index — which is what economists use to judge sentiment — is bouncing along the bottom.

    Living in the epicenter of the dot-com boom and bust, I would certainly agree that people lost their jobs when the industry crashed. I was one of them. However, things bounced back pretty quickly, and the industry is much larger than ever. Also, the dot com biz was a very small part of the economy back in 2000 and 2001, so it had a negligible effect on the overall economy.

    I don’t think the economic malaise is all George Bush’s fault (although I think his tax cuts contributed mightily to the problem). However, the malaise is very real, and the piece in the Journal does nothing to indicate otherwise.

    Posted September 1, 2008 at 10:51 pm | Permalink
  6. As for the people who purportedly think the economy is in the tank but their own personal prospects are OK:

    I don’t think that many of them own a home, or would like to own one. Few of them are auto workers, airline workers, or work in retail. Those who can’t pay their credit card bills, or have their home equity lines reduced by the bank, or who are uninsured probably feel less than sunny about their prospects. Those who live day to day see the price of food and fuel rise to record levels. So anecdotally and intuitively, the argument just doesn’t add up.

    There are ways to phrase survey questions so you get the results you would like to see. My guess is that this survey is one of them.

    Posted September 1, 2008 at 11:03 pm | Permalink
  7. Malcolm says

    Well, Peter, it seems to me that you are venturing rather far from hard data in this last comment, and I am certainly not privy to the details of Ms. Bowman’s analysis. I think we’ll have to let this one go as a case of “we report, you decide”.

    Posted September 3, 2008 at 11:24 pm | Permalink

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