Something’s wrong with the U.S. economy. We all know that. But maybe the real problem is us.
Anybody who follows economic polls is numb by now to the fact that Americans think everything is wrong. The latest reading of the Bloomberg Consumer Comfort Index, for example, is - 34.6, which is a bit worse than the prior reading of -33.9. If you’re wondering why this index is (weirdly) negative, it’s because it nets out the percentage of people who are gloomy about the economy from the percentage who are upbeat. The number was positive in the late 1990s, when there were more optimistic people than pessimistic ones. But it has been negative ever since, except for a brief time during the peak of the housing bubble, in 2005. Gloomy is the new normal.
Same with the Gallup economic confidence index (which dates only to 2008), which rings in at -26 and is negative for the same reason the Bloomberg index is. The best reading ever was -3, in late May of this year, while the worst was -65, in October 2008. single-digit negativity, I guess, represents good times.
We have become a “wrong track” nation, as I explain in the video above, with more people saying America is on the wrong track than the right track every month in recent memory, except for a nanosecond in early 2009 when there was a microburst of optimism about the new president, Barack Obama. That obviously didn’t last. In fact, negativists in that set of polls outnumber positivists by nearly 50 percentage points at the moment, which must be some kind of record in an economy that’s actually growing.
Are things really this bad? The unemployment rate has been drifting down for four years. The pace of layoffs is very low, which provides improved job security for the 137 million Americans who do have jobs. Companies are healthy, banks are lending again, and households have been shedding debt and improving their own balance sheets.
It’s easy to disregard what’s going right and highlight nothing but the challenges we face—which seems to be a lot of people’s preference. But gloom itself may now be a bigger economic problem than any of the traditional ones. There’s no bellyacher index I’m aware of, but if you read between the lines, there does seem to be growing evidence that we believe things are worse than they are—and maybe even want to believe that.
Here’s one example: Obamacare is obviously a hugely divisive issue that contributes to that wrong-track feeling a lot of people have. Consider this, though: Only 19% of American say the law has harmed them in any way, while 9% say it has helped and 69% say it hasn’t affected them at all. That 19% is too high, but it’s a good bet that number will go down and the percentage helped by the law will go up. As the feds work out the kinks, more people enroll and the initial fear factor (along with the partisan attacks) wear off. For something that has generated so much hostility and concern, Obamacare may end up not changing all that much for all that many people.
What’s missing in all of this gloom-mongering is the optimism and initiative we like to associate with America. The antics in Washington clearly depress a lot of people, but what makes it so hard to turn off the TV or the iPad and focus on what real people are doing to get ahead? And just how much revitalization is the government or the business world or some anonymous “they” supposed to provide before people get it in gear?
There are plenty of Americans, needless to say, who haven’t let a weak economy or a few disappointments slow them down. They’re starting companies, doing deals, trying new things and in some cases making a lot of money. But are there enough of them to drag everybody else along? My guess is no. At some point, you either stop complaining and pick yourself up, or people stop hearing your complaints.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
- Banking & Budgeting