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The real reason Americans are disgusted with government

Rick Newman
Senior Columnist
Daily Ticker

If Washington is doing anything right, that’s news to ordinary Americans.

Government approval ratings have hit new all-time lows, according to Gallup, which has been measuring the standing of big institutions since the 1970s. The percentage of Americans saying they have confidence in Congress has dropped to the earthworm level of 7%, the lowest in the history of the poll. The Supreme Court registered its own all-time low of 30%. The presidency, with a confidence rating of 29%, is at the lowest level since Barack Obama took office in 2009, though it was lower in 2007 and 2008, the last two years of George W. Bush’s second term.

Government approval ratings typically drop during recessions, since more people feel worse off and some of them blame the government. Approval ratings usually bounce back during recoveries, as people have less to complain about. That makes the current levels of dissatisfaction unusual, as Lauren Lyster and I discuss in the video above.

The last recession technically ended five years ago, so the government’s reputation ought to be improving. Instead, there’s been a steady decline since 2004. There was one exception -- a surge in approval ratings for the presidency after Obama was first elected in 2008. But that honeymoon has clearly ended.

Political hostility in Washington no doubt explains some of the government’s unpopularity, especially with Congress engaging in objectionable stunts such as shutting down the government last year and threatening to default on the nation’s debt every time the federal borrowing limit needs to be raised. The next time Congress will have to do that is in the spring of 2015.

But the continued decline of government approval ratings, at a time when they ought to be rising, reveals deep dissatisfaction among voters for reasons that may have little to do with government. Median household income, for instance, is still about 6% lower than it was before the recession, after adjusting for inflation, and 7% lower than it was in 2000. The typical family, meanwhile, has lost more than 40% of the wealth it possessed before the recession, largely because home values still haven’t fully recovered all the equity lost during the housing bust. People are hurting and looking for somebody to blame. The government is an easy target.

Washington isn’t solving many problems, but it hasn’t caused all the grief that’s holding people back, either. Globalization is one factor causing stress on the American middle class, as employers spread work around the globe and keep an increasing portion of their profits overseas. The digital revolution has led many companies to replace human workers with computers, robots and other types of machines, leaving fewer opportunities for millions of workers who aren’t necessarily equipped for digitized work.

There are a few things Washington could do to help out -- if only politics weren’t a factor. Congress could pass reforms to simplify the tax code and make it more efficient, which many economists think could reinvigorate a static business climate. There could be more federal support for training programs, infrastructure investment, relocation assistance and other things that might help more workers adapt to a demanding economic environment.

But politics is always a factor in Washington, which is why compromise on vital economic matters is often difficult. And Washington might not come up with the right solutions, anyway. That could leave individuals more reliant upon their own entrepreneurial initiative than in the past, and less reliant upon government to solve problems. If the government is as bad as we seem to think it is, that may be only way forward.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.