Editore"s Note
Tilting at Windmills

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May 3, 2010

SIGNS OF ECONOMIC OPTIMISM.... The economy has a ways to go before it can be characterized as "strong." For that matter, there's an economic recovery underway, but it's a stretch to call it "robust."

optimism.jpg

But after a brutal Great Recession, the economy is growing again. The monthly job totals finally got their head above water. Income and spending are increasing slowly but steadily. It's not too big a surprise, then, that a new CBS News/New York Times poll shows Americans starting to feel better about the direction of the economy.

The poll shows 41% of Americans believing the economy is improving -- up eight points from last month, and the highest it's been since the start of the recession in late 2007. Just 15% believe it's getting worse, which is a recession-era low.

Similarly, President Obama has seen a bump in those approving of his handling of the economy.

Economic optimism has real-world consequences. If people are feeling better about their economic future, employers might be more inclined to add new workers, consumers might be more likely to make major purchases, etc.

And, of course, there are political considerations. We talked back in February about Karl Rove, the National Review, and others starting to express some anxiety about the economy -- if conditions improved, Republicans might be less able to exploit economic anxieties in this year's midterm elections.

Keep an eye on this dynamic, because it's likely to get more intense. The better the economic conditions, and the more confident the public feels, the more we'll see Republicans feeling antsy. Good news for the country is bad news for their campaign strategy.

Steve Benen 3:45 PM Permalink | Trackbacks | Comments (15)

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Posted by: neill on May 3, 2010 at 3:54 PM | PERMALINK

Let me get this straight, Bush, with the aid of a rubber stamp Republican congress gave us tax cuts for the rich, illegal wars, illegal wiretaps, Katrina, deregulation, incompetence, and economic disaster. Due to their combined efforts "governing," the Republicans were soundly spanked in the last two election cycles.

Now that we have a president who is not a moron, and a democratic controled congress that actually serves as a check on his power, this country wants to put Republicans in the majority in congress.

All the out of work "Real American" steelworkers, miners, oilrig workers, and autoworkers, who vote Republican because they believe they should be able to keep a 50 caliber machine gun under their pillow, tell their woman to stay in the kitchen, and blacks shouldn't get too uppity, will get exactly what they deserve.

Posted by: Winkandanod on May 3, 2010 at 4:08 PM | PERMALINK

"Good news for the country is bad news for their campaign strategy."

It's also bad news for the political climate in this country. If the Republicans get antsy and feel they can't win on the bad economy, look for more outlandish personal attacks. I foresee "Democrat Candidate So-and-So pals around with scary brown immigrant terrorists who come to America for gay marriage"

Posted by: Eeyore on May 3, 2010 at 4:09 PM | PERMALINK

All well in good, but, I suggest you consider factoring in the devastating effects of this Gulf disaster. Will BP build a slew of new ARCO stations in the Gulf States and hire the fisherman as well as others who lose their livelihoods from this mess? How will the ripple effect of the big increase in oil play on this economy?

Posted by: berttheclock on May 3, 2010 at 4:13 PM | PERMALINK

How long before we see this sign at a Tea Party event: "Keep Your Hands Off My Recession Barry!"

Posted by: SaintZak on May 3, 2010 at 4:14 PM | PERMALINK

All well in good, but, I suggest you consider factoring in the devastating effects of this Gulf disaster.

Short term, lots of out of work folks will get jobs cleaning up the mess. Longer term, it could be pretty bad for the communities affected.

Sorta depends on how bad it all gets. But, overall I have a hard time believing that hard times for coastal tourism and fisheries in Louisiana and Alabama will put much of a drag on the national economy.

Posted by: AK Liberal on May 3, 2010 at 4:31 PM | PERMALINK

The economy may improve but it won't really begin generating a lot new jobs anytime soon. I wish it were different but Republicans don't need to worry about their primary campaign issue. Democrats need to put legislation on the table for jobs, even make-work jobs. And when Republicans reflexively and unanimously filibuster this bill, make an issue out that. Because Joe Sixpack doesn't read blogs like this. We're not going to win this debate based on remembering how bad Bush was. We can win a debate about who cares most for the jobless.

Posted by: walt on May 3, 2010 at 4:31 PM | PERMALINK

Do you remember the old fable about telling a lie three times, and it becomes the truth? Well---this is what happens when you tell that lie a couple million time:

It becomes the mother of all lies.

Posted by: S. Waybright on May 3, 2010 at 4:41 PM | PERMALINK

@AK Liberal, there is the concern of rapidly increasing gasoline prices disrupting this recovery. Having seen the effects of both oil embargos in the '70s, I still remember how they changed the economic structure of this country dramatically. But, I, also, recall the Repug spin. First, prices of virtually everything increased from '74 to 75 due to the oil increases. Materials, shipping, the housing industry all jumped. However, in '76 major labor unions played catch up and were able to put through wage increases. The spin story from the RepuGs, especially, in the '80 election was inflation had been caused by a run away Democratic Congress and Union wage increases. The Oil Embargo? Tsk Tsk, merely a trifle. This spin lasted until inflation dropped under Volcker and Reagan. Then, in around '83, the Repugs mentioned, "Oh yeah, and oil has come down".

Posted by: berttheclock on May 3, 2010 at 5:05 PM | PERMALINK

I recognize from the standpoint of elections why it is useful to gauge public perceptions on the economy.

But I'm actually interested to know, is the economy improving, objectively? Feelings do not reality make (okay, at least not for rational people).

Posted by: terraformer on May 3, 2010 at 5:08 PM | PERMALINK

jobs
Posted by: neill

Ultimately neill is right. However, as walt pointed out, we're not going to see any significant improvement in the unemployment numbers for a long, long time. In Florida, the state is predicting we won't see 6 percent (we're above 12 percent now) until 2018 or 2019.

But there is another important factor out there and that is how the economy is perceived, whether people believe it's heading in the right direction. Remember, the unemployed and underemployed make up about 17 percent of the work force, meaning most people do in fact have jobs. the difference between now and say a year ago is that the economy is stabilizing. companies may not be hiring but they aren't firing either. you aren't seeing the mass layoffs you saw back then. If you're among the majority that's got a job you're more likely to feel a little more secure about it and more likely to feel better about the economy. That's the good news if you're a Democrat. Of course the economy ain't out of the woods yet; the housing market remains a sucking chest wound in much of the country and banks aren't lending either. If the economy stalls again (not likely but it could happen), voters are likely to hang it on the guys in power and that be the Dems.

Posted by: mudwall jackson on May 3, 2010 at 5:08 PM | PERMALINK

Sorta depends on how bad it all gets. But, overall I have a hard time believing that hard times for coastal tourism and fisheries in Louisiana and Alabama will put much of a drag on the national economy.

We've already been seeing increasing prices for gas at the pumps. Logically, this spill shouldn't have that big of an effect on prices. But reality wise, we'll be seeing another big bump in gas prices over the next month or so. That will will have a dragging effect on the entire economy.

Also, depending on how you look at it, between 1/4 and 1/3 of ALL seafood in the US comes from the gulf. Ever had shrimp? Unless you live 3 miles from the coast during your local shrimp season, the odds are it came from the gulf. There is already a 10 day ban on fishing the gulf. That will almost certainly be extended. Look for rising seafood prices at local markets within the next week or so.

If the slick reaches the mouth of the Mississippi (which its near certain to do) it will have a major effect on river traffic, which effects the entire midwest and east coast.

Those are the effects we know are near certain at this point. If worst case scenarios come true and the currents carry the oil around Florida and up the east coast well all bets are off at that point.

So yes, the oil spill will have a dragging effect on the US economy. The question is how big of an effect.


Posted by: thorin-1 on May 3, 2010 at 5:09 PM | PERMALINK

S Waybright, @ 16:41,

Every tale has a counter-tale. In this case, the boy who cried wolf. After a while, the lie wears out and has to be replaced by a new, shinier one. We'll have to wait and see how effective the glop is at inventing it.

Posted by: exlibra on May 3, 2010 at 5:09 PM | PERMALINK

contra steve, i'm not so sure republicans will get "antsy." if you click thru to the poll digest you'll find that republican voters overwhelmingly disapprove of the way obama is handling the economy...

Posted by: dj spellchecka on May 3, 2010 at 6:28 PM | PERMALINK

thorin-1 and berttheclock, high gas prices always have a negative effect on the economy, regardless of the cause. However, I would bet on other proximal causes for price increases at the pump.

Regarding seafood, "The nation imports about 84 percent of its seafood, a steadily increasing proportion." That includes shrimp, much of which is farmed in Southeast Asia. If you follow the link, you'll see that the average U.S. consumer eats about 16 lbs of seafood per year. Compare that to other protein sources and you'll see that the loss of Gulf coast fisheries will be an inconveniece at worst for most of the nation.

I'm not saying this won't be bad for the affected communities. On the contrary, it is likely to be catastrophic.

Posted by: AK Liberal on May 3, 2010 at 8:58 PM | PERMALINK




 

 

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