Paul Krugman has appeared in this nanocorner of the ‘Sphere© quite frequently; he’s an economist, and an insightful writer, and a lot of news lately has been about our economy, and cries out for insight.
Since so much of the U.S. economy is driven by consumers, and has been, I’m imagining, since the end of World War II, when the bomber factories returned to stamping out annual cosmetic freshenings of shiny Fords, Plymouths and Hudsons to an eager population that couldn’t wait to “See the U.S.A in your Chevrolet,” consumer perceptions are a key indicator of economic health.
It’s no accident, I’m thinking, that the annual survey Krugman quotes, the Consumer Sentiment Index, comes out of the University of Michigan. Its Ann Arbor campus is nigh to the heart of that same automobile industry, and very little drives the economy like the sale of automobiles.
Pity that Detroit has taken so long to remember how to build a good car, but that’s a discussion for another time, or place.
Meanwhile, even Toyota sales are off… I’d say the consumer is downright depressed.
Crisis of Confidence
By PAUL KRUGMAN | Published: April 14, 2008
The Survey Research Center of the University of Michigan has been tracking American economic perceptions since the 1950s. On Friday the center released its latest estimate of the consumer sentiment index — and it was a stunner. Americans are more pessimistic about their situation than they have been for more than a quarter century….
Why are we feeling so down?
Our bleakness partly reflects the fact that most Americans are doing considerably worse than the usual economic measures let on. The official unemployment rate may be relatively low — but the percentage of prime-working-age Americans without jobs, which isn’t the same thing, is historically high. Gross domestic product is up, but the inflation-adjusted income of the median family is probably lower than it was in 2000.
Beyond that, perceptions of the current economy are strongly influenced by the public’s sense of the larger pattern.
Larger pattern. Let’s see: investment bank bail-outs. Foreclosures in a cul-de-sac near you. $zillion dollar payouts to executives who apparently couldn’t manage risk better than the sap plunging $50 his family needs for groceries on this week’s mega lottery. [Need I link to the quote? Not necessary. The lottery is a tax on people who failed to learn math.]
[Please click the link below for the complete article — but then please come on back!]
Mr. Krugman has been rather unimpressed over this presidential primary season with the candidates’ statements and position papers on the economy, and what they plan to do should the depressed public choose them come November.
The good news: should a Democrat win (and how odd it is to have to place this in the conditional), there could possibly be changes along the lines Krugman suggests: regulation with sincerity (mainly a joke these past 8 years); policies favoring labor (small ‘L’), perhaps ending some of the attractiveness of outsourcing and raising the minimum wage. Such steps could jolt us out of our doldrums, perceived and real.
Meanwhile, 300,000,000 doses of Wellbutrin, stat!
It’s it for now. Thanks,
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