Economy Numbers Up, Satisfaction Down

The NYT notes that the public simultaneously has high confidence in the economy and is dissatisfied with the general direction of the country.

A well-known index of consumer confidence has risen to its highest level in four years, according to the Conference Board, a research company in New York. In the most recent CBS News poll, conducted last month, 55 percent of respondents rated the economy as good, even though 66 percent of Americans said the country was on the wrong track.

Kevin Drum points to this nugget:

Spending by upper-income families appears to be driving much of the economy’s growth. The average hourly wage for rank-and-file workers — who make up roughly 80 percent of the work force — has fallen by 5 cents in the last four years, to $16.49, after inflation is taken into account.

Aha! “Yep, that might account for it. For most of us, trickle-down economics is more like Republican water torture.”

Of course, the polls show that the public thinks the economy is fine, so that’s probably not it. [To clarify: The lack of income growth for wage workers presumably helps explain the 45% who don’t rate the economy “good.” It does not, however, seem to shed much light on why 11% of those who rate the economy “good” nonetheless say “the country is going in the wrong direction.”] Indeed, a $2 a week real difference in purchasing power (5 cents x 40 hours) would hardly be noticable.

My guess is that other issues (the war in Iraq, immigration, various political scandals, etc.) are the reason that the “wrong direction” results are so strong.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Dave Schuler says:

    True, James, but the fact that the increase in prosperity is so narrowly focused doesn’t help.

  2. legion says:

    Indeed. There may just be some people out there who realize that even though they themselves might be doing better, the country at-large is going to the dogs…

  3. Roger says:

    James, people who have worked four years and seen no improvement in their living standard might just notice that they are not making any headway. Unlike, say, how they were doing during the previous admin. Just a thought.

  4. James Joyner says:

    Roger: They might but, according to the numbers, the don’t.

    And the administration in charge is largely post hoc ergo propter hoc. Clinton had virtually nothing to do with the dot.com boom or the recession that began as his second term was winding down.

  5. Roger says:

    I must have misunderstood. I thought your title was Economy Up, Satisfaction Down and we were wondering why.

    You may be correct re Pres influence on the economy, James. Interesting though how the right credited Reagan for building a great economy after a recession while running up trillions in debt and now credit GW for at least improving the economy after years of doldrums while doing the same, whereas a basically continuous great economy during Clinton’s admin as he paid down the deficit “just happened” or, again, gets attributed to Reagan. And of course, the Bush recession gets credited to Clinton as well. The righties do some amazing mental gymnastics on these kinds of things, one must admit.

  6. anjin-san says:

    Bottom line is the Clinton years were pretty good times for Americans. Not perfect, but nothing is.

    Things started to go downhill almost from the moment Bush took office. If you sit at the big desk you get the credit for what goes right and the blame for what goes wrong.

    What has gone right under Bush? I mean unless you run an oil company…

  7. James Joyner says:

    Roger:

    Reagan gets a fair amount of credit for the economy for some things he actually did (the tax cuts, chiefly) and some things that he continued (deregulation, which started under Carter).

    The Bush 41 recession had ended by mid-1992 but not in public perception. We had massive growth the final quarter of 1992. Then the boom hit after the World Wide Web hit in 1993. A recession started in late 2000 but became official in early 2001 (three consecutive quarters, two in Clinton’s term, one in Bush’s).

    I don’t blame Clinton for the recession any more than I credit him for the boom. I do give Clinton substantial credit for not getting in the way, especially his staunch support of free trade internationally (NAFTA, WTO, etc.). Indeed, he’s been better than Bush on that score.

    I don’t give Bush 43 much credit for the current boom, either. Yes, he pushed through a tax cut which probably helped stimulate the economy. But tax rates are already relatively low. The Kemp-Roth-Reagan cuts were massive, from a top rate of 70% to one in the high 30s. Going from 38 to 35 is just less of an impact–and we obviously can’t go to 18.

  8. Roger says:

    James, let me have trillions to borrow and spend and I bet I can improve the economy in the short term, too. I’m much more impressed by Clinton’s achievements (the actions he took) that saw the longest continuous economic growth in our history while at the same time cutting the deficit. Now that’s impressive. You can always live better on the credit cards for awhile, but then the bills come due. Climbing the ladder and cutting your debt is a whole different thing, and much more praiseworthy outside of “fair and balanced” political debates.

    Your praise of taxcuts without decreasing spending (Reagan and both Bushes) is no different than advocating running up the credit card debt while cutting your income, all the while planning to let the kids pay for it later. Not a very moral position vis-a-vis your dealings with your kids, but it will let you live a little better lifestyle for now.

  9. James Joyner says:

    Roger: What is it that you think Clinton DID?

    He took in massive amounts of tax revenue because of the Dot.Com boom. That windfall, combined with a Republican Congress that naturally could not agree on much with him, led to a balanced budget.

  10. Dave Schuler says:

    Things started to go downhill almost from the moment Bush took office.

    The operative word in that sentence is “almost”. Factually, things started going downhill before Bush took office.

    To give the devil his due, Clinton’s great talent was in making people feel good and that has a beneficial effect on people’s attitudes about the economy, the stock market, and business investment. In this area Bush has definitely been a horrible president.

  11. Roger says:

    James, what Clinton did was support open markets, oppose any efforts to stifle the growth of the internet economy through taxation (!), keep interest rates low through deficit reduction, implement more progressive tax structures that benefitted the little guys who actually spend their incomes in the US, strengthen political relations with the rest of the world thus contributing to market stability, and so on. Basically, wise rather than profligate stewardship.

  12. James Joyner says:

    Roger,

    Please. I already gave him credit for NAFTA and whatnot but that’s a negative–staying out of the way. And Bush 41 was doing the same thing, so it’s not like it was a directional change. Ditto not taxing the Internet.

    Clinton’s impact on the tax code was negligible.

    The interest rate policy was set by Greenspan and the Fed, not Clinton. And there wasn’t much deficit reduction until the very end. And reduction was almost completely accidental–i.e., a revenue windfall rather than significant spending reforms.

    Which relations exactly did Clinton strengthen? The Cold War was over, so he was nicer to Russia than previous presidents. Aside from that, what exactly?

    Clinton also let al Qaeda fester on his watch, ignoring two declarations of war and taking only nominal action against numerous attacks. Not exactly great stewardship on that front.

  13. Roger says:

    Please? Actually Clinton strongly advocated for NAFTA and whatnot–he didn’t just “stay out of the way.” As Wikipedia puts it, “it was able to secure passage after President Bill Clinton made its passage a major legislative initiative in 1993.” It took effect in Jan. ’04. I expected more from you James.

    The strongest advocate for the internet was Al Gore, for which he took ridiculous partisan abuse from Repubs. Clinton backed Gore fully. There is no similarity between Bush 42’s “advocacy” for the internet and the Clinton/Gore admin’s. Rather, while Bush 42 may have “stayed out of the way” on this–in fact had virtually no notable interest beyond passing–Clinton/Gore were advocates.

    Clinton’s impact on the tax code was negligible? McGehee, LJD, Herb, all you other righties, want to set James straight? Remember how Clinton raised taxes so high your hero GW had to come to save us all from ruin? Oh, never mind. James, let’s play it your way–Clinton “stayed out of the way” as a magical economy not dependent on magical tax cuts helped reduce the deficit (coincidentally only after Clinton came into office stating that cutting the defict would be a prime priority). Then, right on cue after Clinton, the deficits then shot up just as they had under Reagan and Bush 41. All just magical coincidental happenings. Yeah, right.

    What relations did Clinton strengthen? The way he handled NAFTA, the Kyoto Treaty, Kosovo, the Israeli/Palenstinian peace intiatives, efforts to ending violence in Ireland, and on and on made us probably the most beloved country on the planet. He led the world’s greatest superpower without arrogance and was willing to listen to others and understand their concerns. This in sad contrast to where Bush 43 has taken us. I believe you were either too partisan then or now to perceive this reality James. That or you are playing stupid on purpose. I would hate to believe that.

    The Al Qaeda charge is extremely hypocritical as well as anachronistic. The Repubs opposed many of Clintons’ efforts to get Bin Laden and Al Qaeda. And pre-9/11, these were small time thugs and you surely do not believe it was politically possible to attack and invade Afghanistan to capture a few criminals? etc. Clinton correctly saw that Al Qaeda was a growing threat and did what he could to get them as appropriate within the context at that time; unfortunately, his hands were largely tied by an extremely partisan impeachment effort and irrational opposition to anything Clinton tried to do by righties so blinded by their hatred for Clinton they lost site of the country’s best interest. That Al Qaeda was perceived at the time as small time thugs is borne out by GW’s completely ignoring them despite Clintons’ warnings during the admin transition until it was too late and 9/11 came.

    Clinton’s stewardship compared to GW’s? It’s my turn to say Please!

  14. ICallMasICM says:

    Clinton inherited an economy that had grown for 8 consecutive quarters including Q193 and left an economy that receded 2 0f the last 3 quarters including Q101

  15. Roger says:

    As I stated above, let me have trillions to borrow and spend [as Reagan did] and I bet I can improve the economy in the short term, too. The Clinton admin had an even better economy and for a longer period of time than Reagan while also cutting the deficit.