Monday, March 16, 2009

The confident, quiet majority

An Observer colleague suggested recently that The Squeeze try reporting economic statistics with a twist. Reverse the numbers, he said. Tell what's going right.

If 12 percent of us are at least one month late on our mortgage, that means 88 percent are paying on time each month. If 9 percent of us are unemployed, then more than nine out of every 10 have a job.

What do you think?

Certainly, the danger in the approach is that it doesn't acknowledge deviation from normal - there are more people now who have lost their incomes, more people who fear they won't make their next mortgage payments. But the point of reversing the numbers is valid: It's important to note that a vast majority of us are not going to lose our jobs and homes.

Last Friday, in our very unscientific Squeeze poll, we asked how long you thought you'd have to work before retiring. The winning answer, by far, was "Before age 67" (the year of full Social Security benefits.) We were, admittedly, surprised at the optimism. Should we be?

News is often, by its nature, an exercise of reporting what's going wrong with our lives. It's an old journalism adage that you'd be uninterested in the thousands of successful takeoffs and landings that go on each day at our airports. We tell you about the unusual - the flights that have a hitch.

The danger with recession journalism is that in telling you stories about very real lost jobs and thinning retirement accounts, we contribute to consumer fear, which leads to spending paralysis, which heightens economic misery. It's the biggest complaint that comes into The Squeeze: You're making things worse.

The flip side is that when good news becomes unusual, we leap to report that as well.

By recession standards, last week was one of those weeks. Retail reports were surprisingly encouraging. Same with earnings reports. Stocks rallied.

Last Friday, a Consumer Index survey by respected pollster Rasmussen showed Americans are more confident today than at any point since the economy became starkly worse last November.

Optimism, experts say, is half the battle in beating the economic downturn. (Stabilizing the banks is the other chore). When consumers feel comfortable enough to spend, they'll start spending, which will stir housing and manufacturing, which will create jobs. Believing things are better is the best way for things to get better.

Sunday's Washington Post asked three "wise men" their thoughts on the economy and market. The most optimistic financial expert noted that we've had 11 recessions since World War II - and 11 recoveries. The least optimistic said that we would not be making the profits on our investments that we are accustomed to. He did not, however, say that we would not be making profits on our investments.

The message: We will be fine, eventually.

We want to hear from those of you who feel the same. Are you optimistic for the short or long term? Tell us why.


Anonymous said...

I am optomistic for the long term, because the American people are resilient, and although it takes a while for them to catch on, they will eventually get rid of this administration when they have had enough of their incompetence and foolishness.

CBW said...

I agree 100%. Yes, it's bad out there now - but how much of that is OUR OWN fault? How much of it is due to the fact that we are panicking about the unknown, and causing this recession to grow even deeper? Things will not get better until the vast majority of us can be optimistic about the current state of the economy - remember, what goes down, must come back up! :-)

And as a disclaimer - this is coming from a current full-time MBA student who is graduating in May, and still has not found a job. Am I worried? A bit. But I know that I WILL find a job soon, it just might take a little longer than it normally would have!

Anonymous said...

I was optimistic until last Friday when our office was informed we would be taking yet another (yes, another) 20% pay cut--our first 20% off was late last year--
But hey, at least this time we will get time off . . . Maybe we can use our free time to go shopping and help stimulate the economy (with the money we don't have from paycuts???).

Vincent said...

Good Morning Peter,

Fantastic Question, Fantastic Post.

The correlation between the peaks and valleys of the financial sector, such as say wall street indices, and when the media reports "positive news" speaks for itself.

Yes there are big problems, but they are problems we will overcome. There maybe a little discomfort along the way or a lot. We as Americans tend to want to know what our problems are, but focusing only on the negatives (media headlining), brings just that in return.

Becky nailed it, we will figure it out, fix it, and be better for it.

Anonymous said...

I believe the market has botttomed but Im concerned Obamas multi-trillion dollar deficit spending over the next three years will choke off any meaningful recovery due to new taxes and higher rates on existing taxes.

Anonymous said...

Abolish all income taxes. Let's get America moving again by letting us keep are own money.

Anonymous said...

Only those that mindlessly listen to the chosen one and his constant drone of this being the "worse economic mess since the great depression" bought into this endless replay of doom and gloom. And now they seem to parroting McCain who took a lot of ctriticism for saying the fundamentals of the economy are strong. Heat from the braindead left. Question is now who can The Teleprompter and Thief push his agendas with a crises that is not a crises?

Anonymous said...

I guess you got the talking points...

And, how come you only want to hear from those that agree with you?

Anonymous said...

A co-worker has been trying to leverage the rumor mill for good use by telling everyone that the recession is over in an effort to get people to be more optimistic. Initially we all had a good laugh, but maybe he is on to something.

cltindependent said...

Thankfully, I'm still working but I do know people that have lost jobs. I think the news is reported negatively because someone that is late on their mortgage or out of work has a situation that is more serious of course than the people still working. I'm optimistic overall about the economy. I didn't expect an immediate change in the economy. Of course coming out a recession will take time.

Anonymous said...

I am optimistic long term ... however ... short term is scary. I am 54, laid off, my husband unemployed. We have no medical benefits, are draining our savings (we might be able to survive another 10 months), and I am not at all sure I will be able to keep my house. We are both trying to find jobs, leaving no stone unturned. My concern is that the "long term" is longer than I have to live, and the "short term" will be the next 6 to 10 years. Happily, America had had enough of the Bush administration's incompetence and foolishness and got rid of them; sadly much damage had been done which must be addressed. Never again should we allow the wealthy tier to enjoy the benefits of "growth" without also having to bear the burdens.

Anonymous said...

Yeah, Becky. When the people see what a follish mistake they have made, we can hopefully get back to a true Amrerika loving administration like the one we had for the past 8 years.

Anonymous said...

I'm optimistic, but what I find interesting is that the Obama team is now saying the fundamentals of our economy are strong. Didn't they dump all over McCain for saying the same thing during the campaign?

John McCain - 9/15/08: On the campaign trail in Jacksonville, Florida, the Senator declared this morning that "the fundamentals of our economy are strong," despite what he described as "tremendous turmoil in our financial markets and Wall Street."

Obama Economic advisor, Christine Romer - 3/15/09: "The fundamentals are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology," she said. "We know that — that temporarily we're in a mess, right? We've seen huge job loss, we've seen very large falls in GDP. So certainly in the short run we're in a — in a bad situation."

Dr. Horrible said...

Optimism is for people who don't realize how we've doubled the money supply in the past 12-18 months, and apparently plan to double it again in the next 24.

Optimism when there's reason to be optimistic is just being realistic. Optimism when we're staring down an Argentina/Zimbabwe scenario is just idiocy.

Anonymous said...

Long as the news media keeps sensationalizing the news and causing mass hysteria in wall street and the banking sector then people will remain doubtful and unsure.
I've never seen anything like this is my entire life!
The majority of people are optomistic, pay their bills on time, and do what they're supposed to do - but the media only focuses on the few that broke the rules and are now whining because they got caught.
They're the ones making our country look stupid, and that we don't forgive.
So, stop the media madness and things will get back to normal...and our country will regain its dignity.

Vincent said...

"Dr. Horrible said...

Optimism is for people who don't realize how we've doubled the money supply in the past 12-18 months, and apparently plan to double it again in the next 24.

Optimism when there's reason to be optimistic is just being realistic. Optimism when we're staring down an Argentina/Zimbabwe scenario is just idiocy.

March 16, 2009 10:43 AM "

You should be strapped to a chair and forced to watch "It's a wonderful life" for three years, 15 days and how ever many minutes it takes to complete the last running of the movie. Or maybe you should just pack up and move to Argentina/Zimbabwe today, and make your pernicious posts from there tomorrow?

Go away Doom Sayer, just cuz' you hopelessly have nothing to live for does not mean folks like Becky up there can't help drag us out of this mess.

Anonymous said...

The quiet majority are the people fed up paying high taxes!!!!!!

Anonymous said...

The quiet majority is growing each day as the present administration postures, lies and spends. More taxation is sure to come. Hopefully, we can make enough noise before we become Venezuela or Cuba. I hope you are correct, Becky. You help make me more optomistic.