Looking at the opinion polls, it’s easy to be depressed these days. Three out of four likely voters say America’s on the wrong track, consumer confidence has tanked, investors are sitting on the sidelines and job growth has stalled.
In short, this is not a recipe for optimism.
In his most recent survey, Seattle pollster Stu Elway found that voter confidence has sunk to an all-time low, the worst he’s seen in 20 years.
Elway writes: “Economic recovery is a little like the five‐day weather forecast around here this year — the sun is always five days away. Two years ago, 68 percent of Washington voters thought there would be “noticeable improvement” in the Washington economy by now. Last week, 72 percent said improvement was still more a year away and 39 percent said it would be at least two more years before they saw improvement.”
National pollster Scott Rasmussen’s latest survey shows that 18 percent of Americans believe the economy is getting better while 64 percent say it is getting worse. Among investors, 21 percent think things are improving while 63 percent disagree.
That lack of confidence is having an impact on our state’s economy as well. Tax revenues for the first quarter of the new two-year budget are expected to be substantially under budget, which may prompt Gov. Chris Gregoire to call a special session or make deep additional spending cuts.
The final ingredient is job growth—or rather, the lack of it.
In 2008, the nation lost 2.6 million jobs, the worst performance since 1945. While the U.S. Chamber of Commerce has called for the creation of 200,000 new jobs each month over the next decade to restore prosperity, actual job growth has been anemic.
The New York Times summed up the situation best last week: “The problem is less that companies are laying people off than that they are not hiring. Consumers and employers alike seem almost frozen in place, with many economists saying that they seemed paralyzed by uncertainty about the future after the brinksmanship of the debt ceiling debate, the ensuing cut in the United States credit rating by Standard & Poor’s, stock market whiplash and more bad news from Europe.”
So how do we get out of this mess? Where is the bright spot in the gloom?
First, it is important to recognize that the recovery is slow, and we must take steps to make sure our economy avoids the feared double-dip recession.
Second, there are hard choices to be made as the super committee co-chaired by U.S. Sen. Patty Murray (D-WA) tries to find $1.5 trillion in savings.
But in the end, we will recover if voter confidence is restored and our elected officials remove barriers to economic expansion.
Irwin Stelzer, a senior fellow and director of economic policy studies for the Hudson Institute, recently wrote, “The American economy still produces more goods and services than the next three largest economies (Japan, China and Germany) combined. And is likely to hold that position as successive Japanese governments wrestle with decades of stagnation, China attempts to cope with the problems created by its centralized economic management and currency manipulation, and Germany wallows in a eurozone financial crisis that seems to worsen by the day.”
Stelzer notes that America’s per capita GDP far exceeds that of emerging rivals such as China and India, we have abundant natural resources, and our companies are well-managed. But perhaps our greatest strengths, says Stelzer, are our entrepreneurial spirit and something he calls our “American dynamism.”
So, there is some reason for confidence in the long run—if we can survive the next couple of years.