Friday, April 18, 2008
When historians look back on this period of time in the U.S., they will surely be amazed at how long the economic "good times" were sustained when, after a stock market bubble had collapsed, a new period of "prosperity" was ushered in via a housing bubble which, as should be clear to everyone by now, is well into the collapse phase.
They will also be surprised at how quickly the tide turned and how dramatically public opinion eroded after it became clear to even the most casual observer that everyone wasn't going to become wealthy beyond their wildest dreams just by owning a house.
This new survey from the Washington Post fills in some of the details on the rapidly eroding public opinion about the economy:
The public's ratings of the national economy continue to sour, with assessments deteriorating faster than at any point in Washington Post-ABC News polling.Pull up a seat folks - the most dramatic economic slowdown in many, many years and the sharpest reversal of consumer sentiment in decades are now underway, reinforcing each other as part of a vicious circle during an election year.
Nine in 10 Americans now give the economy a negative rating, with a majority saying it is in "poor" shape, the most to say so in more than 15 years. And the sense that things are bad has spread swiftly. The percentage who hold a negative view of the economy is up 33 points over the past year, and the percentage who rate the economy "poor" has increased 13 points in the past two months. That is the quickest 60-day decline since The Post and ABC started asking the question, in 1985.
One force behind declining assessments of the economy is the soaring cost of gasoline. With retail prices averaging $3.39 per gallon (a record high, according to the Energy Department), two-thirds of those polled said recent price increases have been a hardship, including about four in 10 who called the cost of filling their tanks a "serious" burden. Among those with annual family incomes under $50,000, 52 percent said gas prices cause serious hardship, double the number of those from higher-income families to say so.
The government's plan to alleviate some of the economic stress -- through economic stimulus rebates and new tax breaks for businesses -- is viewed even more skeptically than it was in early February. Nearly eight in 10 now think the package will not be enough to avert or soften a recession.
It's going to be (well, actually, it already is) quite a spectacle.