And so the headline from Reuters read.
It may not have made as much news, what with the Olympics starting up, and the media making way to much of Mitt Romney’s technical, honest answer to a question about those games, but it is big news, as important, maybe more so, than jobs and unemployment data.
Ours is a consumer demand driven economy. You want economic recovery? Well, it all starts with consumer spending. If businesses don’t experience or have tangible reasons to anticipate increases in consumer demand, they’re not going to expand. They’re not going to hire people to make what they’re not sure they can sell.
To quote Richard Curtin, director of the Thomson Reuters/University of Michigan study, “While consumers do not anticipate an economy-wide recessionary decline, they do not expect a pace of economic growth that could satisfactorily revive job and income prospects. Moreover, consumers have become increasingly convinced that current economic policies are incapable of solving the underlying problems facing the economy.”
Consumer “sentiment” is not the same as consumer “confidence.” Not precisely. To understand the difference would require a careful comparison of the questionnaires used to determine each measure. Suffice it to say, the quote from the director of the study indicates that consumers lack confidence in our government’s ability to effect, or at least facilitate, if not outright encourage a recovery. And it’s not an illusion. It’s not as if the programs are working, but people just don’t see it, are just too impatient to appreciate what President Obama has done for us, although that’s certainly what he would like us to believe. The fact is, the President’s efforts to encourage economic recovery are not working, and that’s because they are poorly designed.
So what’s it going to take to turn consumer sentiment and confidence positive? Time. It’s going to take time for the economy to save itself, and for a whole new set of government recovery programs to prove their effectiveness. And what will be the source of those new policies? A different President and new faces in the Senate and House to replace the career incumbents who have blindly and unfailingly supported President Obama’s programs.
We’re a naturally optimistic people, Americans, and yet we’ve lost confidence in our government, not the form of it, but the people who are running it. The simple and essential solution is to replace them. That’s what elections are for, and step one in the process of turning consumer sentiment positive on the road to a full economic recovery.