8 in 10 Americans Say Economy Is Bad | Hacker News Reader

8 in 10 Americans Say Economy Is Bad

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12 pointschailatte32 comments

Because it is bad. There is another major correction coming and when the second wave of foreclosures hits things are going to get much, much worse for the whole world. People know what's going on even though the powers that be are very optimistic. Every major economist has been wrong about industrial output, home sales, and GDP growth projections so far. They've been wildly off too. I don't think their employers are going to call them on it because they were all wrong. The clustering of predictions keeps people who are massively incompetent employed.

Right now the world's economy is being propped up by debt and phony stimulus money. When that party stops the reality of our situation will be exposed for what it really is: ugly.

The powers that be have to be optimistic. That is a prerequisite for growth. In fact, the real powers (CEO's and boards of the big corporations) are pessimistic, and therefore the economy is in danger of dying.

The whole thing is largely psychological. It's not like we actually have crumbling infrastructure that would be difficult to repair; it's just that the social structures (money, corporations, banks, government) we have in place are not properly arranged to spur allocation of wealth to new projects.

So I find all this naysaying essentially to be a self-fulfilling prophecy. It's entirely in our collective minds that we can't build enough for everyone to be prosperous. Naturally, it's a real problem, but when people say that specifically the stimulus money is "phony" it seems very myopic. It's all phony. The question is, how do we convince ourselves it's real, and how can we harness that?

Well ... let me just comment that it's long nasty times like this that force the reallocation of capital to areas that can use it. It's particularly long and nasty when the bubble is leverage based (as compared to the dot.com crash which did no lasting direct damage), since deleveraging is so painful and dangerous.

The real trick is to negotiate the crisis. Spain didn't and they've been poor for centuries. I don't think the Japanese did and I suspect they truly are dying (in a very literal sense, I will be surprised if they still exist as a nation by the end of this century and demographically there well be none left by the end of the next).

The Netherlands managed (don't know that history well). Great Brittan may have depending on how you score it, as I recall it took 100 years.... We did, but it took WWII to pull us out of our tailspin; who knows what would have happened without that?

It's not all psychological, the problem is that massive amounts of capital have allocated to the wrong uses - building 100 homes, when only 50 were needed or building a factory that produces 10,000 items when only 5,000 are needed. Unfortunately do to all the interference in the market no one is sure what the correct prices are and hence what the actual demand is and what is and isn't profitable. Adding to this all the messiness of new insurance laws, etc it becomes very hard to predict what the next correct move will be so instead people save their cash until they know what to do.

The way we find out what is real is by seeing what people will buy at what price and letting everyone go bankrupt who can't pay their bills. This will depress the costs of goods until demand picks up. For instance, everyone thinks their house is worth probably 30 - 40% than it is. So they refuse to sell at lower prices, keeping inventory off the market. Thus no one is buying houses since the asking price is too high. Housing is tough one because it takes forever for the prices to adjust back to normal, but everywhere this type of effect can be seen.

Headline should read "2 in 10 Americans say reducing incredibly complex systems to binary questions is silly"

What else would you expect when 4 out of 5 media outlets say the economy is bad?

I don't just read that it is bad, I see the effects in my environment. It's happening everywhere I look around locally, businesses that have been around for years closing, no raises, no spending and everything that I hear about things going well at the top end just don't seem to be reflected at the bottom.

Whether you believe it or not, a large portion if not a majority of the nation believes the MSM is strongly biased to the left. If with a Democratic President and Congressional super-majority, something not seen since 1977, the reported news is this bad, they know it's truly bad.

Anyone who's old enough like me to remember the Carter years (1977-80) knows that it's bad (ADDED: especially those of us who remember how poor Carter's relationship with the media was).

I have to agree with you whole-heartedly. I cannot believe that the sensationalist media and its continuing push to make this economy really in a recession. Yes, joblessness is up. Yes, credit is getting harder to come by.

I don't think you can honestly find 8 out of 10 people that have been affected enough by this past year or two to honestly say their spending habits is one of someone in a recession. Restaurants are still full on the weekends; amusement parks are still busy with tourists. I just don't get it.

Though this is coming from someone who still has a steady job and is not in financial problems due to the current state of the economy.

edit: finishing thought.

How many people do you know are un- or underemployed? (The latter are those not making what they were making despite trying, most especially those not in a full time permanent job but instead working part time, contracting, etc.)

For the next step of the discussion, see this remark of mine: http://news.ycombinator.com/item?id=1639188

But is it bad for those 8 people? Or do they just perceive it being bad for everyone else?

"It's a recession when someone you know loses their job. It's a depression when you lose your job."

True, U-6 and beyond unemployment, underemployment and just plain given up searching is so high (22% according to http://www.shadowstats.com/alternate_data/unemployment-chart...) that we're seeing something akin to Great Depression levels. It's just that we're wealthier, have much greater safety nets (as I recall 40 million are on Food Stamps), we're more flexible, etc.

For that matter, our government is a lot better than in the Great Depression (Hoover/FDR), e.g. we aren't doing stark raving mad things like driving up food prices by destroying food and preventing planting when 1/4 of the nation is malnourished....

Mobility and information are big factors too.

In the Great Depression, a poor person or a farmer out in the middle of nowhere couldn't just hop on the web and make themselves more employable (or market themselves), or drive 50+ miles on well-maintained highways and interstates to other opportunities.

Exactly, that's an important subset of what I labeled "flexibility".

What gets me is shopping centers. Every one I see if 25% to 50% empty. If I recall, a few years ago you'd once in a while see an empty unit in a shopping center, and usually there was a sign that something was coming soon. (Am I remembering incorrectly?)

It kind of feels like a post apocalypse situation going into some shopping centers?

BTW my wife rents retail space at a shopping center and even though they have 20% of their units empty, they refuse to lower the price she negotiated five years ago (her lease is up for renewal). She called a few other places and they're also still charging the same prices and don't seem willing to negotiate.

What's the deal with that? Shouldn't prices be going way down since there's so much empty space everywhere?

I think they're hoping inflation will eventually compensate...

There's a development locally that started before the recession (Barrow Crossing). It finished just as the recession was hitting its stride, and one of the anchors pulled out before it opened.

It still only has a few stores, and they're all major chains.

Another anecdotal indicator, for the past few months when I go out to restaurants they've been half full. These are places that less than a year ago had 30 minute waits most nights.

I wonder if it takes this long after the crash for people's spending behavior to adjust, or are we really hitting a second dip now?

Contrarian indicator.

There are some excellent investments out there right now that in twenty years will cause people to look back and wish they had made a move when everyone else was paralyzed with fear.

"Be fearful when others are greedy and be greedy when others are fearful." -Buffett

Well, of course ... but first you have to have the money to invest. That's not true for most Americans, especially since most who do have investments have them in their primary residence and retirement plans, the vast majority of which have taken a significant hit.

Then you have to call the bottom, where the adage "Don't try to catch a falling knife" comes into play. A lot of people who bought into the stock market in, say, 1931 lost their shirts.

That said, I'm sure there are good and fairly safe asset classes (perhaps the one this forum is dedicated to? :-) to be invested in right now, but it's certainly riskier than "normal".

Also, when citing that "in twenty years" hindsight concept don't forget survivorship bias....

What investments are you speaking of? Have you gotten into any of them?

There were some great investments out there in March of last year. P/E ratios were in the single digits, some companies had fallen by massive amounts but were still solvent.

Then the rally came. Ford went from less than $2 a share to more than $10, Seagate went from $3 to $21 (though back down to $11 now). Wells Fargo went from $8 to $32.

Those are the great deals people talk about in history books, but they're mostly gone. The last 18 months have seen huge infusions of capital into the market to keep things going. As a result, stocks have bounced back.

Also, no one is really fearful like they were in Oct-Dec 2008. Those days where everyone wondered who was going to collapse next or if the government was going to bail out entire sectors, that was fear. Now people are just pessimistic, but they aren't scared the world will collapse.

The economy's great or bad depending on what you look at.

Large businesses are doing fine--they get a lot of money from investing in diverse markets that are less affected by a single country's political and social situation.

Small businesses and most people in the US are still in a rough spot though.

I know it's "just one data point," but I live in Portland, OR and everyone is hiring. No, seriously, every software shop I know about is looking to hire. Not just boring-as-hell C# and Java cubicle farms, but startups and small companies writing interesting software with Python and Ruby.

Ruby programmers might be doing ok, but:

the general problem with Portland is that nobody else is hiring... ever

I'm wondering why the roads are still so full of cars, even late into the night.

People with second and third jobs, people taking night shifts to stay employed, people working late to stay employed.

That and stuff like it, mostly.

[Citation Needed]

All I've been able to find is a PDF showing a lot of people with second and third jobs on the BLS website from 1997, so nothing recent.

It's something that seems reasonable, but I don't have anything to back it up. The BLS is probably who would have it though if you wanted to look in to it.

Things can't be too bad if people have three jobs.

"Uniquely American." is the correct phrase I believe. Just an example of how out of touch the wealthy are from reality.

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