January 15th UPDATE

A few days ago, we put together a memo compiling recent and longitudinal public opinion data on Americans' views toward the economy and deficit spending. Since then, NBC and the WSJ have released a follow up poll to their December 8th survey. Many of the results reproduce earlier findings. Americans are still feeling the pinch, still bracing for a long-term economic slowdown, and still more concerned that the government will overspend than that it will underspend (though see discussion of this finding below.) But the new survey also indicates that Americans' views on the economic recovery may be shifting favorably for Obama.

We noted before that Americans appeared somewhat unsure about how to address the economic crisis, and that they seemed to be taking cues from media and party elders. The latest from NBC/WSJ seems to indicate that the public is gradually shifting towards favoring President-elect Obama's economic recovery plan. Just under half (43%) think it is a good idea. Thirty percent of Americans still are not sure or do not have an opinion about Obama's plan, but only 27% oppose it.

While such numbers do not adequately support the January 15th WSJ headline "Obama, Stimulus Proposals Enjoy Broad Backing in Poll," the headline is nonetheless accurate. Ratings of Obama - on everything from personal style to leadership qualities - were through the roof compared to recent presidents. Many of the planks of his stimulus plan also enjoyed wide support. The most popular recovery proposals - "creating jobs through increasing production of renewable energy and making schools and public buildings more energy efficient," "creating jobs through building or repairing roads and bridges," and "providing tax incentives to businesses that create jobs or invest in new equipment" - all enjoyed the support of 80% or more of the public (89, 85, and 82 percent, respectively). This appears to be a marked shift from NBC/WSJ's December survey. Then, Americans tended to prioritize tax cuts over spending that would lead to job creation. Only a month later, Americans indicated, by almost 2 to 1 (63% to 33%), that they preferred a plan that would focus on job creation through government spending.

Why the change? At least one good hypothesis is that, as noted earlier, the American public is taking its cues on economic policy from the media and from a President-elect who is currently about as popular as ice cream. Even Republicans and Independents from the leadership to the rank-and-file seem willing to give Obama the benefit of the doubt. When NBC/WSJ pollsters asked non-Democrats whether or not Republicans in Congress should compromise with Obama, 68% said they should play nice - exactly as many are doing already.

The polling report (available here: http://s.wsj.net/public/resources/documents/WSJ_Poll_011409.pdf) also had some interesting questions that could be explored further or differently. One question attempting to get at how worried Americans were that the government would miss the mark on stimulus spending could probably have been worded better. It asks: "Which of the following concerns you more? ... that the government will spend too MUCH money to try to boost the economy and as a result will drive up the budget deficit, OR... that the government will spend too LITTLE money to try to boost the economy and as a result the recession will be longer." Results show that Americans are more concerned about the former than the latter, but what does that mean? Does it mean that they anticipate that the government is more likely to overshoot than undershoot? Or does it mean that they think the consequences of overshooting are more dire than undershooting? Some combination of the two? The wording also masks Option 3: that the federal government will spend too LITTLE and as a result the recession will be longer AND future budget deficits will be larger as tax revenues decline into the future. Our hunch is that most Americans are simply predicting - in a fashionably cynical (and perhaps correct) way - that the government is more likely to overshoot the magic number than to undershoot it. But if overshooting is better than undershooting (a possibility not offered by the survey) their "concern" about overshooting would probably fall off significantly.

Another very interesting question on the survey addresses Americans' estimations of the consequences of deficit spending. The question reads: "There has been a lot of talk recently about the budget deficit. In thinking about the budget deficit, which comes closer to your point of view? Do you think of the budget deficit as being... A real and important number that has a direct effect on the average citizen, OR... More of a bookkeeping and governmental number that does not have an effect on the average citizen?" Americans answered this nearly 2 to 1 in favor of the deficit having a real effect. Here at American Environics, we are interested in uncovering the cogitations underlying such an evaluation. On the one hand, Americans' understanding of economics probably comes from a household ethic of balancing the checkbook at the end of each month. But on the other, Americans also carry huge amounts of debt in mortgages, car loans, and student loans - debts they probably think of more as investments. If people are pushed to explain their assessments of deficit spending - whether at home or as a nation - how are they likely to respond? This needs to be explored further, as do other questions about how we - as individuals and as a nation - can get our economic house in order and move into a prosperous future.

In the weeks and months to come, we will continue to follow polling data on the economic recovery. We will be especially interested in seeing how support for Obama's plans holds up past the honeymoon phase of his presidency. Are Americans just giving the popular new guy the benefit of the doubt for now? Are the chattering classes and media gradually teaching the public to respect the efficacy and wisdom of Keynesian stimulus? Or are we, perhaps, witnessing a long period of crisis leadership and followership during which Obama will be given a relatively free hand to steer the economy into uncharted waters? Time will tell. And we will be watching.

January 12, 2009,

Introduction
A broad inspection of public opinion data on the state of our economy reveals that Americans are worried about the future, less than optimistic about government's ability to face down the crisis, and ambivalent about Keynesian approaches to recovery.  Furthermore, as they imagine future possibilities, they seem to be relying upon traditional partisan and ideological understandings of the economy.  Thus, Democrats are more likely to support government spending as a stimulus strategy while Republicans are more likely to support reduced taxation.  However, the high incidence of "don't know" and contradictory or otherwise ambivalent responses suggests that Americans may be open to bold leadership.

This report consists of three parts.  The first summarizes the current state of public opinion regarding the economic crisis and its implications for Obama's proposed stimulus plan.  Here, we draw on surveys by CNN, Politico, Rasmussen, Gallup, and NBC/WSJ.  The second part of the report summarizes longitudinal data from the General Social Survey culled together by our research team.  These data reflect Americans' longstanding ambivalence regarding public spending and taxation.  The third offers some broad recommendations for approaching economic recovery given the current state of public opinion.
 
The Current Situation
Right now, Americans are feeling the pinch.  Fully eighty-nine percent of Americans report being dissatisfied with the current economic situation (63% are "very dissatisfied") (Politico).  Sixty-eight percent report that they are changing their habits to reduce their overall household spending (Gallup 12/14/2008).  Of those who have money in the stock market, 87% report losing money.  Almost half of them (47%) say they have "lost a lot of money in the stock market" in the past year (ibid.). According to Rasmussen polling released in early January 2009, half of Americans (50%) say their personal financial situation is getting worse while only 19% say their situation is improving.  As a result of the paired housing and financial crises, Americans are much more worried about their ability to "maintain the standard of living [they] enjoy" than they were prior to April 2008 when the housing crisis came to a head (Gallup).

Continue reading "Opinion Matters: How are Americans Thinking About Economic Recovery?" »