SURVEY SAYS: What’s Your Economic Assessment?

Respondents were largely optimistic.  Most – nearly two-thirds, in fact (62.2%) – felt that we were, in fact, “on a slow road to recovery.”  Indeed, another 8% went so far as to say that “things are better than they seem.” 

Of course, nearly one-in-five (18.1%) felt we were “just gearing up for a double-dip recession” – and another 12% thought we were already “dipping.” 

They may not be professional economists, but this week’s respondents had plenty of ideas about why things are the way they are (and/or why they thought they were).   

Many, of course, faulted the policies of the current Administration: 

This administration is not doing the right things to help the economy. They are spending way too much and it’s not helping. It needs to get out of the way of the private sector and let the private sector put people back to work. 

I don’t think Obama “”gets it”” at all.  Or, if he does get it, that’s even scarier.  That would mean he knows that SMB is the main source of jobs, but he still wants to cripple SMB owners, and that means he has more sinister intents, and that is really frightening.” 

When the bills come due for all the new government programs, we will be right back in recession or worse. 

Others laid it at the feet of the prior Administration: 

Our instant-coffee instant-response mentality leads to a desire for instant turnaround and that's not reality.  Patience is a virtue that the American public neither values nor practices when it comes to the economy.  It took eight years to create the mess and expecting it turn around in less than two is a pipe dream. 

And others found blame in both places: 

Not sure how we're going to get out of this mountain of debt the Bush era decisions and Obama-tic "stimulus" packages have created for the American people. Has there ever been a time when the 2 dominant political parties have been so divided or am I just ignorant with regard to the history of politics in our nation?  It disgusts me to be honest with you.  It's like watching two selfish people involved in a bitter divorce... only the American people are the children and there is no clear winner as to who the better parent would be. It would be better to be treated like the family pet! 

A significant number blamed the media: 

If the media would stop their constant drumming of doom and gloom, the recovery would really pick up steam... 

When the media is overly focused upon negative results, this can have a self-fulfilling prophecy effect on the economy. 

The media is doing its best to paint the worst possible picture of the economy, but with P/E ratios where they are the Dow really should be around 14,000. 

And some just saw it as part of a cycle: 

"We are entering a critical phase of the economy.  We are on a shallow rise however many hurdles will have to be jumped to continue upward movement.  We will see small ""hollows"" on this gentle rise 

Companies are raking in profits but not hiring. Completely self-destructive and short-sighted, because more workers mean more consumers mean more profits in the long run. 

Recoveries (as well as slumps) occur in sectors..Currently the positives trump the sectors that are still behind...but news tends to dwell more on the negative so overall things are better and moving in the right direction...just not at breakneck speed. 

Economy remains shaky.  Improvements seem to be short lived and unemployment likely to remain very high for up to ten years.  We need appropriate, well thought out regulatory actions to rein in greed but not the shoot from the hip scatter shot approach being used by the current party in charge.  If the balance of power is returned in the fall elections, I am optimistic that we can accelerate the recovery by getting government out of the way. 

My guess is that we'll see things get gradually better.  I confess I thought we'd be more recovered than we are now.  I could see unemployment being anywhere from 8-9% by the end of the year. 

There were actually a few budding economists:  

I think we're beginning to see that the divergence of two distinct economies in the US - the economy of global capital, which is free to roam the globe in search of growth and is slowly recovering; and the economy of the worker/consumer& local business, constrained by national borders and immigration policy, which is not faring so well.  I see this as inevitable "regression to the (global) mean" with respect to the standard of living for the average American, now that we're really competing in a global economy - and the boomer retirement bomb has yet to go off.  Still too much denial around where the average boomer is headed and how that will affect the overall economy… 

Excess leverage and reliance on Keynesian macroeconomic policies, specifically with regard to fiscal policy, has gotten us to the point where we are today.  All the growth in the US for the past decade was fueled by leverage and increasing debt ratios at the personal, corporate, and government levels.  Instead of looking at every decision from a pure microeconomic framework, i.e. how does this decision affect me at the margin?, the ease with which one could borrow excessively diluted the marginal cost side of the equation as everyone bought things they could not afford and drove our savings rate to zero, and lower in some cases… 

Beyond that, government pressure on banks to provide loans to people who were not good credit risks built the foundation for the economic collapse. People in banks/financial institutions then found a way to deal with the risk through securitization. Unfortunately, the risk was far greater than built in to the models and seemed to forget the multiplicative effect of artificial demand (bad credit risks buying homes) causing home values to increase unrealistically and the snowball effect of foreclosures on the value of homes. Home values do not appear that they will again reach the values of the 90s and early 2000s (adjusted for inflation) because those values were artificially supported by easy access to loans… 

And some were just trying to look on the bright(er) side: 

I have to think positively, wanting to retire in 3 years as I do a double dip would kill that retirement plan! 

The economy is psychological.  When people start believing things are looking up, the market will react.  Well, unless the politicians continue to thwart economic growth with massive spending, bailouts, and tax increases -- then no amount of positive thinking is going to help! 

I'm very tired of waiting for the next ax to fall.  I've decided to think positive and just work on improving the things I do have control over.  I'm hopeful that things will slowly improve over time. 

Some of my favorites were: 

It will be a slow recovery, but like long-term slow weight loss, it's healthier and will be more likely to "stick." 

Recovery doesn't happen when government stimulus funds are spent on projects like making computers laugh and cataloguing the species of ants. 

The recovery is so slow as to be practically Indiscernible. 

I'm only basing my answer on the fact that the bloodbath seems to have stopped at work.  Of course, short of shutting the doors, there is no many left to layoff. 

Like the man said earlier, there is no way we can have 2 bad investment decades in a row!   Hope he said that with data to back him up, rather than if we say it, maybe it won't happen. 

On a very very very slow path to recovery. 

But this week’s Editor’s Choice goes to the reader who observed, “I'm not sure it's a slow path to recovery, it's just a slow path.”  

Thanks to everyone who participated in our survey!  There are more – and expanded verbatim on the pages that follow!

Recovery doesn't happen when government stimulus funds are spent on projects like making computers laugh and cataloguing the species of ants. 

Excess leverage and reliance on Keynesian macroeconomic policies, specifically with regard to fiscal policy, has gotten us to the point where we are today.  All the growth in the US for the past decade was fueled by leverage and increasing debt ratios at the personal, corporate, and government levels.  Instead of looking at every decision from a pure microeconomic framework, i.e. how does this decision affect me at the margin?, the ease with which one could borrow excessively diluted the marginal cost side of the equation as everyone bought things they could not afford and drove our savings rate to zero, and lower in some cases.  Now that credit is no longer readily available due to increased borrowing costs, we cannot spend our way out of this recession.  We can, however, innovate our way out by creating valuable products and services and increasing productivity.  These two things are what will create jobs and put money back in the hands of the consumer to spend.  Individuals will need to learn new skills in order to compete and government social welfare policies should no longer be structured in a manner that does not incent individuals to become gainfully employed.  The future is uncertain since there is a disturbing trend of us Americans no longer being the hardest workers or the smartest workers across the board.  Without a fundamental shift in our belief system and the acquisition of some humility, we will be overtaken by the Chinese as the world's largest economy in a rather abrupt fashion.  That being said, the U.S. economy still is a beacon of hope for many countries and individuals and despite the increased volatility in financial markets, our economy will grow.  This recession, however, will be long and hard to recover from fully and it will likely take about half a decade, barring a major technological breakthrough, before unemployment returns to the 5-6% level. 

,I think we could be headed for bigger trouble economically than we experienced in 09 when you consider that the real rate of unemployment by any standards, other than the government's, is 17%+. That's a lot of people that need to be brought back into the workforce! 

This administration is not doing the right things to help the economy. They are spending way too much and it's not helping. It needs to get out of the way of the private sector and let the private sector put people back to work. 

"Oh how I hope the Dems get the thumping they deserve in November.  And I hope that the Republicans four years in the desert have given them a renewed focus on TRUE cost cutting and budget tightening and we don't again get that ""pork is anything that doesn't flow to my home state"" mentality that we had before. 

I don't think Obama ""gets it"" at all.  Or, if he does get it, that's even scarier.  That would mean he knows that SMB is the main source of jobs, but he still wants to cripple SMB owners, and that means he has more sinister intents, and that is really frightening." 

It will be a slow recovery, but like long-term slow weight loss, it's healthier and will be more likely to "stick." 

There is too much emotion in the markets at this time.   Every piece of news is reacted to and the emotion that comes with the news separates the winners and losers.   Usually wall street wins and the small investor loses.   It has been that way for ever. We have so many (NEW 401k participants) investors in the markets it will continue to separate the winners and the losers. 

Companies are raking in profits but not hiring. Completely self-destructive and short-sighted, because more workers mean more consumers mean more profits in the long run. 

Economy remains shaky.  Improvements seem to be short lived and unemployment likely to remain very high for up to ten years.  We need appropriate, well thought out regulatory actions to rein in greed but not the shoot from the hip scatter shot approach being used by the current party in charge.  If the balance of power is returned in the fall elections, I am optimistic that we can accelerate the recovery by getting government out of the way. 

My guess is that we'll see things get gradually better.  I confess I thought we'd be more recovered than we are now.  I could see unemployment being anywhere from 8-9% by the end of the year. 

"Must get people in federal government that get the government out of all the areas that it does not belong (eliminate agency after agency, revamp the way welfare/entitlements are done, etc.). The government has a long track record of proving how inefficient it is at trying to run things. The government's inefficiency is a drain on the economy. 

Beyond that, government pressure on banks to provide loans to people who were not good credit risks built the foundation for the economic collapse. People in banks/financial institutions then found a way to deal with the risk through securitization. Unfortunately, the risk was far greater than built in to the models and seemed to forget the multiplicative effect of artificial demand (bad credit risks buying homes) causing home values to increase unrealistically and the snowball effect of foreclosures on the value of homes. Home values do not appear that they will again reach the values of the 90s and early 2000s (adjusted for inflation) because those values were artificially supported by easy access to loans. In addition, the increased values allowed for easy access to additional funds through home equity credit which is no longer available. All this extra money has dried up and we can't expect it to return until the next generation when the mistakes of this one are forgotten. However, more people right now are reducing debt and saving. If this continues, we can develop and have a much more sustainable economy. An economy based on debt can go great guns for awhile but eventually it will fall but an economy based on reasonable debt levels (much lower than what most might consider ""reasonable"") and systematic savings will be long-lasting." 

Not sure how we're going to get out of this mountain of debt the Bush era decisions and Obama-tic "stimulus" packages have created for the American people. Has there ever been a time when the 2 dominant political parties have been so divided or am I just ignorant with regard to the history of politics in our nation?  It disgusts me to be honest with you.  It's like watching two selfish people involved in a bitter divorce... only the American people are the children and there is no clear winner as to who the better parent would be. It would be better to be treated like the family pet! 

We need to do things that will create jobs, but they are politically unpopular. 

We have gotten so soft and so used to instant easy results I don't think most of us have the patience or character to ride this recession out.  If we were really that close to another Great Depression our economy will need time to recover.  I am very grateful I still have a job and I pray those without jobs will soon see a brighter future.  Sound bites, poll numbers and partisan fighting will not lead us out of this recession.  I sincerely hope our leaders will come together and do what is right for all Americans and not just take the easy way out to capitalize on our discontent. 

I'm optimistic that 2011 will be a significant rebound year. 

Too depressing. The recovery is so slow as to be practically Indiscernible. 

I think someone used the expression "it's the economy stupid" to get elected many years ago. Until Obama and his democratic colleagues start doing things that are 100% focussed on jobs people aren't going to feel good about spending money and getting the economy moving. So it will be slow at best. 

I work for a commercial general contractor - we don't build homes, but rather corporate interiors and large commercial buildings.  We haven't seen an increase from the private sector development community yet --- banks are not in a lending mode; even if the deal can  get put together, it takes much more time than in the past.  So, projects "slide" from quarter to quarter to quarter. 

This can only get fixed by the elections in November and the winners in those races standing for tax cuts and smaller government. 

When the bills come due for all the new government programs, we will be right back in recession or worse. 

I think we're in a slow recovery and resigned to the public mood being gloomy for the next 1 to 3 years. It takes longer to glue a glass together than it took to break it in the first place. An economic crisis so deep it knocked the global system off balance is going to take several years to recover. 

I'm only basing my answer on the fact that the bloodbath seems to have stopped at work.  Of course, short of shutting the doors, there is no many left to layoff. 

Like the man said earlier, there is no way we can have 2 bad investment decades in a row!   Hope he said that with data to back him up, rather than if we say it, maybe it won't happen. 

Obama has to go - he is ruining us! 

I'm not sure it's a slow path to recovery, it's just a slow path. 

Companies are making money, but hiring is not necessary for most businesses.  So the recovery will be slow.  The wild card in our recovery is paying for all the government expense--what effect will the inevitable tax increase play on all of us? 

When the government learns that the best way to stimulate economic growth is to create an environment that's friendly to businesses large and small, we'll start to look up again.  Maybe the mid-term elections will be a good start! 

I think there are two types of organization:  those that always bounce back and those that always struggle.  Unfortunately, I work for a struggling organization that I enjoy.  However, I don't see things getting better and doubt that I'll ever be able to recoup my 5% salary decrease, lack of salary increases and unpaid furlough weeks. 

I'm very tired of waiting for the next axe to fall.  I've decided to think positive and just work on improving the things I do have control over.  I'm hopeful that things will slowly improve over time. 

gov't fed rally slowing; mid-term elections; 2011 tax increases for everyone; debt vs. GDP in the red; not to mention our bigger problems like social security, Medicare and continued high rates of unemployment ... have you noticed economists are now saying that the economy doesn't matter? kinda reminds me of the dot.com bubble when investment analysts said earnings didn't matter ... 

Recoveries (as well as slumps) occur in sectors..Currently the positives trump the sectors that are still behind...but news tends to dwell more on the negative so overall things are better and moving in the right direction...just not at breakneck speed. 

At the state level, depends on the governors' races.  At the national level, depends on how equal the representation is in the House and Senate. 

When the media is overly focused upon negative results, this can have a self-fulfilling prophecy effect on the economy. 

I think we're beginning to see that the divergence of two distinct economies in the US - the economy of global capital, which is free to roam the globe in search of growth and is slowly recovering; and the economy of the worker/consumer& local business, constrained by national borders and immigration policy, which is not faring so well.  I see this as inevitable "regression to the (global) mean" with respect to the standard of living for the average American, now that we're really competing in a global economy - and the boomer retirement bomb has yet to go off.  Still too much denial around where the average boomer is headed and how that will affect the overall economy.. 

It seems like only a few people are benefiting from all of the government's perks to try to get the economy rolling.  Only people with clunkers reaped that benefit.  Employees of the department of transportation are getting and keeping jobs.  People who are on unemployment are staying on unemployment longer because of the extensions, but where are the jobs for those people?  This stimulus isn't working across the board in my opinion and where is all of this money coming from?  Is American going bankrupt?  And, this medical bill that got passed . . . don't get me started on that!!! 

"Housing is in the toilet, which leads construction, trucks, building materials, etc, back into the toilet.  The banks are still as dysfunctional as they were when they led to the global meltdown - It's a sad day when you compare the 2nd qtr earnings of Apple (they make things) and Wells Fargo (they hold deposits, charge fees and pay no interest) and both are 3 billion dollars. 

Things are really still so far out of whack it is frightening!" 

Our instant-coffee instant-response mentality leads to a desire for instant turnaround and that's not reality.  Patience is a virtue that the American public neither values nor practices when it comes to the economy.  It took eight years to create the mess and expecting it turn around in less than two is a pipe dream. 

If the media would stop their constant drumming of doom and gloom, the recovery would really pick up steam... 

I don't think we ever got out of the "bubble" recession, never mind double dip 

I hope a slow path to recovery, but I am starting to prepare for an extended decline.  Too much negative news out there that the real fundamentals just don't support another extended growth period. 

"""The time to get interested is when no one else is. You can’t buy what is popular and do well""  Warren Buffett" 

Wish I knew but the government is printing way too much money. 

Until employment improves, and until Congress looks like they can do something positive for the country instead of just for their party, things will not improve. Too many Presidential edicts are also unsettling. Higher taxes and projected higher healthcare costs with the new legislation make it too convenient for businesses to hold back and it makes individuals too worried to spend. 

The federal government is extraordinarily overextended. If this is dealt with by raising taxes, the economy will be torpedoed. If dealt with by cutting spending - that is a balanced budget that includes some additional debt retirement - and lowering taxes and thus encouraging businesses to hire (increasing the tax base), we'll be back on a slow path to recovery. 

The media is doing its best to paint the worst possible picture of the economy, but with P/E ratios where they are the Dow really should be around 14,000. 

I think we are in a perilous economic position globally and that our US economy can go either way.  Or is it going up one week and down the next - actually we are still on that roller coaster.  Hard to tell. 

I have to think positively, wanting to retire in 3 years as I do a double dip would kill that retirement plan! 

The economy is psychological.  When people start believing things are looking up, the market will react.  Well, unless the politicians continue to thwart economic growth with massive spending, bailouts, and tax increases -- then no amount of positive thinking is going to help! 

"We are entering a critical phase of the economy.  We are on a shallow rise however many hurdles will have to be jumped to continue upward movement.  We will see small ""hollows"" on this gentle rise