Iraq aside, economy tops voter concerns

Democratic presidential hopefuls may try to capitalize on dissatisfaction with the economy.

from the July 26, 2007 edition

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A Financial Times/Harris poll released this week, for instance, showed strong support in the US for raising taxes on the rich, with 61 percent saying the "highest earners" should be taxed more. Yet polls also generally show that Americans think their own taxes shouldn't be raised – offering some comfort to Republican candidates who are defending the virtues of low taxes for the economy.

The Financial Times survey also found deep doubts about another policy that has been championed especially by Republicans: free trade. Some 45 percent of Americans say globalization is having a negative effect on the country, versus 17 percent who say the impact is positive.

All this is puzzling to many economists who say that open commerce has been a large winner for the US economy in recent years, fueling "every day low prices" at Wal-Mart. "This unemployment rate is unbelievably low," at 4.5 percent, says Brian Wesbury of First Trust Advisors in Lisle, Ill. "Wealth in our economy has never been higher."

The explanation for pessimism, in his view, is rooted partly in the pace of economic transformation.

"We are in the midst of one of the most transformational time periods in terms of economic activity," Mr. Wesbury says.

Different worldviews, in response to this era of change, may explain part of the large gap in economic outlooks along party lines. In a recent Investors Business Daily/TIPP survey, Republicans posted the highest confidence level among 21 demographic groups tracked in the poll, with an economic optimism index of 58.9. Democrats had the lowest score, at 39.4. (A reading above 50 is generally optimistic.)

Differing views on the Iraq war may affect such surveys, analysts say.

The survey also found that Americans in general feel positive about their own financial outlook, but negative about the overall economy and government policies.

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