Are Obama's state-of-the-union ideas the antidote to economic fears?
As President Obama travels after his State of the Union speech to rally support for his proposals, he must also deal with a rising mood of pessimism about the economy. Fear of the future must not be allowed to feed on itself.
Barack Obama is using his fifth State of the Union message to kick off a presidential road tour. He will try to rally popular support for his ideas on job creation. But Mr. Obama may want to also address something other than his ideas.
Many Americans are still extremely concerned about their economic future despite an official end to the Great Recession three years ago. The mood is more cope than hope.
Here is one revealing statistic: About 1 in 4 adults has recently sought professional help for stress or depression. And other polls reveal an urgent need for the president to stem a contagion of fear.
Nearly two-thirds of Americans say they will never financially recover. More than half think the economy is still in recession – despite steady if slow growth – and that a full recovery will take at least six years. Only 1 in 5 says the next generation will have better job and career opportunities.
Housing and stock markets may be up – a function mainly of credit-easing by the Federal Reserve – but consumer optimism is going down. Last month, the Conference Board index of consumer confidence fell for the third month in a row. And a Wall Street Journal/NBC News poll in January found 60 percent of people say the coming year is “a time to hold back and save, because harder times are ahead.” A global poll finds a similar pessimism.
Creating optimism about the American economy has been a long ordeal. The main antidote to economic fear about the state of the economy is to raise the levels of trust among people – trust that new ideas will produce goods and services that people want, that markets will operate transparently, and that government debt won’t be a drag on the economy by competing for credit.
Trust is a solid lubricant for commerce while fear in an economy is, well, often a self-fulfilling prophecy.
Obama walks a fine line between sympathizing with this mood and trying to encourage Americans. His proposals for growth, such as subsidies for clean energy, are meant to raise hope in new industries and restore confidence. But as he said in his second inaugural, prosperity “rests on the broad shoulders of a rising middle class.” His first task may be to make sure those shoulders are not slumping. Only then can America see a rising middle class.