The data continues to show the post-crisis recovery is, as expected, sub-par. GDP at 1.8% is soft, and you cannot blame all of it on the mad weather this past Winter. Job creation is disappointing at best, long term unemployment remains an intractable problem.
But are we are still in a Recession, or even a Depression? That, according to a recent Gallup poll, is what more than 50% of the US believes: That the U.S. is (still) in Recession or Depression.
Is the public ahead of the curve, or are they merely looking backwards?
During the actual Recession (officially dated December 2007 to June 2009), the public was way ahead of many public officials. Financial crisis architect Phil Gramm famously called it a “Mental Recession” and accused America of becoming a “nation of whiners;” know-nothing media pundits liked Amity Shlaes defended Gramm’s characterizations.
Is the public right (again)? Or is this simply the Recency Effect? Has the severity of the 2007-09 collapse changed them in ways quite similar to the way the Great Depression turned their great-grand-parents into a generation of cash paying, credit averse money savers who hated leverage and bank obligations of all kinds?
I suspect it is more of the latter than the former. The severity of the financial crisis, and the elevated levels of insecurity it created, left an indelible mark upon their psyches. The latest generation might become more risk averse, less likely to take a flyer on a new start up or company. The post-credit crisis, post collapse era may be defined as its own unique demographic. We had the Baby Boomers, Gens X & Y; This graduating class of college seniors might be called the Post Crisis generation. Do not be surprised if their attitudes about risk, corporate America, and working for someone else is very different than priorgraduating classes.
More than half of Americans (55%) describe the U.S. economy as being in a recession or depression, even as the Federal Open Market Committee (FOMC) reports that “the economic recovery is proceeding at a moderate pace.” Another 16% of Americans say the economy is “slowing down,” and 27% believe it is growing.
Amity Shlaes Does Not Know What a Recession Is (July 12th, 2008)
Quote of the Day: Phil Gramm (December 10th, 2008)
More Than Half Still Say U.S. Is in Recession or Depression
Dennis Jacobe, Chief Economist
Gallup, April 28, 2011