57% of Americans Still Think We are in Recession

We have quite an amazing disconnect between what is happening on Wall Street vs Main Street (although we were told in 2008 during the bailouts that of course Wall Street = Main Street).  In a poll just released, an astounding 57% of Americans still believe we are in recession.  This despite the official end point of the recession being some 1.5 years ago.   And a stock market up 100% from the bottom … but as we’ve discussed, the stock market – despite the dogma – is basically a tool that benefits the upper tranche of society.  The housing market has a much more broad psychological impact, as it touches a lot more people’s lives – and we’re still years away from recovery excluding certain locales like Manhattan, Washington D.C., agricultural country, et al.

There is a litany of reasons both for the unease on the ground outside of the upper 10-15%, and for the stock market action – we’ve discussed them both at nauseam so I won’t rehash here, but one tiny example of “what is good for Wall Street is not necessarily good for Main Street” is the news from Fair Isaac last evening. The company announced a “restructuring” (Wall Street term for mass firing) of 200 people, plus facility consolidation (hurting small business around any location that is soon to be closed). This 200 people is out of a workforce of just over 2000, or 10% of the company. Of course this is great for profits – 2 firms rushed in this morning to upgrade the stock and FICO is booming 10% today. Great for Wall Street.  Not so much for 200 families. Or whatever area where a facility will be consolidated.  Of course as you follow the stock market, you see these announcements each month, year after year.

  • FICO the leading provider of analytics and decision management technology, today announced cost reductions as part of its ongoing reengineering program designed to concentrate resources in areas with the greatest potential for growth and profitability.
  • The company expects to reduce operating expenses through staffing reductions, facility consolidations, and reductions in discretionary spending. In connection with these actions, the company expects to eliminate approximately 200 positions and record a pre-tax restructuring charge of approximately $10 million in the second quarter of fiscal 2011, or $0.18 per share.

The story is more intricate than this simple connection between jobs and stock price, and in no way should we be looking for companies to not be efficient or strive for profits.  But at this moment U.S. corporations are paying the lowest taxes as a % of GDP in our history (mostly due to the intricate tax maneuvers by our large multinationals), while deriving a maximum amount of profit per labor unit (humanoid).  [Of course small business is usually paying the most usurious of tax rates without offshore tax havens to arbitrage taxes down]  So it is the best of times… (if you own the capital) or the worst of times (if you are much of the labor).    And without large scale (non government. not building houses.) innovation and new productive ability in the U.S. that lead to jobs here in large scale – rather in Chindia, it is tough to make a case against those who believe the recession never really ended.

  • Over half of Americans, are of the opinion that the US is still in an economic recession, and expressed little confidence that it would improve over the next few months, a new CBS News poll has revealed.  The poll said that although the National Bureau of Economic Research has claimed that the most recent economic recession had ended in June 2009, 57 percent of the respondents do not think that way. Only 37 percent of Americans think the recession is nearly over.
  • Nearly a third of all Americans think the national economy is getting better, while 22 percent think it is getting worse and 45 percent think it is staying the same.
  • Three in four Americans continue to view the condition of the national economy as at least somewhat bad – about the same as last month – while over six in 10 say the same about their local job market.
  • Overall, nearly six in 10 Americans are at least somewhat concerned that they or someone else in their household will be out of work and looking for a job within the next 12 months, including a third who are very concerned.

Despite gasoline being a ‘relatively’ small expenditure it is amazing how much of an effect is is having as well.  Which is why the best thing the economy has going for it right now, is crude oil not spiking like foodstuffs.  Half of Americans are reporting financial hardships from $3 gas – that is astounding.

  • With the price of gasoline higher than it has been at any time over the past two years, 59 percent of Americans say that higher gas prices personally affect them a lot, while just 17 percent say higher gas prices don’t affect them much or at all.
  • Most Americans, 52 percent, say that recent gas price increases have caused financial hardship for their household, including 29 percent who say this financial hardship is serious.
About Mark Hanna 543 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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