Consumer Sentiment Reaches 28-Year Low

While the Conference Board Consumer Confidence Index is at a 16-year low, the University of Michigan Index of Consumer Sentiment is at a 28-year low (PDF). The index registered 59.8 for May. The last time it was this low was the 58.7 of June 1980, just a year after the stagflation-driven 44.1 of June 1979. I would say it might also be time to bring back another vestige of the era, a disco inferno, except all those polyester suits could probably be better used as an alternative energy source.

(Photo: Getty)

Comments

Edit Your Comment

  1. jscott73 says:

    Hmmm, lack of easy credit and living within one’s means does not sound all that bad too me, but then again I’m not a huge corporation.

  2. axiomatic says:

    “Consumer Sentiment Reaches 28-Year Low…” in other news, CEO pay is at an all time high.

  3. legwork says:

    Call it the deregulation inferno and you might have a hit.

  4. @jscott73:

    Or a small corp, they are just as bad on overextending themselves. Hey, the same could be said for a lot of consumers.

  5. firestarsolo says:

    The picture you chose for this article is priceless when matched with the headline. I can just see her saying “Oh lawd such high gas prices, how will I ever afford my new high heels?”

    Thanks for the laugh, guise!

  6. laserjobs says:

    25 years of credit expansion not matched by production gains, always end well!!!

  7. ViperBorg says:

    @axiomatic: +1

  8. MercuryPDX says:

    @firestarsolo: I “read” it more as: “Lord… help me stop my compulsive boutique store shopping.”

  9. BlackFlag55 says:

    Jimmah Carter, redux.

    You had to be there.

  10. mac-phisto says:

    @jscott73: The decline was
    due to surging food and fuel prices, falling home prices, shrinking employment and smaller income gains.

    funny, i don’t see easy credit or living within one’s means at all in the article. of course, you could extrapolate that increasing prices & falling wages makes it more difficult to live within one’s means.
    =========
    we could pull ourselves up out of this mess, but we have to stop relying on huge multi-national corporations to save the day. stop government subsidies to any company with more than $100 million in assets. create more incentives for small businesses & tie those incentives to employing workers. open up group bidding for insurance so small companies can afford to insure their workers.

    i could go on & on, but what’s the point. we don’t really want to change things, we just need a sideshow to distract you while we fatten our wallets.

  11. S3CT says:

    It’s kind of like those losers on CNN crying about how tough they have it. When you read about their plight you find that more often than not they have multiple SUVs, huge home and live 100 miles from where they work. Gas goes up a few bucks and all of a sudden their house of cards comes crashing down. Morons.

  12. jscott73 says:

    @mac-phisto: In the PDF that was linked to from the article they also mention “falling home prices, rising credit standards, and record levels
    of outstanding debt” they also say “Consumers have become more cautious spenders and are determined to rebuild their reserve funds.”

    Falling home prices equate directly to less easy credit for consumers, ala HELOCs, and rising credit standards do as well.

    People are now forced to actually pay cash for things they need/want while they build up reserve funds that, in their minds HELOCs were.

    @S3CT: I absolutely agree, even NPR does these stories about “real” people working hard to make it these days, it’s all bogus, if these people were living within their means to begin with and not living so high off the hog thanks to credit all these changes would make a minimal dent in their lifestyles.

    Living within your means, buying things with cash and having reserve funds is not a hard, oppressed lifestyle like so many people in the media are portaying it to be.

  13. egosub2 says:

    This is clearly the time for a searching, honest discussion of what a strange expression “Index of Consumer Sentiment” is.

  14. bohemian says:

    There is plenty of blame the consumer to go around. There are lots of people who live way too far from where they work (the 100 mile commute)and bought too much house. Then there was the meme that if you have “made it” you should eat out all the time, have every new cool thing *cough* stainless steel appliances *cough*.

    Does anyone remember how hard this crap was being pushed a few years ago? There was tons of social pressure on people to fit the “middle class image” that was wrapped up in all those things that are now crashing around us? That pressure was marketing generated and so many people bought into it that it became a social pressure too.

    I used to work for an ad agency and had a 5 year old econobox car. I can begin to tell you the kind of crap, ridicule and “you need a better car” I got at work all the time. I usual reply was mine is paid for what about yours and that shut most people up. My point is that there was so much of this in many places. Looking back it was kind of like the Stepford consumers.

  15. bohemian says:

    can’t, can’t begin to tell you..
    needs an edit button….

  16. ninjatoddler says:

    Things that could factor into this and in no particular order:

    1. Uncontrolled government spending for various side projects.
    2. Financing of expensive wars in the mid-east.
    3. The Mexicans are taking the shitty jobs, the Chinese with the manufacturing, the Indians with the call-centers, and the CEOs pocket the rest of the money.
    4. Inflation. I believe it’s over 4.3% now.
    5. Devaluation of the dollar to a 15 year low.
    6. Rise in energy prices since they are now floated for demand instead of pegged in direct relation to the dollar.
    7. Stores offering less for more monnayyy.
    8. The inevitable housing bubble bust.
    9. More stringent policies adopted by financial firms for lending.
    10. The realization that this country has been in recession since 2003 and now we’re mired in stagflation.

  17. spinachdip says:

    @bohemian: Ultimately, consumers are to be blamed, but I’m not sure if they had much of a choice in the matter.

    While consumers haven’t gotten any more or less sophisticated, marketers are decicedly more savvy about exploiting vulnerabilities and hiding costs.

    Plus, consumption was de facto government policy since the end of World War II. “Chicken in every pot and two cars in every garage” as anti-Communist dogma isn’t all that different from the President telling us to spend money to defeat terrorism. And it doesn’t help that the White House and the Feds pushed an unsustainable housing boom because that was the only sector that was showing any sort of growth.

    Combine that with the assumption of cheap gasoline, what was the average consumer to do?

  18. It really is sad, considering all the high tech that is available and the conveniences of Ecommerce and The Internet.

    Considering all the advances in Science and consumer technology in one generation - WHAT IS IT THAT PEOPLE WANT OUT OF LIFE!!!???

  19. ninjatoddler says:

    @SEARCH ENGINES: I think we all want better search engines.

  20. spinachdip says:

    @SEARCH ENGINES: Award-winning photo journalism, helpfully illustrated how-to guides, and the music that inspired a generation.

  21. SuffolkHouse says:

    Disco Inferno!!!

    Go Steve Dahl!!!

  22. ARP says:

    @ninjatoddler: This might be implicit in your comments, but add, an “I want it all, I want now” attitude that seems to be much more aggressive than in the past.

  23. ARP says:

    @SEARCH ENGINES: To eat Indian food and/or Chipotle every day for the rest of my life and to be able to run down one hipster on a bike that cuts in front of me without legal effect once every year; and to convince people that in the world of politics, being smart and elitist is a good thing.

  24. whydidnt says:

    Of course, what this doesn’t tell you is how much the negativity in mainstream media and sites such as the Consumerist contribute to the lack of consumer confidence. We keep hearing the media talk about a recession, yet we’ve had three straight quarters of domestic growth DESPITE the huge increase in oil prices and the housing market implosion.

    Anyone comparing this to the Ford/Carter years didn’t really live through that period in our history. I remember working at a S&L with NO liquidity. People would be approved for mortgages, but we couldn’t close the loan until the FHLB provided more funding. Often, we’d just get enough to fund 3-4 loans, despite having dozens waiting to close.

    ARP hit the nail on the head, people have “I want it all..” attitude and think when they don’t have it things are awful. Just because you can’t afford a new 60″ plasma TV and a new car every 3 years doesn’t mean the world is ending.

  25. spinachdip says:

    @ARP: I don’t think that attitude is anything new. It’s just that the internet, what with the sheer amount of information that we are exposed to and purchasing options, made consumption much speedier and easier. 15 years ago, before the world wide web,
    a) We had no way knowing about so many of the products available today
    b) The marketers had a much harder time reaching us
    c) Even if we knew about products, there was no guarantee it was sold in any b&m store within driving distance, and catalog shopping doesn’t have the same level of immediacy.

    And as I mentioned in my previous comment, marketers are tons more sophisticated than they used to be. They have a much better understanding on the vulnerabilities and motivations, and make more effective use of PR and non-traditional media and strategic tie-ins.

    For the most part, people don’t really change, and their behavior given a certain environment and stimuli are fairly predictable. It’s the playing field that changed dramatically.

  26. bohemian says:

    @spinachdip: Much of it is marketing sophistication and people just now playing catch up. How many people were convinced that they must have granite countertops, stainless steel appliances and an outdoor kitchen or they are living sub-standard and should be embarrassed. Don’t laugh. I know lots of them. They are the same ones that perpetually lease new Hummers and BMWs to keep up there image.
    It was the same thing with cars too many people were convinced the NEEDED an SUV because they had two kids, even though they lived in town. I blame that one on the Bush tax credit for a business vehicle over a certain tonnage. Since the SUV was big enough to get the big tax credit if you had any sort of business entity on your taxes, people were encouraged to by these gas guzzlers because they got a huge tax break (aka: money). Now they are worth squat, nobody can sell them and many can’t afford to put gas in them.

  27. mac-phisto says:

    @S3CT, jscott73, whydidnt: seriously? i wish i lived in the same bubble as you guys. unfortunately, i don’t. in my world, taxes are increasing 5-10%/year, fuel oil has doubled in price since 2004, gasoline has more than doubled, the electric co has received double digit generation increases since 2002 & most food has increased 10-20%.

    & i got a 3% raise.

    now, regardless of where i stand financially, those simple facts mean that i have lost ground. it’s costing me more to heat my home, drive my car, keep my fridge cold & fill it with food. that doesn’t make me very excited to go out & buy shit, now does it?

  28. DamThatRiver says:

    “I would say it might also be time to bring back another vestige of the era, a disco inferno”

    Nah, let’s just play a bunch of AC/DC, Van Halen, and Judas Priest’s British Steel (and any Priest album before that)

  29. Ssscorpion says:

    You think it’s bad? What if President Obama actually brings back Jimmy Carter’s economic policies (as he’s threatening to do?)

    /So stop your crying or Pres. O will really give you something to cry about.

  30. johnva says:

    @Ssscorpion: Which of those policies, specifically, are you referring to that Carter enacted and that you think Obama is going to bring back?

  31. spinachdip says:

    @Ssscorpion: FWIW, the average unemployment during the Carter admin years was lower than at the time of “Morning in America” speech, and poverty rate has never been lower since the mid-70s. Yeah, the oil crisis and the early 80s recession were a double whammy, but average economic growth rate under Carter was actually higher than under Reagan. So a return to Carter-era economic policies actually seems like A Good Thing! Or at least a Not As Bad A Thing As Many People Believe It To Be.

    @bohemian: I think consumption is part of the American psyche. For over a century, the national goal was to acquire and expand. Inefficient use of land was embraced, because the land was so vast and nature was something you conquered, rather than coexisted with, and size was a reflection of supremacy over nature.

    And you have the second half of the 20th Century, when the nation’s archenemies were people whose very essence was about communal ownership.

    The “I want it and I want it now” attitude is not the reason for the downturn. Well, it is, but it has always been the foundation of the American economy. The downturn is caused by a perfect storm of economic cycles, Greenspanian neglect, income inequality, and misguided policies.

  32. bohemian says:

    Personally I am seeing summer as a big sigh of relief. We spent 3 months having to keep our furnace running around the clock because it was below zero more days than it was above and windy the entire time. We have a newer house with better insulation, windows and furnace too. I can’t imagine how much these poor sots living in trailers forked out last winter. Plus we get slightly better gas mileage the warmer it gets, don’t ask me how, we just do as it gets warmer. So that is less. I have zero desire to buy anything that isn’t a necessity like basic food, things that will save us more money in the long run (like a couple of fans). Gas could jump another $2 easily if we have even the threat of a hurricane. Were in recovery, repair and savings mode for next winter.

  33. bohemian says:

    @spinachdip: The expectation of a certain type and level of consumption is and will be hard to un-do for lots of people. Your right about the expand and have more mentality. An aspect of that is good that it keeps people striving. But instead of striving for something that would be beneficial to themselves in the future or beneficial to everyone, people ended up striving for “whomever dies with the most expensive toys wins”.

  34. johnva says:

    @bohemian: I very much agree with you. I think our society is way too acquisitive, in general. I’ve got no desire to do that, and I’d be totally happy with a small house if someone would actually build them. Americans need to downgrade their notion of what a “normal” lifestyle is. Costs of everything are going up while wages have been flat for some time. Something has to give.

  35. S3CT says:

    @johnva:

    You can have a small house built or buy an older small home. Take the initiative.

  36. Noris says:

    @ARP: Will you be my friend and do you have a newsletter I can subscribe to?

  37. whydidnt says:

    @spinachdip:
    You must be thinking of a different Carter, than the one I am, Jimmy Carter — From Encyclopedia Britannica–

    “On the home front, Carter’s management of the economy aroused widespread concern. The inflation rate climbed higher each year he was in office, rising from 6 percent in 1976 to more than 12 percent by 1980; unemployment remained high at 7.5 percent; and volatile interest rates reached a high of 20 percent or more twice during 1980. Both business leaders and the public at large blamed Carter for the nation’s economic woes, charging that the president lacked a coherent strategy for taming inflation without causing a painful increase in unemployment.”

    Sorry, but we haven’t experienced anything like this in the last 4 years. Anyone hoping for a return to Carter Economic policies didn’t live through those years. I truly believe most people don’t realize how good they really have it. What with 2-3 color TVs, family plan cell-phones, cable TV, high speed internet, 2 cars in the garage, central air, etc. These are all things most could only dream of in previous generations. Yet, many still cry that it’s not enough — my point remains that it’s TV and web sites that keep telling us how bad we have it, so we assume it’s true. Even though it isn’t. It’s not THAT bad, but it’s just not as good as it was pre-2001.

  38. TechnoDestructo says:

    Marketroid bullshit newspeak.

    Rephrase everything you don’t like as though it is something bad. A decreased desire for stupid useless bullshit is “a lack of confidence.” You aren’t economizing, you LACK CONFIDENCE.

  39. spinachdip says:

    @whydidnt: The nation went through some serious stagflation in the late 70s/early 80s, and the recession was chiefly caused by the sharp rise in oil prices. While it may be true that Carter lacked coherent policies, I’m not sure any policy could have done much about either.

    My point isn’t to cheerlead Carter policies, but to show how misguided it is to use “OMG Carter!” as a scare tactic. Seriously, look at Carter’s numbers as a whole, and compare it to Reagan years and the Bush II years. Based on key indicators, “Morning in America” was slightly worse than the early Carter years.

  40. whydidnt says:

    @spinachdip:
    And we don’t have a sharp rise in oil prices now? What key indicators are you talking about? Inflation during Carter was awful, unemployment was awful– please don’t tell me you want to compare the worst unemployment during the Bush years to the Average of the Carter years. Interest rates were the worst EVER. By any stretch of the imagination, the Carter years were the WORST America suffered economically than at any time since the depression.

    Comparing today’s economy to the Carter years is almost laughable. Did you live through them?

    During the Clinton years unemployment rose to 5.6% and MSM said don’t worry, there are a lot of factors that go into this, things will be fine. Under Bush, unemployment increases to 5.0% and MSM says “THE SKY IS FALLING”, the economy is in the tank, etc. Average American Consumer hears this on the news, realizes he can’t buy that fancy new car he wanted and agrees, the economy is crap. It becomes self-fulfilling prophecy for the media to say the economy sucks, because people believe it and change their behavior, causing the economy to go into the tank.

  41. johnva says:

    @whydidnt: What you’re missing is that the so-called “Carter economy” was not caused by Carter’s policies. It was mostly caused by things outside of our control, like the oil crises.

  42. spinachdip says:

    @whydidnt: I’m not denying that the late 70s/early 80s recession was bad. I’m also open to suggestion that Carter policies were bad. I’m just hoping someone would point out the specific Carter policy(ies) that propelled the recession, and Obama is supposedly replicating (despite his promised tax cuts and market-based reforms, which sound awfully GOPish).

    Let’s do some bullet points:
    *It would be disingenuous to suggest Bush’s oil crisis is like Carter’s. As far as I know, the 70s oil crisis wasn’t something a lot of people warned against. OTOH, Bush’s oil crisis is largely self-inflicted. As early as 2001, there was a call for serious conservation policy, which was ignored by the White House. Instead, the administration maintained the SUV-friendly fuel economy standards and went into a misguided war that helped spike the price of oil. And remember Bush promising he could charm the Saudis into ramping up oil production? That didn’t quite work out when he asked this year.
    *In fairness to Bush II, he did inherit the dot com bubble and 9/11. But, the “Bush Boom” that less serious people point to hinged quite a bit on the housing boom, which the administration and Greenspan encouraged since that was really the only sector that was showing growth. Wonder how well that turned out.
    * Carter’s annual GDP growth was 3.4%. I believe that’s sliiiiightly higher than Reagan’s (though everything I’ve been able to pull up lists both at 3.4%), but compares favorably to Nixon/Ford (2.7%), Bush II (2.6%) and Bush I (1.9%). Clinton actually does better than Carter at 3.6%, if you’re scoring at home.
    * I really don’t find it useful to compare unemployment rates across eras, since they’re often not measuring the same things. Plus, they’re further unhelpful when we’re dealing with a long-term slump like Bush’s since you’re not counted as unemployed if you stop looking for work and/or accept a lower paying job. So it’s more helpful to compare payroll than joblessness.
    * That said, Carter’s average unemployment rate was 6.7%. Reagan’s was 7.2%.
    * It’s also disingenuous to suggest that the current downturn is about folks not being able to fill up their SUVs or buy a flat screen TV. It’s more about the disparity in wealth that’s been growing since the 80s, and families having to do without basic health care, for example.

  43. whydidnt says:

    @spinachdip:
    I wasn’t the one comparing Carter to Obama, but since you asked — Carter’s first initiative after election was an “Economic Stimulus Package” which included “middle class” tax cuts and a jobs program. This sounds quite similar to Obama’s plan to provide the “Making Work Pay” Credit, and create jobs. However, Carter’s other issue was that he worried more about unemployment than inflation. He embraced standard democratic policies and pushed forward with Social Security Tax increases and Minimum Wage increases, all as inflation continued to grow. It was pretty obvious Carter was unable to see the big picture and govern accordingly. Having said all of this, Carter’s biggest problem was really the lack of true policy that he followed through with, but he did get elected on a platform of “hope”. Sound familiar?

    Please don’t compare Obama’s “tax-cuts” to Republican proposed tax cuts. First, he doesn’t define the income level that will receive the proposed credit. However, judging by the language on his site — removing 10 million from the tax rolls tells you that the tax cut he proposes is simply another liberal redistribution of wealth. He’s proposing cutting taxes for people who pay very little taxes already. If he really wants to help “middle america” he needs to truly look at middle america includes all those SUV driving soccer moms in suburbia that the liberals seem to hate.

    Why is it acceptable for Carter to be surprised by an oil crisis, but in Bush’s case, the crisis is his fault. I would say the fault of the current situation lays squarely at the feet of the greenies that fight Nuclear Engergy, Coal mining/coal to oil conversion and extraction of oil from the NWR and off our coasts. We have the resources to greatly reduce dependency on foreign oil. However, that doesn’t fit with the liberal utopia of telling us we can’t drive SUVs, have to live in urban areas, and take mass transportation for “The good of mother earth”.

    As far as the description of the “downturn”, I don’t claim that the reason for the downtown is that people can’t fill their SUV’s, I claim it’s because of the perception that they can’t fill their SUVs. Certainly the economy is not as strong as it was 7 years ago, but it it is still growing. My point remains that the MSM creates as much of this issue as anyone by highlighting the negative when a Republican is in office, while burying the story when a Democrat is in office.

    The health care analogy doesn’t cut it either, more american’s are covered by insurance/medicare/medicaide today than back in the Carter days.

  44. cerbie says:

    @SEARCH ENGINES: a nice wooded/swampy plot maybe 15 minutes out of civilization, with a smallish studio-like house (I know there’s a proper name, but I’m not going to use your namesake and find it, now) made out of materials that aren’t toxic or bug-magnets, a garage to protect cars from stuff, broadband internet access, and enough time and money for a few hobbies, and good fresh foods. Oh, and for minor medical emergencies to not require months to dig out of.

    Most people want to look like they are better than their neighbors.

  45. Don Roberto says:

    Darnitt! and I just bought a house in Kiplinger’s number one best city to live play and work in for 2008! :)

  46. johnva says:

    @whydidnt: Provide evidence that Carter’s “middle class tax cuts” were the reason for the bad economy in the Carter years before you oppose Obama’s on the same grounds. And I personally am FOR “liberal wealth redistribution”. That’s the point of a progressive income tax. There has been way too much of a shift towards concentration of wealth under Bush, and this threatens our economy and our democracy.

    You also have not shown that Obama has a lack of true policy and that he won’t follow through. That’s just a variation on the “empty suit” meme.

    To address some of your other points:

    * Carter wasn’t “surprised” by an oil crisis. He knew it was coming, because it started before he was in office. I will agree that he maybe didn’t deal with it all that effectively in the short term, but I also think there was little he could have done, and that his policies were not the cause of the downturn. Bush II did help create part of our current high oil prices via his wars and refusal to enact effective energy conservation measures sooner, but a large part of it was also outside his control and caused by increased demand for oil in India and China.

    * Liberals don’t want to make you conserve energy just for some hazy notion of the “good of mother earth”. You make it sound like it’s some sort of weird religious idea or something. Actually, energy conservation is a matter of national security. High oil prices and our dependence on other countries are perhaps the greatest threats we currently face in the United State. We also do care about the environment, which apparently Republicans are okay with getting trashed (judging by their policies and votes in the recent past). Energy conservation can provide greater and more immediate gains for minimal loss than trying to increase energy supply. Finding and developing new oil sources or power plants (including nuclear power, coal-to-oil, etc) is very expensive and a slow process.

    * The real root reason that we are so dependent on oil and such is our lifestyle in this country. That needs to change if we are truly going to address the problem. We can find more oil, trashing more of our environment in the process (such as in ANWR, which would take years and years to come online and would only be a drop in the bucket anyway). But nothing is going to change until we stop cutting back on our need for so much oil. That will be a long-term process, which means we need to get started, and that we don’t need a Republican president to be undermining it every few years. Think about how much better off we would be now if Reagan had not canceled all of Carter’s plans for energy conservation and renewable energy.

    * Drop the garbage about the “MSM”. The “liberal media” is a myth. They didn’t create the public’s annoyance with Bush; Bush himself did.

  47. kborer22 says:

    On the other hand, The Consumerist sentiment is at an all time high!

  48. battra92 says:

    Funny thing is, I’m super optimistic about things right now, at least for me.

    It’s a fun time to be frugal. You seem like a guru or something to all the people who lost their shirt while you were working two jobs getting through college and saving every penny.

    What worries me is that Obama is so inept at economics that he might just kill this economy; kill it with fire and yet the Obamessiah will get votes. ~_~

    @whydidnt: Comparing today’s economy to the Carter years is almost laughable. Did you live through them?

    Agreed. Honestly, things aren’t great now but there is plenty of good news out there. It’s a downturn, sure, and serious attention should be paid to it (like increasing energy supplies with things like more drilling, refineries as well as going with economically feasible alternatives (nuclear, coal etc.) Work on the wind and solar and wave power too but not with government money.

  49. johnva says:

    @battra92: In what way do you think Obama is “inept with economics”? Will he be more inept than Bush has been with his ridiculous deficit spending and failure to stop the housing bubble from inflating (a large part of that was lack of effective government regulation)? Republican economic policies have not helped the vast majority of people in this country, even if you actually believe that they lead to increased GDP growth or something. What’s the point of a great economy if mostly only the richest people who own large amounts of stock benefit from it?

    And why do you oppose government investment in new energy technologies? The key to future energy security is going to be diversification of our energy supplies, so that we aren’t so dependent on any one source. That’s a national security issue, and certainly a legitimate thing for the government to work on. I agree that nuclear should be expanded but coal is questionable without widespread use of new environmental technology.

  50. battra92 says:

    @johnva: In what way do you think Obama is “inept with economics”?

    Raising taxes and creating big government programs never solves anything and that’s what he plans to do. It just gives big government an excuse to get bigger. Of course I have a beef with everyone in government for the last 75 years for this.

    @johnva: And why do you oppose government investment in new energy technologies?

    Let the free market decide. If they are great people/companies will buy them. I think the future of a lot of today’s ills could and should be decided more by the free market and not Al Gore or a bunch of stuffed shirts in Washington trying to get reelected on pork.

    If a municipality wants to invest in say a wind farm, go right ahead. I work for an energy company so I know a lot of these pie in the sky ideas aren’t all that they are cracked up to be, at least not as a viable alternative.

    Coal and natural gas are two things we have a lot of here in the US (or just off our shores) that we haven’t tapped yet so utilizing those, plus expanding our own oil production is crucial.

    The world will not and cannot for that matter get away from oil and fossil fuels anytime soon.

    If the government wants to spend more money on something, they can update our infrastructure especially the aging and decrepit power grid. That, in my view, is where the real future lies. What with Chevy coming out with the Volt and other companies looking at viable electrics we could be having a system where we recharge while we shop or eat at a restaurant. It’s not there yet, but I see myself driving an electric car before I reach middle aged. Heck, I just bought a new car last Sept so it may be that my next car is an electric.

  51. johnva says:

    @battra92: Raising taxes is not necessary being “inept with economics”. You’re defining “inept” as being policies that you disagree with. Personally, I think uncontrolled deficit spending (which has led to devaluation of currency for us all) is worse than raising taxes on people who can afford it. If we’re going to have expensive programs, like wars, we should pay for them now. During WWII our government demanded that people sacrifice for the war. They should do the same now.

    The problem with the “let the free market decide” approach is that it is biased toward the status quo and the short-term view. It’s business’ problem to deal with short-term problems; it’s the governments’ problem to deal with longterm energy security, because the free market fails to do a good job there. And it’s not like the government isn’t subsidizing existing energy resources anyway.

  52. battra92 says:

    @johnva: Personally, I think uncontrolled deficit spending (which has led to devaluation of currency for us all) is worse than raising taxes on people who can afford it.

    Who’s arguing on that? Both parties just want to spend all our money, just on different things.

    I’m for what was once part of the Contract with America that sadly never got passed which was that the government was only allowed to spend so much based on GDP (excepting defense of course)

    Seriously, Obama is just a suit with a teleprompter. I bet he really has no idea on economic models. If he did, he wouldn’t suggest raising capital gains taxes which would discourage investment.

    @johnva: During WWII our government demanded that people sacrifice for the war. They should do the same now.

    Different times, different scale of war.

  53. johnva says:

    @battra92: Raising capital gains taxes may discourage investment, you’re right. But the fact that they are much lower IS fundamentally unfair in some ways. It means that the richest people are paying much lower effective tax rates than many upper-middle-class people. Now, I do think there are arguments either way on this. But I can see Obama’s point on this. It’s ALSO harmful for too much wealth to become concentrated in too few hands, and that’s one of the results of the low capital gains tax rate.

    As for WWII, this current Iraq war is the most expensive war since then. Yes, the scale and expense is still lower. But it’s getting very high, and I think it’s about time we enact a special war tax for its duration.

  54. quagmire0 says:

    The free market decides everything – not government policy. The reason sensible people notice that prices are so high is because of the droves and droves of idiots that buy, buy, buy even when they aren’t using their own money. For every 1 person that actually shops, compares, and waits until something is on sale, there are 1000 (or more, really) morons buying things at full price or even above retail. It truly takes a giant change in people’s habits to bring about change in the free market. The best thing the gov’t can do is educate the masses and give the people with any sense whatsoever great vehicles and opportunities to earn and save.

  55. battra92 says:

    @quagmire0: For every 1 person that actually shops, compares, and waits until something is on sale, there are 1000 (or more, really) morons buying things at full price or even above retail

    Sadly government has not given them any reason to be accountable either. It sounds cruel but I’d like to see more people held accountable for spending more than they should and not saving when they should.