America’s economy: glass half full?
Is it morning in America? Or is now a time for blood, sweat, toil and tears? As the United States warms up for the presidential elections, the choice between those two narratives will be the most important decision each party makes and may determine who wins in 2012.
Both are ways of talking about the economy — the issue that polls show overwhelmingly preoccupies U.S. voters. The morning-in-America storyline is that the financial crisis is over, the economy is healing and the country’s innate powers of renewal, reinvention and innovation are already asserting themselves. The blood, sweat, toil and tears view is that the U.S. economy is still sick and that it will take a significant, arduous and collective effort to nurse it back to health.
For now, the White House is committed to morning in America. That was the message of a discussion among members of the President’s Council on Jobs and Competitiveness that I moderated this week at the New York Forum, a high-powered annual gathering of CEO’s and politicians that is shaping up to be New York’s answer to Davos.
The most influential voice on my panel belonged to Valerie Jarrett, a senior adviser to President Barack Obama. Mrs. Jarrett has worked as a lawyer, chief executive and Chicago City Hall heavyweight. But her most important qualification today is as the confidante, consigliere and best friend of the Obamas, whom she first got to know two decades ago when she interviewed the future first lady for a job and wound up meeting her fiancé, too. Mrs. Jarrett has the president’s ear, and his back — and she is always on message.
That’s why her determined good cheer at the forum matters. “We have good reason to be optimistic,” she said. “We have great entrepreneurs and the capacity to reinvent ourselves. This is still the best country on earth.”
The other panelists, all members of the Jobs and Competitiveness Council, faithfully chimed in in the same key. Brian L. Roberts, chairman and chief executive of Comcast, the cable giant that recently acquired a majority stake in NBC, said a positive outlook was essential to “make America a great place to live and work. We all want that to be the outcome, so it’s critical to have a sense of optimism.”
Robert Wolf, chairman of UBS Americas, and one of Mr. Obama’s earliest supporters on Wall Street, agreed, and accused the news media of painting an overly bleak picture of the economy: “Since I sat here a year ago, we have two million jobs that have been created,” he said. “Exports have gone up by 10 percent and technology is booming, agriculture is booming. But when you look at the TV you hear what we are not doing well. I believe we have built a foundation and are on the right path.”
There are a lot of good reasons for the White House’s determination to tell us the glass is half full. For one thing, even though this president isn’t from Hope, from the very outset, hope has been central to his personal brand. That has been a smart choice — Americans are a generally cheerful folk and it has long been a political truism that the sunniest politician is the one who wins.
Perhaps more importantly, two and a half years after taking office, Mr. Obama owns the U.S. economy. That gives him and his backers a powerful incentive to cast it in the most positive light.
Finally, this is a White House of wonks and one of their chief enthusiasms is for behavioral economics. They have all read George A. Akerlof and Robert J. Shiller’s Animal Spirits — a book whose title refers to John Maynard Keynes’s famous line that markets are governed not just by hard data but also by the animal spirits of their participants — and they understand that confidence can be a self-fulfilling prophesy.
These are three powerful arguments for official optimism. But the strategy could go very badly wrong if the public doesn’t buy it. And so far, people don’t. The Rasmussen survey this week showed that just 26 percent of likely voters thought the United States was headed in the right direction; 65 percent think the country is on the wrong track.
That pessimism is the product of more than the TV shows Mr. Wolf excoriated: unemployment is still above 9 percent and more people than ever told Rasmussen that their homes were worth less than their mortgages. A separate poll, by Gallup, revealed that even people with jobs think now is a bad time to find good work: 86 percent of respondents said that now is a bad time to find a “quality” job. That number jumped to 93 percent for college graduates. Before the recession — in January 2007 — it was just 47 percent.
That grim view suggests that, notwithstanding their cultural inclination toward optimism, Americans today may not be in the market for happy talk. We may be at one of those rare historical crossroads when voters realize their country is in trouble and they prefer the leader who offers a bleakly honest diagnosis to the one who says everything is OK.
That was the magic of Winston Churchill’s famous “blood, toil, tears and sweat” speech. “We have before us an ordeal of the most grievous kind,” he said on May 13, 1940, in his first address to the House of Commons as prime minister. “We have before us many, many long months of struggle and of suffering.”
At the wrong moment, the audacity of hope can sound a lot like denial. Mitt Romney, the Republican front-runner, is already making that point. A Romney campaign video released earlier this month mocks the president’s assertion that “there are always going to be bumps on the road to recovery,” arguing that the 20 million Americans who have lost their jobs can’t be dismissed as mere bumps in the road
And so, the big question of the next year is this: do Americans want someone to reassure them they are still great or someone who admits things are awful?