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| Kamala Harris |
What if people feel optimistic?
Democrats may have a problem. Consumer confidence is up. Investor confidence is up. Farmer confidence is up.
It is a noteworthy thing when investment companies express worry. Investment commentary by money managers and brokerage firms have a bias toward things looking up. They manage investments. Pessimism isn't in their interest and it isn't their nature.
They are congenital optimists.
Morgan Stanley: "US Consumption Leading the Way."
It is curious to me that Morgan Stanley and others are putting up warnings that a recession is ahead, while warning that investors are optimistic and that markets likely too high because of it. Consumer confidence is high and markets going up because of it.
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| Americans are spending |
They write: "Ominous headlines suggest growing risk on corporate balance sheets, but don't forget about broader strength in the U.S. consumer." Then they list the many things that could go wrong, then continue:
"Lost in the headline noise surrounding the demise of corporations is this important fact: the U.S. consumer continues to function as the largest economic force in the world, representing approximately 17% of global GDP. This is greater than the entire GDP of China and more than the aggregate GOP of Japan, Germany, and the UK combined."
Farmers, too. Perdue University's Center for Commercial Agriculture is sharing a poll that reports the same curious sentiment among farmers. Notwithstanding the heavy rains that have delayed planting, and the trade disputes that that damaged the export market in soybeans, they report farmers are optimistic and their optimism is rising.
"The improvement in farmers’ sentiment occurred in the midst of this spring’s corn and soybean planting delays in the nation’s mid-section, which is expected to lead to unprecedented levels of prevented planting claims for both corn and soybeans. The prospect of large prevented plantings, combined with expectations for yield reductions attributable to delayed planting, pushed both corn and soybean prices up sharply since the May survey was completed, which contributed to the sentiment improvement."
Farmers expect prices to be better, farm income to be better, and farm land values to be much higher in five years. Things are looking up.
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| CBS Headline |
Democrats have another message. People are hurting.
Kamala Harris was the big winner in the Democratic debates. She looked strong to many Democrats, she looked like she could take on Trump, and she had a message people seemed to like.
She had a message on race, but also on a message of American economic fragility. She cited a statistic that is now a frequent element of candidate speeches for all Democrats, that some 40% of Americans are one paycheck or one $500--or $400--automobile repair from disaster. Democrats have a message that Trump has helped the rich but not the average person, and that the economy is both weak and fragile.
Harris put it this way in April: "It's clear in our country right now, almost half of American families are a $400 unexpected expense away from complete upheaval."
It is entirely possible that it is all true, that American consumers are feeling very confident and, simultaneously, they are only one paycheck away from financial disaster. It is the nature of bull markets for people to be foolishly comfortable with risk. Optimism. Confidence.
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| Click: U of Michigan Consumer Confidence Survey |
That is the problem for Democrats, if the current period of hightened optimism persists. Democrats do not need the economy to get worse. They don't need a recession, but they need voters to start worrying about it. They need consumer confidence to falter. They need voters to quit trusting the "Trump economy."
Democrats who take comfort from Gallup polls of Trump's Approval/Disapproval number are looking at the wrong thing. Look at the consumer confidence number. People are feeling pretty good about the economy, even in the face of trouble.
I trust what they do at stores, restaurants, and car dealers more than I trust what they tell a pollster.
2 comments:
test
Yes, unfortunately just like 2008, it may take a downturn to motivate people to consider Progressive policies.
We are in uncharted territory with the current expansion, but many of the same principles apply. Mainly, it becomes increasingly difficult to continue sustained growth...the numbers get too big. If consumers get queasy and stop borrowing and spending and not saving, one reason being low interest rates don't encourage it and another that the cost of living is growing faster than wages, that alone could trigger a recession.
Of course, not all voters strictly "vote their pocketbooks". It might be possible that dislike of Trump may be a big factor in motivating likely Progressives, and it's possible some scandal will be the long awaited tipping point for some Trumplicans. It's my sense they are fickle and likely to bolt in the light of dropping approval numbers.
Too early to tell....
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