When Americans are asked whether they are doing all right financially, they answer yes. Huge majorities answer yes. There have been several polls asking folks whether they have enough income. Or whether they feel secure in their job. Or whether they are confident they will have enough for retirement. Etc.
People have been consistently positive. About their own financial situation.
So why do you suppose they badmouth the economy in which they live?
Consumers feel confident. In July they told pollsters they are feeling good about things to do with their own affairs. As a group they were more positive than any time in the last six years.
Yes. In spite of high gas prices all summer. In spite of a weak U.S. Dollar, which has pushed up prices of imports. In spite of the fact that a number of food prices - from milk to corn products - have risen. A majority of folks are telling pollsters they are happy campers.
And yet, the same sort of people tell pollsters the economy stinks. They reckon the economy is performing badly. More than two-thirds believe it is either in recession or will be shortly. They are sure the economy is hurting the poor, the middle class. They believe it is helping only the rich.
It should be no surprise that a majority of people say they, personally, are doing all right. There is a fair amount of data to support that.
But it surprises many of us that they have so little faith in the economy from which they have benefitted.
Why this contradiction?
I’m sure some economist has a “law” that describes this phenomenon. It probably has to do with information. Information people possess. And information they do not possess.
Imagine you run a machine in a huge factory. The factory is one of 50 factories your company owns, around the world. The company pays you well. It keeps giving you raises. Your supervisors assure you the factory has orders for work well into the future.
But you hear rumors. The guy at the next machine tells you he heard the company may be closing several plants. Another guy tells you some of the top dogs are thinking of moving elsewhere. Because they feel the company is going in the wrong direction.
Along comes a pollster. He asks how you like your job. “I like it fine,” you answer. “I am confident I will keep getting raises. And that we will have a lot of work for years to come.”
Along comes another pollster. He asks how you feel the company is doing. “Oh, not too well, from what I hear. This plant is fine. We’re secure here. But the rest of the company? I’m worried about it.”
Let’s look at sources of information. You know when you are doing well. You can see your factory buzzing. You can see the bonuses you get for overtime. Your sources of information are pretty good. Because to a large extent you are the source.
Meanwhile, your sources of information about the company are lousy. Not even second-hand or third-hand. You have only rumors to go on when you assess your company’s health. You are not privy to the various figures the company keeps. You don’t know company sales and profits. You don’t know how those figures compare with those from years past.
So you form your judgement on the company on what has been told to you. Rather than on what you have seen. Or heard from a good source. Or experienced.
Back to our economy. People tell pollsters they feel good about their financial health. They feel secure. They are comfortable with their jobs. They are confident of their financial future. The source for their information? Themselves, mostly.
Then they tell pollsters the economy is nose-diving.
Now, where do you suppose they get such thoughts? They get their information from the mass media. And most pundits in the mainstream media have been telling readers and viewers and listners the economy is lousy. For years they have. They scoff at good reports. Of which there have been so many. They ignore tons of good news. They love to pick up some scrap of bad news and build it into a huge issue.
“Consider the source.” did not become an adage by accident.
From Tom ... as in Morgan.
For more columns and for Tom’s radio shows (and to write to Tom): tomasinmorgan.com.
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