The second item was found at cnbc.com. There, in an article entitled "Most Wealthy Americans Think US Is Still In Recession", it was reported that, "Wealthier Americans aren't very optimistic about the economic recovery, with a surprising 63 percent saying the US is still in a recession, according to a new poll. Some 55 percent think the economy won’t fully recover until 2013 or later, and 14 percent say the recession won’t end at all."
The last recession began at the end of 2007 and ended in late spring of 2009. It has been nearly three years since the end of the recession. GDP surpassed the pre-recession high in early 2010, so we have experienced over two years of expansionary growth since the last recession. GDP is today at an all time record high. Furthermore, after tax corporate profits exceeded their pre-recession highs in late 2009. Today corporate profits are at record highs, and increasing. In light of these stark realities, how can almost two thirds of the group that was polled come to the conclusion that the recession of 2007-2009 still continues? Even more incredible, how can 14% of those polled persist in their belief that the recession continues and will never end?
I believe a couple of things are going on here. The first is fear. Investors in the stock market are afraid because they have been through a time when they saw the value of stocks decline by 57%. That is a huge drop and even though they knew that losses are only realized when an investor makes the decision to sell, many investors made the foolish decision to sell, thus locking in those negative returns. Fear makes fools out of many people. People do things because they are afraid that they would never do otherwise. The stock market is not a place for the fearful. Those who sold out at market lows because they were afraid should never have been in the market in the first place.
The fear of market declines drives fearful investors to seek out "guaranteed" investment returns. The world is full of investment groups that will sell fearful investors an investment in which the return is "guaranteed". The one thing these investment groups (insurance companies and banks primarily) will not bother to mention to their clients is that to pay them a guaranteed rate of return they have to take the money invested with them and put it into the stock market. Insurance companies and banks know that the only place to get high rates of return over the long term is in the stock market. Insurance companies and banks are not afraid of market volatility. So, they invest their client's money in stocks, pay their clients a guaranteed return from the profits, and pocket the difference. That is a steep price to pay for fear.
The second thing that is going on here has to do with wanting to be right. I believe most conservatives hate President Obama with a passion. I further believe that most conservatives blame (wrongly, I might add) President Obama for the last recession. Conservatives look at the federal debt (a joint effort of both Obama and Bush, I might add) and determine that we are doomed. Like everybody else, conservatives want to be right. So they simply create an alternative universe in which the recession has never ended because Obama is still in power. It does not matter that none of the data supports their view.
I believe most liberals hated President Bush with a passion. I further believe that most liberals blame ex-President Bush for the last recession. Liberals look at the federal debt and blame Bush. Furthermore, liberals believe that President Obama can "fix" all of the problems started by Bush so he needs four more years to right the economy. The economy has to still be broken (even though it clearly is not) to justify calling for four more years to fix it. It does not matter that the economy is doing fine. Liberals create an alternative universe in which the economy is not doing well so Obama can be called upon to save us all.
In both cases folks are allowing their political prejudices to influence their view of economic reality. In other cases people are allowing their irrational fears to create their view of economic reality. In no case are these groups seeing the truth. Because of powerful erroneous presuppositions, Americans are stunningly ignorant about the present state of the economy. And many, if not most, of these people vote. Kind of makes you want to have a pre-qualification test on economics prior to allowing anyone to vote, does it not?