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Obama's Hope Making Consumers Feel Hopeless   February 13th, 2009
Consumer confidence drops for first time since November       

 
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It would seem that it's more important to President Obama to pass his spending package than to allow the economy to recover.

http://money.cnn.com/2009/02/13/news/economy/consumer_sentiment.reut/index.htm

Consumer confidence fell to its lowest in three months in February as sentiment grew increasingly gloomy over an economic downturn that most expected to last five more years, a survey showed Friday.

The Reuters/University of Michigan Surveys of Consumers said its index reading of confidence for February tumbled to 56.2 from 61.2 in January...

"Moreover, nearly two-thirds anticipated that the downturn would last five more years."


A quick review of consumer confidence:
    August 2008: 63.0
    September 2008: 70.3
    October 2008: 57.6
    November 2008: 55.3
    December 2008: 60.1
    January 2009: 61.2
    February 2009: 56.2
Not surprisingly, consumer confidence hit a low in November. As the bad economic news subsided, consumer sentiment started to improve.

Then President Obama took office.

After almost a month of the Obama administration, consumers are getting more pessimistic rather than less. Consumers are almost as pessimistic now as they have been at any time during the crisis.

Perhaps they don't trust Obama's economic plan... or maybe it's just not a good idea for the president to say things like "And if nothing is done, this recession might linger for years or "If we don't move swiftly to put this plan in motion, our economic crisis could become a national catastrophe." . Perhaps President Obama shouldn't have traded his message of "hope" for a message of "fear."

The stock market disapproved of the administration's message earlier this week. And this would appear to be a rejection of Obama's message by the consumers. Other than Obama's gloom and doom messages on the economy, economic news hasn't gotten particularly worse in the last month. In fact, more and more economists, the Congressional Budget Office, and the Federal Reserve are all giving indication after indication that the economy should turn around this year.

Yet, curiously, two-thirds of the people believe the recession will last five more years. Why would they believe that when more and more economists, the CBO, and the Federal Reserve have all stated that they expect a turnaround this year.

The truth is that the only consistently bad news has been coming out of the mouth of the president of the United States in his efforts to scare the American people into accepting his $800 billion spending bill. And, unfortunately, people are listening more to his economic fearmongering than to more cool and collected sources of economic information.

What if every time the news reported on Obama's latest fearmongering, the news also reported that, "However, despite the president's claim, experts in the field--including economists, the non-partisan Congressional Budget Office, and the Federal Reserve--are all expecting a turnaround later this year." How much of an impact on consumer confidence do you think that little tidbit of factual information would have on the confidence of consumers? And wouldn't a more confident consumer be spending more money?

President Obama should be ashamed of himself. His partisan efforts and economic fearmongering have nuked consumer confidence more than any other event other than the actual news of the financial crisis back in September. He's spreading a message of fear that is not consistent with more trusted sources of economic information.

The candidate of "change" has changed increasing consumer sentiment to falling consumer sentiment. That's not the kind of change we need in tough economic times--and it's because the candidate of "hope" has become the candidate of "fear."

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