BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Persistent Anxiety Amid Market Fluctuations

Following
This article is more than 8 years old.

In his appearance on Meet the Press on Sunday, Peter Hart, the dean of the Democratic pollsters and one of the country’s premier analysts of the public opinion, described Americans’ mood as “one part anger, two parts anxiety.” This was before the market dropped 588 points on Monday and fluctuated considerably Tuesday and Wednesday. At one point on Monday, the Dow was down more than 1,000 points. Although most Americans are not active investors, following the ups and downs of the Dow on a daily basis, it’s hard to imagine they haven’t noticed this week’s gyrations in the global markets.

A great deal of the public’s current anxiety that Hart described stems from the financial crash in 2008. Our new AEI Public Opinion Study, Economic Insecurity: Americans’ Concerns about their Jobs, Personal Finances, Retirement, Health Costs, Housing, and More, traces opinions about these subjects and the public’s general economic attitudes since that critical point in time. In the preliminary reading from October 2008, The University of Michigan/Reuters Consumer Sentiment Index registered its largest drop in the 50-plus year history of the index. In late September that year, 41 percent of Americans said the recent trouble in the U.S. economy made them afraid. Americans feared the economic system could collapse, and they are still nervous about a repeat of the crisis. In a 2013 ABC News/Washington Post survey on the fifth anniversary of the crash, only 27 percent felt that country’s banks and financial institutions had taken adequate measures to prevent another financial crisis. Thirty-eight percent in another question were confident the country would be able to avoid another financial crisis in the future; 61 percent were not.

The crash did long-term damage to Americans’ economic outlook. One recent indicator of this comes from a June Fox News poll in which 22 percent of registered voters said the economy was in a recession, and another 37 percent in a downturn. Yet the country’s recession officially ended six years ago in July 2009. In May, 53 percent told the Pew Research Center that jobs were difficult to find where they lived. In another recent Pew poll, Americans believed, by 60 to 32 percent, that today’s children will be worse off financially than their parents. Americans’ attitudes have improved since the crash and its immediate aftermath, but people’s confidence in the economy and their personal finances remains weak.

There is evidence of global economic anxiety, too. According to a spring survey report, “Seven years after the beginning of the global financial crisis, a Pew Research Center survey of 40 nations finds that publics in fewer than half the countries [Pew surveyed] have a positive view of their economy.” In the United States, 56 percent said current economic conditions were bad, while 40 percent said they were good.

Nor are Americans confident of presidential or congressional leadership, and dysfunction in Washington contributes to their worries. In the latest CBS News poll, 44 percent approved of the way Barack Obama is handling the economy, while 49 percent disapproved. July surveys from NBC News/Wall Street Journal and ABC News/Washington Post also showed opinion of his handling the economy split. Congress’s ratings remain dismally low in all polls. In January, 66 percent said government dysfunction because Democrats and Republicans can’t find common ground was a major problem for the country. In a separate question, 47 percent said they expected the dysfunction to stay the same in the next year; 23 percent expected it to get better.

In his Meet the Press commentary, Peter Hart said that the presidential candidates were addressing the anger but not the anxiety. The anger is limited, but the anxiety is widespread and deep. Many Americans feel that their individual economic fate is increasingly tied up in our tightly knit global economy, and they feel they have little control over its long-term stability. Add to this their skepticism of political actors, and you have a recipe for persistent anxiety regardless of the market’s ups and downs.