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Consumer confidence hits two-year high

One of the main arguments in David Brooks's column this morning was that "in times like these, deficit spending to pump up the economy doesn’t make consumers feel more confident; it makes them feel more insecure because they see a political system out of control." But Ryan Avent points out that the new consumer confidence numbers came out today, and "confidence among U.S. consumers rose in June to the highest level in more than two years."

Now, it may be that the deficit itself scares people even as the deficit-driven economic recovery is making them confident. But that just goes to the question of whether you'd prefer to have people worried about a deficit that's actually not a major problem or an unnecessarily deep recession that actually is a major problem.

By Ezra Klein  |  June 11, 2010; 12:56 PM ET
 
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Comments

The Brooks colums sounds like a variation of the George Will (and others) argument about regulatory uncertainty caused by federal activity (PPACA, cap and trade, card check, etc) spooking employers and investors, and exacerbating the slow recovery. I haven't really heard a good response to that argument, but it seems to me that most of the uncertainty is the result of the financial crisis, and that the net impact of regulatory uncertainty is marginal at best, considering the costs of not regulating.

Posted by: jduptonma | June 11, 2010 1:09 PM | Report abuse

They only feel confident, it's not real confidence.

Posted by: bdballard | June 11, 2010 1:12 PM | Report abuse

well since cap and trade, card check are off the table for now, why would people worry about them...

Posted by: srw3 | June 11, 2010 1:12 PM | Report abuse

Retail Sales Drop 1.2% In May! Maybe people are saving more?

Posted by: obrier2 | June 11, 2010 1:19 PM | Report abuse

They only feel confident, it's not real confidence.

That is the most nonsensical sentence I have read today. What is real confidence vs feeling confidence?

Posted by: srw3 | June 11, 2010 1:28 PM | Report abuse

Brooks' assertions about how people feel are simply assertions about how HE feels. He never goes out to check on people outside his magic circle of special friends. He has no insight into how people outside this special place feel. He does no research. He looks at no polls. He is a big fat zero intellectually. It is beyond me why anyone would call him a pundit except in the most mocking snide way.

Posted by: carolcarre | June 11, 2010 1:30 PM | Report abuse

hook, line and sinker!

Posted by: bdballard | June 11, 2010 2:00 PM | Report abuse

Y'know, I don't remember the right arguing this when Reagan and W, the greatest deficit spenders in US history, were breaking the bank.

Posted by: notagoth | June 11, 2010 2:11 PM | Report abuse

This is pretty much old-hat stuff from our elites. When they want to ask us to give them even more of our money than we're already giving them, for unnecessary wars, financial bailouts, fiscal austerity in the middle of a recession, they can never point to any objective reason why we should. But they always attempt to convince us that taking away even more of our financial security is necessary for the "credibility" of the system or "confidence" in it. One question they never want us to ask is for whose benefit the system is working and why we should support it. The obvious answers would be that the syetem works for the elites and there's no obvious self-interested reason why the rest of us would want to shovel even more of our money to them. So it's time to confuse us with magical thinking, credibility, confidence, etc. In a way, it is about confidence - it's a confidence trick and con job.

Posted by: redscott | June 11, 2010 2:12 PM | Report abuse

This makes no sense:
==============
But that just goes to the question of whether you'd prefer to have people worried about a deficit that's actually not a major problem or an unnecessarily deep recession that actually is a major problem.
========================

Many of us in America believe that the deficit is a huge problem. The lefties bashing Bush, such as notagoth above, seem to think that the deficit is a problem.

Those of us on the right who expressed our disappointment with the republicans in congress by voting them out seem to think its a problem

Posted by: skipsailing28 | June 11, 2010 2:21 PM | Report abuse

"Y'know, I don't remember the right arguing this when Reagan and W, the greatest deficit spenders in US history, were breaking the bank."

Reagan submitted balanced budgets that, admittedly, cut non-military spending. The Democrats insisted that the budgets needed to be laden with pork, or they'd never pass. So Reagan was a deficit spender, because that was the only way to get his budget in the end. The budgets he submitted on the front-end were balanced.

W. spent like a drunken sailor. Republicans in the house and senate under W. spent like drunken sailors. The Medicare entitlement alone was the largest expansion of government social spending since LBJ. There are some stark differences between Reagan and W. . . . and, yes, many on the right were complaining about deficit spending under Bush. You know who wasn't complaining about deficit spending under Bush? Any of the Republicans in congress. They didn't complain.

Posted by: Kevin_Willis | June 11, 2010 2:30 PM | Report abuse

Oh, and there's a reason consumer confidence is up, when all the real economic indicators are mostly down.

Only 6 months 'til November!

Ba-dum-dum.

Posted by: Kevin_Willis | June 11, 2010 2:31 PM | Report abuse

bdballard above: "They only feel confident, it's not real confidence."

The placebo effect is indeed important -- if someone "feels" good by killing, should we all applaud the killing? Shouldn't we say "Take PRIDE in yourself!" -- you have killed and fulfilled your goal?

The same is true of ObamaLogic: why not REWARD those who successfully lie and kill for "good"? If a lie results in profit for the majority, what is wrong with the lie?

Really, what makes the Goldman-Sachs approach a bad one?

Posted by: rmgregory | June 11, 2010 3:02 PM | Report abuse

it's weird that all the deficit hawks seem to be nuclear power cheerleaders as well. 20B per plant, 10 years to get approved and built. white elephants in 20 years for ever

Posted by: jackjudge4000yahoocom | June 11, 2010 4:56 PM | Report abuse

Also, there's reason to believe that this "Tinkerbell" theory of economics doesn't apply to fiscal policy at the zero bound.
Krugman talked about this last week
http://krugman.blogs.nytimes.com/2010/06/04/policy-and-the-tinkerbell-principle/

Posted by: adamguetz | June 11, 2010 7:38 PM | Report abuse

I'm still laughing about this one!

Posted by: bdballard | June 11, 2010 7:48 PM | Report abuse

The comments to this entry are closed.

 
 
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