Baseball is 90 percent mental. The other half is physical.
— Yogi Berra
While the comic calculus of Yogi’s psychological mathematics may be suspect, his formula rings true.
Any batter who has tried to stare down a 90 mile an hour fastball in the hope of laying wood on leather will tell you it’s not just a question of physical skill. It’s also a matter of attitude and confidence.
This same mental maxim holds true for economy.
To the economy, consumer and investor outlook is frequently more important than the figures. The numbers may show that the economy is on the rebound; but according to recent surveys, most Americans still aren’t buying the forecast.
In fact, fresh polls show that Americans have grown gloomier about both the economy and the nation’s direction over the past three months, even as the U.S. shows signs of moving from recession to recovery.
On Black Friday last month, televised news images showed frenzied shoppers crowding the retail aisles as they searched for holiday bargains. Major chain stores like Wal-Mart pulled out the stops, opening their doors at midnight rather than the traditional 6 a.m.
Initial indications show that the retail numbers are up marginally over last year. Although hundreds of thousands of shoppers joined pre-dawn lines looking for deals on notebook computers or the latest electronic device, polls show a strong undercurrent of pessimism.
A Blue Christmas
Survey results demonstrate that these concerns have continued to put consumers in a miserly mood as they head to the mall for holiday shopping. Nearly half of those surveyed said they were planning to spend less on gifts than last year. Few buyers appear willing to run up credit card debt for Christmas.
Technically, the recession may be over, but the President is having a tough time winning the hearts and minds of everyday Americans.
Mr. Obama tried to address that economic anxiety yesterday, proposing new spending on the nation’s transportation system, tax credits to spur hiring by small businesses and incentives to make homes more energy efficient. According to the overnight poll results, most Americans were not assuaged by the President’s assurances.
Eight of ten Americans rate the continued risk of persistently high unemployment as their No. 1 concern. This public sentiment far outranks American’s anxiety over the burgeoning federal deficit and future tax increases.
To the chagrin of the President’s handlers, the mood of the country has trended remarkably more negative since he took office. A year into Obama’s Presidency, only 32 percent of polled respondents believe the country is headed in the right direction, down from 40 percent in September.
A Game of Many Numbers
Fewer than 1 in 3 Americans thinks the economy will improve in the next six months. They remain pessimistic that the government will succeed in reducing unemployment.
Americans have also grown increasingly cynical about the President’s $787 billion stimulus program, the centerpiece of his economic agenda. Three months ago, 49 percent said that the massive spending package had not helped the country. Today, 60 percent hold that negative view.
Although six out of ten say that President Obama inherited these problems from his predecessor, this hasn’t changed the negative cast of their attitudes towards his prescription for the economy.
Most analysts seem to agree that there is not much that any President could do to dissipate the dark pall dominating the American consumer psyche.
Despite his charisma and popular appeal, even FDR wasn’t immune from criticism. During the first three years of his Presidency, critics constantly questioned the effectiveness of FDR’s economic recovery policies and positions.
Even though there is little actual survey data from his time in office, there is plenty of anecdotal evidence that FDR, like Obama, faced similar levels of public skepticism about his ability to lead the economy out of its darkest hour.
Given this perspective, it’s increasingly clear that solving the nation’s long term economic woes may be as much about the numbers as it is about psychology.
Maybe what the President really needs is to get a helping hand from Dr. Phil. John Cohn is a senior partner in the Globe West Financial Group based in West Los Angeles. He may be contacted at www.globewestfinancial.com
