Leading Economics Bloggers Share Negative but Improving Outlook for 2012; Project Rising Employment in Next Three Years

Rossana Weitekamp, 516-792-1462, rossana@weitekamp.com
Barbara Pruitt, 816-932-1288, bpruitt@kauffman.org, Kauffman Foundation

Respondents support XL Keystone Pipeline approval, tax policy changes to spur U.S. economic growth in final Kauffman Foundation survey

(KANSAS CITY, Mo.), Jan. 31, 2012 – Despite a continued cloudy view of the U.S. economy, some top economics bloggers are beginning to see a ray of hope on the horizon. According to a new Ewing Marion Kauffman Foundation survey released today, 14 percent of respondents now believe the economy is "strong and growing" or "strong with uncertain growth," an improvement over last quarter.

For the Kauffman Economic Outlook: A Quarterly Survey of Top Economics Bloggers of 2012, the Kauffman Foundation sent invitations to more than 200 leading economics bloggers as identified in the Palgrave's econolog.net December 2010 rankings about their views of the economy, entrepreneurship, and innovation.

Looking ahead, only 33 percent now anticipate U.S. poverty to increase in the next three years, a significant positive change from previous surveys. Respondents also believe that employment and global output will rise faster than anything else and, surprisingly, some expect a higher marginal tax rate.

"Despite the constant headwinds facing the U.S. economy, bloggers are gradually tilting toward a net positive outlook. But it was the policy consensus that continues to stand out in the survey. We found majorities favoring higher inflation, more energy production, reforming Medicare and market-oriented changes to public education," said Tim Kane, Kauffman Foundation senior scholar. "Unfortunately, there were no easy answers to ongoing financial challenges, although 21 of the economics bloggers did offer a haiku about the Euro's fate in 2012."

When asked to identify policy options to stimulate the economy, top economics bloggers overwhelmingly supported approval of the Keystone XL pipeline, with 77 percent in agreement (25 percent strongly agreeing), and 75 percent favor opening up more domestic areas to oil and gas exploration and drilling. Other preferred policy recommendations included giving states flexibility to set their own minimum wage (67 percent agreeing) and the revenue-neutral adoption of a value added tax (58 percent agreeing). Opinion remained split on raising the top marginal income tax.

Other research highlights include:

  • A majority (63 percent) of respondents believe the government is too involved in the economy, despite the largely non-partisan identification of panel members.
  • No respondents to this survey characterize the economy as "weak and recessing," an improvement over previous surveys. 
  • Asked about the most desirable changes to the U.S. K-12 education system, five changes had over 70 percent support, the strongest being "more flexibility for principals to hire and fire," with 81 percent agreeing, half of those strongly. Respondents viewed "greater federal involvement" as the most negative of the options suggested, with 59 percent disagreeing.
  • More top economics bloggers blame Republicans than Democrats for the current political gridlock, but the majority didn't blame either party – or blamed both equally. Only 16 percent don't consider gridlock a problem.

This Quarterly Outlook features questions from five economics bloggers on issues ranging from the future of the Euro to the world shortage of safe assets. Respondents answered questions posed by John Cochrane, The Grumpy Economist; Arnold Kling, EconLog; Craig Newmark, Newmark's Door; Tyler Cowen, Marginal Revolution; and FT Alphaville contributing bloggers.

Eight core questions and four topical questions were designed in coordination with a distinguished board of advisors, which includes:
Robert X. Cringely – I, Cringely
Laurie Harting – Palgrave's EconLog
Paul Kedrosky – Infectious Greed
Lynne Kiesling – Knowledge Problem
Donald Marron – DMarron.com
Mark Perry – Carpe Diem
Wade Roush – Xconomy.com
Allison Schrager – Free Exchange
Nick Schulz – The Enterprise Blog
Yves Smith – Naked Capitalism
Alex Tabarrok – Marginal Revolution
Mark Thoma – Economist's View