Contact:
Rossana Weitekamp, 516-792-1462, rossana@weitekamp.com
Barbara Pruitt, 816-932-1288, bpruitt@kauffman.org, Kauffman Foundation
Kauffman releases findings in its third 'Economic Outlook: A Quarterly Survey of Leading Economics Bloggers'
(KANSAS CITY, Mo.), Aug. 4, 2010 – Top economics bloggers are feeling a renewed sense of pessimism about the U.S. economy, according to a new Ewing Marion Kauffman Foundation survey released today. Sixty-eight percent of economics bloggers who responded to the mid-July survey described the economy’s overall condition as "mixed," with the rest split three to one toward an assessment of "weak" rather than "strong." Worse, only 5 percent of respondents believe the economy is "better than official government statistics show," while 47 percent think it is worse.
For this third Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers, the Kauffman Foundation sent invitations to more than 200 leading economics bloggers as identified in the Palgrave’s econolog.net December 2009 rankings. The Foundation surveys the bloggers each quarter about their views of the economy, entrepreneurship and innovation.
"Uncertainty is casting a shadow over the economy as well as the debate about the economy," said Tim Kane, senior fellow at the Kauffman Foundation and author of the study. "There is good news in the forecast, but it seems to have left the country. Expectations of global growth are more than double the projection for U.S. incomes. And bloggers’ frustration with Congress seems to have hit a boiling point as well, yielding a grade point average of 0.8 on a four-point scale, which is roughly half the grade point given to Wall Street firms."
Research highlights include:
- None of the respondents assessed the U.S. economy’s overall condition as "strong and growing." Overall opinion has shifted sharply negative since the previous quarter. Many bloggers acknowledged the possibility of a double-dip recession in response to a question from Econbrowser.com’s James Hamilton: the average probability among respondents was 44 percent.
- The bloggers expect the U.S. budget deficit to grow stronger than any other variable over the next three years. They also see higher poverty (doubled from second-quarter expectations) and inequality levels in the United States, meager stock market growth, and a slight decline in U.S. competitiveness. On a brighter note, three-year projections also include a relatively strong increase in global output.
- Respondents rate overall business conditions as "mostly fair, partly bad," but a majority (57 percent) believe conditions for small business in particular are "bad" or "very bad."
- A large majority—70 percent—of the surveyed bloggers say the federal government is too involved in economic matters, despite the largely non-partisan identification of the respondents.
- Only one of the 68 respondents supports a "tax on the product of foreign labor," a policy proposed by Andy Grove in a recent Bloomberg Businessweek commentary.
The third Quarterly Outlook also features questions from individual economics bloggers. Allison Schrager (Economist.com’s Free Exchange) asked about the equity premium and found that bloggers believe it to be worse than most pension models are prepared for. Virginia Postrel (Dynamist.com) asked about the viability of green energy and electric cars, and 58 percent of bloggers expect that "neither" will be viable without government subsidies ten years from now. Jeff Miller (A Dash of Insight) asked which elements of the "Bush era" tax cuts are likely to be extended, and the outlook was grim for dividends, capital gains and estate tax repeal.
"Most believe that a tax increase would choke off growth," said Miller. "The politics will be interesting, since a coalition to extend some or all of the cuts will be completely different from the party-line votes we have seen from the current Congress. My blogging colleagues surprised me a little with a small majority seeing the extension of some cuts. I expect more of the package to survive."
Eight core questions and four topical questions were designed in coordination with a distinguished board of advisors, which includes:
Robert X. Cringely – I, Cringely
Brad DeLong – Grasping Reality
Laurie Harting – Palgrave’s EconoLog
Scott Jagow – Marketplace Scratch Pad
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
