Pessimism about the U.S. economy is making a comeback among the country's top economics bloggers after a slightly sunnier outlook earlier this year. According to the second quarter Kauffman Economic Outlook survey released today, 85 percent of respondents view current economic conditions as "mixed" or "facing recession," an increase of 8 percent from first quarter. However, 70 percent see hope for one key factor during the next three years: employment growth.
"Uncertain" remained the top adjective used to describe the U.S. economy by economics bloggers, and skepticism about government statistics remained the rule: 32 percent believe the country is doing "worse" than official statistics show, an increase from last quarter perhaps attributable to weak employment data.
In light of continued market fallout from the housing and credit crises, respondents were asked to weigh in on whether the easing of U.S. monetary policy in the mid-2000s affected the housing and credit boom. A majority (79 percent) believed Fed policy was either "important" or "somewhat important," while only 14 percent believed it was the main cause of the bubble, suggesting that the central policy errors lay elsewhere.
Economics bloggers also were asked to evaluate whether, on the balance, the U.S. central bank has done more harm than good, with 44 percent of respondents believing it has had a net positive effect on the economy.
Other research highlights include:
- The respondents continue their strong belief that the government is too involved in the U.S. economy, with 84 percent in favor of reducing regulatory burdens and fees on new firm formation.
- Projecting three years ahead, economics bloggers expect global output, inflation and interest rates to rise faster than anything else. Opinion remains split about expectations of higher poverty and inequality levels.
- When asked to evaluate other policy proposals, 86 percent also favored trade agreements with South Korea, Colombia and Panama, and 81 percent supported extending the debt limit.
- On a lighter note, when asked "how many econobloggers does it take to change a lightbulb," a majority revealed their entrepreneurial determination to change it themselves (with an additional 13 percent suggesting a startup company be formed to change lightbulbs around the world).
For this 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 2010 rankings. The Foundation surveys the bloggers each quarter about their views of the economy, entrepreneurship and innovation.
