… This post will not tackle the substance of Americans’ worries about the economy but instead highlights a puzzle arising from pollsters’ efforts to quantify those worries. I’ll show that, when Americans are asked specifically about the economy, in an apolitical context, they are for the most part not nearly as pessimistic as the conventional wisdom would have it. Instead, they answer more or less as they have done in the past at a similar stage of the business cycle. But, at the same time, when asked more generally about the way things are going in the United States, or about whether the country is going in the right direction, a strong majority gives downbeat answers, to an extent that is quite different from how they have responded in the past. Understanding the divergence between the replies to these two types of surveys is important, and I end the post with a few thoughts on possible reasons. CONT.
Ben S. Bernanke, Brookings Institution