Is Uncle Sam helping or hurting the economy? Americans are torn

Jul. 26, 2012
Is Uncle Sam helping or hurting the economy? Americans are torn
By David Lightman | McClatchy Newspapers

last updated: July 27, 2012 12:19:24 PM

Deep into the Great Depression, Americans cried out for help, elected Franklin D. Roosevelt in a 1932 landslide and marshaled in the era of big government. Facing a stagnant, inflation-torn economy in 1980, they rose up in a backlash against that big government by sweeping Ronald Reagan to victory.

Today, despite an ailing economy struggling to recover from the worst recession since the Roosevelt era, people show no signs of uniting behind any bold new approach. They split along many lines – income, geography, age, ideology. Older people see government with a big role in easing economic pain. Younger people are less inclined to look to Washington. Conservatives think paring the federal debt is a top priority; liberals, less so.

McClatchy dispatched journalists to a dozen states and commissioned the national poll to plumb the mood and temper of the nation, as its people approach one of the most crucial elections in generations. At stake is a path toward two distinctly different Americas.

The yen for unity is evident: 86 percent said the economy is a top priority, with support cutting across all ideological and partisan lines. Eighty percent also named the job situation as a top priority. And three of every four people think it’s more important for government to seek compromise.

But here’s the 2012 catch: 72 percent of Democrats thought the government should solve the economic problems, compared with 46 percent of Republicans.

The one thing that unites Americans from coast to coast this summer is anxiety about an economy that cannot gain its footing.

In California, self-employed real estate agent Jefferson McGee is still one of the casualties from the Great Recession. “I was selling seven houses a month before the recession,” said the 50-year-old from Sacramento. “Now I’m selling a home every seven months.”

Catherine Chestnut, 59, of Joshua Tree, Calif., is on disability and supports her boyfriend of more than a decade. After losing a manager job, her partner, Harry, returned to school, got a business management degree a few years ago but hasn’t found a job. They spend less, their frugality echoing through the neighborhood. “We’ve cut back on a lot of stuff,” she said.

In South Carolina, retired teacher Cynthia Carter, 64, of Irmo, summed up her feeling flatly: “This just isn’t working out.”

Americans rank the economy and jobs at the very top of their list of concerns this summer, according to the poll, which probed how Americans feel about the top issues facing the country and how they want to fix them. They divide, though, on whether they want the government to play an activist role ala FDR, or whether they want to cut back government ala Reagan as a way to stimulate spending by citizens and business.

The findings don’t suggest a smooth path forward. While people view the upcoming November election as having potential to make a big difference, they also harbor a skepticism bred by years of political paralysis. Republicans see the 2009 economic stimulus as barely keeping the economy afloat – and making big government even bigger. Democrats complain that the government isn’t doing enough

By one measure, Americans are evenly split over whether they look to the federal government or business to fix the jobs crisis.

By another, there’s skepticism about whether an activist government is the answer: 70 percent say cutting government spending is the best way to stoke the economy and create jobs, while 27 percent say increased spending is the answer. Even among Democrats, 47 percent support cutting federal spending to help the economy.

The search for solutions begins with the debate over government’s role. The momentum Roosevelt or Reagan could harness appears not only elusive, but a relic of a distant time.

Construction worker Brett Duval, for example, thinks it’s critical to get government out of the way to get the economy back on track.

“The only thing our government needs to do is to defend America and fight wars. That’s it,” said the 28-year-old father of three from Orlando, Fla.

“They are spending my money,” he argued. “If I got to keep more of my money, I would get to spend more money on other things to help the economy. I would upgrade my appliances, maybe put in some new hardwood floors in my house.”

Betty Herriott, 80, of Ventura, Calif., is relying on her pension to support her unemployed 58-year-old daughter, who just moved in. The two are struggling to pay for groceries and utilities.

“I blame the government for spending beyond its means,” said Herriott. Her one quick solution: Pare government regulation, which many say is strangling the economy. “Who doesn’t go to the beauty salon or a dry cleaner?” Herriott asked. They’re overtaxed and overregulated, she said. “Private business would be best at creating jobs, if the government stayed out.”

In Poplar Bluff, Mo., community college teacher William T. White, 56, wants the government to do more, not less.

“The government didn’t go far enough last time,” he said of the $831 billion stimulus package of spending and tax cuts enacted in 2009. “I think you have to spend money to get out of these things, and the government has more money than we do.”

In nearby Columbia, Mo., retired teacher Mildred A. Cooke, 82, wants another jobs program along the lines of FDR’s Works Progress Administration.

“Create a jobs program even if we have to spend some government money. There are so many things that need to be done in our country,” she said. “You go back to the WPA so that you have to get up and go out and do something for the good of the country. Handing out money is not the way to do it.”

This back and forth, talking past one another, two sides that keep failing to meet, characterizes much of the American mood today. Government’s the problem, government’s the solution. Spend more, spend less. Tax the wealthy more, don’t tax the wealthy more. These polarized opinions have been chiseled into the American psyche like rarely before, reinforced by like-minded strangers on chat sites or commentators readily available on the Internet and cable television.

And they feed the politics in Washington, sending resolute representatives to Congress, where they lurch from confrontation to confrontation, unable to agree on a budget or taxes, threatening shutdowns or credit defaults.

The McClatchy-Marist findings suggest lawmakers will have a tortuous time again later this year confronting mammoth economic challenges. Bush-era tax cuts expire Dec. 31, and automatic spending cuts mandated under the 2011 budget law take effect in 2013 unless Congress decides otherwise.

Where to draw the line? There’s no consensus, and no indication that one is about to form. The era of consensus government appears, if not dead, at least dying.

Nearly three out of four Americans want their representatives to compromise to find solutions to these economic challenges, according to the McClatchy-Marist poll.

"Congress needs to work together. That means compromise,” said Alexander Barket, 63, a technology professional from Lawrence, Kan. “The Founding Fathers didn’t intend on stagnation and gridlock."

“They need to work for compromise, except for some bedrock issues,” said Diana Doll, 73, of Modesto, Calif. “There are areas of wisdom in all the political parties. They need to combine all those wisdoms.”

But a vocal minority of 25 percent – including 40 percent of Republicans – want to stand on principle, regardless of whether that means gridlock that could lead to higher taxes, a government shutdown, or higher federal debt.

John Ostwalt, 43, a Statesville, N.C., attorney, was adamant: Republicans should stand by their principles.

“Compromise, that’s what’s got us in the mess we’re in now,” he said. “I don’t think we would go into deeper debt if we didn’t compromise. Compromising is what’s gotten us into deeper debt now.”

To Donna Frazier, 59, a retired schoolteacher from Excelsior Springs, Mo., who considers herself lucky because she has her retirement benefits, it’s time to look out for everyone else.

"Everybody ought to stand on principle until there’s bloodshed," she said. "At this point in time, these guys are going to have to get together and do something because there are some folks dying hard and fast out there."

Frazier’s view is widely shared, and the nationwide survey dramatically illustrated how the American political mood has changed in recent years.

For generations, Americans accepted compromise in order to make the economy hum. The willingness to give and get became the political engine that allowed the United States to become a more prosperous country in the 20th century. New ideas may have been born and nurtured in turmoil, but ultimately much of America came to accept them, and they usually worked to cushion the United States from deep depressions and abject poverty.

The McClatchy survey and interviews illustrated how Americans now live in a very different political era, one with no easy solutions in plain sight.