Each Tuesday, ABC News reports its weekly Consumer Confidence Index, which gauges confidence in the state of the U.S. economy.

Not surprisingly, the CCI tends to track moves in other well known sentiment measures, including the Reuters/University of Michigan and Conference Board indexes, both of which are reported monthly.

However, the ABC data also includes a breakdown of sentiment by political affiliation, which yields some interesting results.

abcconsumercomfort

For one thing, Republicans have consistently maintained more confidence in the the U.S. economy than Democrats over the past two decades.

I assume this reflects the fact that Republicans tend to be wealthier and thus have benefited more directly from the long-running economic boom and bull market in financial assets (up until recently, at least).

The other observation of note is how much the spread between the two indexes widened out between 2000 and 2008 (it has since moved back towards the 20-year median).

Some might put it down to growing income inequality, the dot-com and housing booms and busts, or the ongoing wars in the Middle East.

However, it seems to me that the more likely catalyst was the fact that President George W. Bush was in office, or that the Republicans were running the show in Washington — or both.

What do you think?

Category: Economy, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

51 Responses to “A Difference in Sentiment”

  1. willid3 says:

    does it seem odd to any one else that Republicans were more confident during than Democrats during the Clinton years? or that during the so called boom years of the Bush administration they were really confident? and how does it now look as we look back knowing what we know today of how much of those boom years were a mirage?

  2. OkieLawyer says:

    @willid3:

    If you think about it, it’s not that surprising because:

    1) Republicans are more likely to be people of wealth, and therefore come from the investor class with financial cushions to ride out financial storms. Furthermore, the Clinton years were a boon to those who were able to invest in the markets.

    2) Democrats appeal to those who are part of the working classes (particularly the lower working classes). These are typically people who are going to more pessimistic in general simply due to any financial shock wreaking havoc on their personal financial condition.

    Have you ever noticed that the Tony Robbins-types always stress that happier people make more money? They have it backwards: people are generally happier when their basic needs are met. The reason being that once their basic needs are met, they can focus more time on pursuing interests that give them pleasure (art, music, philosophy, travel, etc.). When you are struggling to meet the basics, you will tend to be more pessimistic (there are more things that can ruin you financially and physically) — and therefore less happy overall.

    Does this make sense?

  3. bergsten says:

    From now on, I call shenanigans on any and all graphs without sensibly labeled axises.

    The last post had no y axis at all. These two graphs do have values, but they are (for all practical purposes) undefined. What’s a Consumer Comfort Index anyway? An index of what? 40 of what? People? Temperature? Percent fewer cavities? Fewer than what?

    These graphs were designed either for morons who only view the slope of the lines and vaguely glimpse conclusions (“up good, down bad”), or some “inside baseball” elite who actually work day in and day out with “Consumer Comfort Indexes.” I would think/hope that the local crowd is neither.

    OK. You know me. Of COURSE I looked it up — http://www.zaped.info/Consumer_confidence — you can too, though you’ll be sorry you did.

    Here ya go…

    Washington–ABC News Customer Comfort Index
    Washington–ABC News Customer Comfort Index represents a rolling boilerplate based on blast interviews with about 1,000 adults civic anniversary month. The analysis began in December 1985. The Base is based on consumers’ ratings of the economy, the affairs climate, and claimed finances.

    Methodology of the Customer Comfort Index
    The Base aggregates customer responses to three questions on the afterward topics: i) civic abridgment (“would you call the accompaniment of the nation’s abridgment these canicule as excellent, good, not so good, or poor?”, ii) on claimed affairs (“would you call the accompaniment of your own claimed affairs these canicule as excellent, good, not so good, or poor?”) and iii) affairs altitude (“considering the amount of things today and your own claimed finances, would you say now is an accomplished time, a acceptable time, a not so acceptable time, or a poor time to buy the things you wish and need?”). The Base is acquired by adding the abrogating acknowledgment to anniversary catechism from the absolute acknowledgment to that question. The three consistent numbers are again added and disconnected by three. The base can ambit from +100 (everyone absolute on all three measures) to -100 (all abrogating on all three measures)

    Does that sound like total horseshit or what? Feel smarter now? “Canicule”?

  4. Wes Schott says:

    …the dog days of summer

    @bersten, i’m with you on your call out on poorly defined axes

    there was one from early today from the Soc Gen dude saying gold was under-valued by some measure related to USD money supply and the quantity of US gold reserves

    …not that i disagree with that basic assertion

  5. The Curmudgeon says:

    Okay, I agree, the index is horseshit.

    But. I vociferously dispute that Republicans might have been happier because they had more money. They don’t have any more money than Democrats. Republicans have their share of the rich, but remember, Warren Buffett and Goldman Sachs, in addition to supporting small businesses w/ their paltry $500 million, also heavily support Democrats. There’s plenty of money amongst Democrats, even among the “core” such as union members. And $50,000/yr to be paid not to work is pretty sweet (e.g., the GM jobs bank), whether the work you aren’t doing is white collar or blue.

    I wonder though, would a GM worker have deeper feeling of satisfaction knowing that not only does he not have to work, the money to pay him not to work is coming out of the pockets of his taxpaying fellows? I imagine that might well make him orgasmic.

  6. thatguydrinksbeer says:

    Food stamps placate the Republican soul.

  7. sickmint79 says:

    per the book “who really cares” the average self-identifying liberal seems to make more than a conservative.
    per a (very) quick google search it seems that the average democrat may make more than the average republican as well.

    if not true, it would seem to be that they are at least very close – so i would find it very hard to account for the gap (which is quite sizeable) with much (if any) thought along the lines of “I assume this reflects the fact that Republicans tend to be wealthier and thus have benefited more directly from the long-running economic boom and bull market in financial assets (up until recently, at least).”

  8. philipat says:

    IMHO the most interesting part of the chart is at the extreme right axis, which shows that GNP has started to rise, whereas sentiment has decreased?

    This is perhaps indicative that the recovery is entirely statistical and in no way having any impact on Main street?

  9. franklin411 says:

    According to the Pew Research Center, the median annual family income for a Republican is $64,000. For Democrats, it’s $46,000.

    Okie is correct. Having more money means having more security which means having more time off which means having the ability to engage in leisure/recreation/social activities.

    http://pewresearch.org/pubs/1005/republicans-happier

  10. bsneath says:

    I think it has everything to do with the personal standing of the individuals asked. aka distribution of incomes and wealth.

    To link it to Bush is a bit too esoteric for my tastes and perhaps a bit too Manhattan/bi-coastal in perspective. Bush is not quite the ogre elsewhere in the USA, although I think it is becoming widely recognized that he was one dum-ass. This was clear to me when he sat on his thumbs while our financial system and economy were collapsing. Fu@king clueless.

  11. bergsten says:

    @TC — yeah. For all I know, the Base is acquired by adding the abrogating acknowledgment to anniversary catechism from the absolute acknowledgment to the question means that if you are a Democrat we subtract 50 from your answer.

  12. philipat says:

    And if you are a Sarah Palin follower we deduct 50 from your IQ?

  13. StatArb says:

    Standing in line , waiting for cheese …..

  14. MRegan says:

    I’m too dumb to know what those descriptions of sentiment mean. I would likely be better able to understand the import of data that describes specific economic behaviors according to political tendency. I for one have been accused of being a Fabian Socialist so I never borrow money and also zero out cc balances on a monthly basis. Other than a staggering karmic debt*, I owe nobody nothing other than dirty looks and disdain a la Ayn.

    * For starters, I have consumed dozens of cuyes (guinea pigs), chactados and otherwise, mmm qué rico, cuuuuuuuyyyyy…

  15. bergsten says:

    @philiphat — SarahPalinUSA has 32,721 followers on Twitter. Kind of shoots a hole in gbgasser’s comment that Twits, er, Twitter’ers are mostly conservatives.

    Anyway if 32,721 people have lowered IQ’s I don’t think we have a national crisis on our hands.

  16. Wes Schott says:

    …ok, you guys are falling into the ritholtz trap…

    when politics and religion enter the conversation it renders the brain incapable of rational discussion

  17. bergsten says:

    @Wes True, but look what it does to the comment count!

  18. Wes Schott says:

    i hear ya’ bergie, is there add revenue associated with this?

  19. bergsten says:

    @Wes — One would think so. Every time I use this Blog, I get a deluge of “block cookie” messages from things like questionmarket.com, specificclick.net, adtechus.com, etc. These must come from the ads.

  20. Thor says:

    I also don’t agree with the “republicans tend to be wealthier” statement.

    If that were the case the poorest states in the nation would be solidly blue, not solidly red. Some of the wealthiest states in the country would also not be solidly blue . . . .

  21. Wes Schott says:

    @bergsten-

    really, i don’t get that crap

    maybe we have different browser/cookie settings

    i’m using firefox, btw

  22. Init4good says:

    Could it be that Republicans, on the average, are more “religious” or put differently, identify themselves as having strong religious beliefs, than democrats?

    And that this belief accounts for part of the reason they see things more positively?

    I tend to believe to a degree, the notion of higher avg income allowing for more positive thinking, but it also may be that they make more money BECAUSE they think more positively about everything.

  23. Moss says:

    Re: If that were the case the poorest states in the nation would be solidly blue, not solidly red. Some of the wealthiest states in the country would also not be solidly blue . . . .

    Since wealth is so concentrated using a state is not pertinent, a county within the state is more relevant.
    I live in NJ always a blue state but the county I live in is red, always is, also happens to have a high per capita.

  24. bergsten says:

    @WS 8:16 — it isn’t the browser, it’s the tools. I kind of depend on these horrid computers for my livelihood and thus like to know about anything that’s mucking about under the covers. In this case, it’s something called a-squared that has its own black list and blocks certain cookies from certain sites.

  25. Wes Schott says:

    @bergie-

    …where the wild things are

    …i’m so paranoid from using windows-based systems over the years,

    that i’m reticent to downloads apps for my iphone

  26. bergsten says:

    Init4good — At least as far as the leadership is concerned, the Republican party is the party of the rich, and the Democrat party is the party of the celebrity. Propaganda to the contrary notwithstanding, religion really doesn’t enter into it, nor do “strong beliefs” (were they not strong, they wouldn’t be beliefs).

    Sorry, what was the question again?

    Oh yeah, seeing things more positively. I’d wonder about the wording of the questions…

    “Are you positive we are all well and totally screwed”?

    “Yes, I’m very positive.”

  27. bergsten says:

    @WS — Regarding windows-based (or for that matter, anything-based) systems, just keep on reminding yourself “it’s all junk.” Backup your critical data, and insure that the backups can be restored. The rest is plug and pray.

    As for iPhone apps, I’ve something north of 160 apps and have had no substantive problems with any of them (having said that, none are “games”).

  28. Init4good says:

    bergsten@8:33

    I disagree amicably. Religion enters into the “happiness” equation. Evidence “The Happiness Hypothesis” by Jonathon Haight. However, I agree there is probably no correlation between happiness and thinking less pessimistically.

    Yes I forget the question.

  29. OkieLawyer says:

    @Thor:

    It is better to divide the red/blue states into rural/metropolitan. There was an article entitled Retro vs. Metro.

    The retro states are less populous and have less economic power, but have a disordinate amount of political power (especially in the U.S. Senate) because of the way our electoral system and power structure is set up. So your red/blue analysis is inapposite here.

    @Init4good:

    There is some truth to the statement that people who have a positive outlook are more successful. But ask yourself: why do they have a more positive outlook?

  30. Wes Schott says:

    @init-

    ..i just flashed the image of a smiley face

    hare krishna’s

    moonies…

  31. bergsten says:

    @init4good 840 — no, actually we agree (I think I may have even read Haight). My intent was decoupling religion from party affiliation.

  32. Init4good says:

    Okie:

    I asked myself “I asked myself: why do they have a more positive outlook?”

    Is the answer because they have had more positive experiences throughout their childhood? And could that be because their parents are more “well-off” and could that be because their parents were more educated and because their parents’ parents were more “well-off? to begin with?

    If all that’s true, that’s a good reason why the republicans hold onto their money better than most democrats – so they can pass it down the line and make their kids’ and grandkids’ lives better – or at least so they can have a better “start.”

  33. Init4good says:

    Berg:
    decoupling religion from party affiliation……why is it that it seems to me republicans have more/stronger religious beliefs than democrats? ”’I actually just realized that I do think that, but I don’t know why.

  34. bergsten says:

    @init4good — maybe because everybody keeps on saying it’s so?

  35. algernon says:

    I don’t believe Republicans are wealtier if you exclude the Dem’s large welfare segment. They are more entrepreneurial, & therefore feel the the master of their own fate.

  36. Init4good says:

    nah…

    ….on living a religious life (64% of Republicans vs. 47% of Democrats say this is a very important priority). And, sure enough, Republicans are more likely than Democrats to be married (62% vs. 44%); and to attend religious services at least once a week (51% vs. 30%). They are also slightly more likely to have children (75% vs. 73%), though this difference is not statistically significant.

    Democrats, by contrast, place more emphasis than Republicans do on having a successful career (65% of Democrats vs. 55% of Republicans say this is a very important priority in life); on being wealthy (17% of Democrats vs. 9% of Republicans call this an important priority ); and on having free time to do the things they want to do (73% of Democrats vs. 63% of Republicans).

    But Democrats do not do as well as Republicans at matching their desires with their circumstances.

    For starters, they are not as well-off financially as Republicans. The February Pew survey found that the median annual family income for Republicans is about $64,000, compared with about $46,000 for Democrats.

    I found it here:
    http://pewsocialtrends.org/pubs/718/republicans-happier

  37. Wes Schott says:

    faith v reason

  38. Init4good says:

    algernon: if you exclude the Dem’s large welfare segment…….you have a point there

    and…more entrepreneurial, & therefore feel the the master of their own fate…..you may also have a point there as well…

    The whole social psychology stuff interests me…..and how it affects the markets.

    I should have been a “social economist”

  39. Init4good says:

    Wes Schott Says@9:18 pm

    “faith v reason” = repub vs dem?

    that thought has frequently crossed my mind…but I can’t prove it.

  40. Thor says:

    Okie – yeah, good points. I realized after I wrote my post that it didn’t really make sense :P

    Interesting comment Init – my grandparents were very good with money and did indeed pass it down their family. Republicans (although my grandmother did vote for Roosevelt).

    The religion making people happy comments I’m not so sure about. I’m not so sure about the whole Repblicans are happier than democrats. It could just be that Democrats or non religious people are more honest when reporting happiness. It’s a self reporting attribute – not something you can accurately measure . . . .

  41. Init4good says:

    time for bed…night all

  42. OkieLawyer says:

    @Thor:

    I live in the most religiously active state in the country. I can tell you that while people who are active in church may tell you they are “happy,” (ignorance is bliss!) religious leaders often try to placate their “flock” by telling them that justice is for the “afterlife.” I could talk a lot about this, but grow weary of discussing it because I get the feeling that no amount of knowledge I impart will amount to anything.

    I grew up in a fundamentalist church; but have long since rejected fundamentalism. However, I can tell you that it is all around me. I guess that I am an Orphan of God.

  43. Wes Schott says:

    …Okie,

    i ride road bike (bicycles)

    on the weekend we do pretty long rides at pace – 60 miles

    on sunday’s we get aggressive drivers that are dressed up in their sunday best, honking and cursing at us for slowing them down on the way to…wherever they have to be by 9 am.

  44. Darkness says:

    My personal sample by political affiliation during the 00s was the democrats thought the economy was an increasingly unsustainable mirage and the republicans (many to this day, and from all ends of the income spectrum from “just imagining obama as president gave us a recession in 2007 and that means it’s too expensive to bus to branson this year” all the way up to “letting lehman fail crashed the markets”) believe the credit bubble was real and sustainable. But the party of the leadership is definitely meaningful. Both parties believed in the dot com run up equally, with the dems always more skeptical… (i.e. more conservative, by the textbook definition of conservative).

  45. Darkness says:

    Does that sound like total horseshit or what? Feel smarter now? “Canicule”?

    My dictionary has: Canicular: of or pertaining to a dog, or Sirius, the dog star. LOL. You know, a survey of dog happiness would probably tell us a lot, pets see everything.

  46. Wes Schott says:

    …dog days of summer

  47. hue says:

    “I could talk a lot about this, but grow weary of discussing it because I get the feeling that no amount of knowledge I impart will amount to anything.”

    the more we know, the less we find it useful or practical. Okie, you might enjoy this from Kevin DePew:
    “There’s a truism about information that has long withstood the test of time and fortunes large and small, from the racetrack to the futures pit, and it is this: The more information you gather under conditions of uncertainty, the worse your decision making will be. It’s unorthodox, counter-intuitive, and difficult to accept, which is what makes it a truism in the first place. Otherwise, it would be a piece of information, and we all know how much that is worth. Ho ho.” http://bit.ly/6rmgWm

    people start out as democrats, with liberal ideals when they’re young. then they make money and become republicans. it’s a generalization, but i’ve seen it personally.

  48. miutbc says:

    gee, I wonder why there was such a huge drop in confidence just before 04? Was something going on just before the end of the year? I also don’t understand why there isn’t some mention of how republicans are flocking to states run, historically, by super bright democrats, like Michigan, New York, NJ, CA etc with their keynesian 1.5 multipliers from states like UT, ID, AZ, TX and FL. I’m mean, as an example of how much better government is at spending money than individuals, check out Michigan’s “cool cities” experiment.

  49. bergsten says:

    @hue — the way I heard it (and don’t go shootin’ the messenger) was: “If you’re twenty and you aren’t a liberal, you don’t have a heart. If you’re fifty and you aren’t a conservative, you don’t have a brain.”

    Attribution unknown.

    And, since we’re past the point of anybody reading this, let me throw this one in too at no extra charge:

    “When you’re 20, you don’t know, but think you do. When you’re 30, you don’t know, but know you don’t know. When you’re 40, you know, but don’t know you know. When you’re 50, you know, and you know you know, but it’s too late to do anything about it.

    Attribution also unknown.

    Guess where I’m “at”?

    @WS, Darkness — Yeah I also now know what “canicule” means. What I still don’t know is what in blazes it has to do with consumer confidence. Were I in charge and some (clearly) overly high-priced polling consultants handed me a report containing “canicule” (for WHATEVER reason), when I stopped laughing hysterically, I would chase them out of my office with an ax, then stop the check.

  50. hue says:

    bergsten, guess you’re at “you know, but don’t know you know.”

    it sounds like a rummy poem

    The Unknown

    As we know,
    There are known knowns.
    There are things we know we know.
    We also know
    There are known unknowns.
    That is to say
    We know there are some things
    We do not know.
    But there are also unknown unknowns,
    The ones we don’t know
    We don’t know.

  51. VA Voter says:

    It is also horsesh!t because there appear to be no internals, i.e. did they over/under poll certain demographics? There are any number of tricks that some political polsters use to skew the results. Unless and until the poll is run by Rasmussen, or someone of similar stature, the results are suspect.