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The Financial Trust Index has been tracking public sentiment toward the financial system for more than three years. And sentiment isn’t good.
In the latest release today, the survey found that just 23% of Americans say they trust the U.S. financial system. That’s as low as the earliest months of the economic crisis. And 62% describe themselves as angry, or very angry, about the nation’s economic situation — the highest level since March 2009. (The index is a joint project of the University of Chicago Booth School of Business and Northwestern University Kellogg School of Management.)
For its latest quarterly survey, the Financial Trust Index took its responses from average Americans to a series of economic assertions and put them up against the responses from an expert panel of economists. The results are striking:
Top marginal tax rate: On the factual assertion, “Permanently raising the federal tax rate by one percentage point for those in the top income tax bracket would increase federal tax revenue over the next 10 years.”
Economists: 100% agree with that statement (regardless of their political orientation)
Americans overall: 66% agree (50% of Republicans; 80% of Democrats)
Eliminating tax deductions: “Eliminating tax deductions on mortgages would lead to better financing by individuals.”
Economists: 85% agree
Americans overall: 35% agree (41% of lower-income households agreed, but just 23% of higher-income households)
“Buy American” provisions: “Mandates that Federal government purchases should be 'buy American' have a significant positive impact on U.S. manufacturing employment.”
Economists: 10% agree
Americans overall: 75% agree
Predicting the Stock Market: “Very few investors, if any, can consistently make accurate predictions about whether the price of an individual stock will rise or fall on a given day.”
Economists: 64% strongly agreed
Americans overall: 54% agreed. On this point, survey respondents who had at least a college degree answered more closely to economists — 70% agreed. And among people who make more than $75,000 a year, 63% agreed.
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Nassim Taleb equates economists with astrologers. It is an apt comparison. Economists gaze at pseudo mathematical formulas (chicken entrails, stars, etc) in order to divine the market (future, fortune, etc) that cannot be predicted. The economists in chiefs (Benny and the Feds) didn’t even see the mortgage crisis coming. What a sham bunch.
The 23% must be totally brain dead or just plain dead.
A lot of antipathy toward economists on this blog, but remember that every major business, investment firm, and sizable government agency employs economists to help them read the tea leaves of the economy. If employment is a sign of utility, then there is some demonstration of worth. I’m not an economist, but I respect the profession. I don’t find it difficult to believe that many Americans would have a different opinion than those in a profession rooted in rational analysis. What I do find amazing is the assumption by many classical economists that people are “rational actors”…
What do you call 500 economists at the bottom of the ocean ? – A good start !
Economists live in dream of estimating certainties about systemic issues for which no one can be certain. Americans live day to day with realities most of which they cannot control. Which is deluded?
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Real Time Economics offers exclusive news, analysis and commentary on the economy, Federal Reserve policy and economics. The Wall Street Journal’s Phil Izzo is the lead editor, with contributions from other Journal reporters and editors. Send news items, comments and questions to realtimeeconomics@wsj.com.
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Digg
The Financial Trust Index has been tracking public sentiment toward the financial system for more than three years. And sentiment isn’t good.
In the latest release today, the survey found that just 23% of Americans say they trust the U.S. financial system. That’s as low as the earliest months of the economic crisis. And 62% describe themselves as angry, or very angry, about the nation’s economic situation — the highest level since March 2009. (The index is a joint project of the University of Chicago Booth School of Business and Northwestern University Kellogg School of Management.)
For its latest quarterly survey, the Financial Trust Index took its responses from average Americans to a series of economic assertions and put them up against the responses from an expert panel of economists. The results are striking:
Top marginal tax rate: On the factual assertion, “Permanently raising the federal tax rate by one percentage point for those in the top income tax bracket would increase federal tax revenue over the next 10 years.”
Economists: 100% agree with that statement (regardless of their political orientation)
Americans overall: 66% agree (50% of Republicans; 80% of Democrats)
Eliminating tax deductions: “Eliminating tax deductions on mortgages would lead to better financing by individuals.”
Economists: 85% agree
Americans overall: 35% agree (41% of lower-income households agreed, but just 23% of higher-income households)
“Buy American” provisions: “Mandates that Federal government purchases should be 'buy American' have a significant positive impact on U.S. manufacturing employment.”
Economists: 10% agree
Americans overall: 75% agree
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