In the poll results, it is seen that 45% think the economic system is “fair” while 49% think it is “unfair,” with 6% having “no opinion.”

The poll also asks “Do you think the U.S. economic system is fair or unfair to you, personally?”

This issue of whether the economic system is “fair” is very important.  I believe that “fairness” of an economic system – especially that of one considered “capitalist” in nature – is a very complex issue.

While I have many thoughts on the issue, I will defer commenting on the issue of fairness of the economic system primarily because my comments would be exceedingly lengthy and complex.

However, for now, I will say that any discussion of fairness would include the concept of Moral Hazard, which I have previously commented upon.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1342.57 as this post is written

For reference, here are a few charts depicting this measure.

First, from the St. Louis Fed site (FRED), a chart through December, last updated on January 26.  This December value is 214,522 ($ Millions) :

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Here is the chart depicting the measure on a Percentage Change from a Year Ago basis:

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Lastly, a chart from Doug Short’s post of January 26 titled “Durable Goods Orders Up 3%, Beating Expectations” showing the Durable Goods New Orders vs. the S&P500:

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1313.01 as this post is written

Here are the excerpts I found most relevant, in the order they occurred in the speech:

Think about the America within our reach:  A country that leads the world in educating its people.  An America that attracts a new generation of high-tech manufacturing and high-paying jobs.  A future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world.  An economy built to last, where hard work pays off, and responsibility is rewarded.

We can do this.  I know we can, because we’ve done it before.

also:

…the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.

The defining issue of our time is how to keep that promise alive.  No challenge is more urgent.  No debate is more important.  We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same set of rules.  (Applause.)  What’s at stake aren’t Democratic values or Republican values, but American values.  And we have to reclaim them.

also:

Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last -– an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.

also:

On the day I took office, our auto industry was on the verge of collapse.  Some even said we should let it die.  With a million jobs at stake, I refused to let that happen.  In exchange for help, we demanded responsibility.  We got workers and automakers to settle their differences.  We got the industry to retool and restructure.  Today, General Motors is back on top as the world’s number-one automaker.  (Applause.)  Chrysler has grown faster in the U.S. than any major car company.  Ford is investing billions in U.S. plants and factories.  And together, the entire industry added nearly 160,000 jobs.

We bet on American workers.  We bet on American ingenuity.  And tonight, the American auto industry is back.

also:

Third, if you’re an American manufacturer, you should get a bigger tax cut.  If you’re a high-tech manufacturer, we should double the tax deduction you get for making your products here.  And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.  (Applause.)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1314.65 as this post is written

The poll asked various questions, including this one :

Would you say that you are financially better off now than you were a year ago, or are you financially worse off now?

An excerpt from the results, as discussed in the aforementioned January 18 release:

Nearly half of U.S. adults, 49%, say they are worse off financially today than a year ago, while 29% say they are better off and 21% volunteer that their finances haven’t changed. The percentage rating their current finances negatively compared with a year ago is down from the high of 55% recorded twice in 2008, but is still among the highest in Gallup’s four decades of measuring this attitude.

The chart shown in the poll results shows that the “% Worse off” results are notably elevated since latter-2008, relative to the other results going back to 1976.

While the question asked is somewhat subjective, these poll results seem to further support other information (much of which has been highlighted in previous blog posts) that despite an economic recovery/economic expansion (as officially designated by NBER) since June 2009 a large percentage of people in the United States are not seeing their personal financial condition improve.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1310.79 as this post is written

Doug Short had a blog post of December 27 (“Consumer Confidence at an Eight-Month High“) in which he presents the Conference Board and University of Michigan charts in a different fashion.  They are presented below:

(click on charts to enlarge images)

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There are a few aspects of the above charts that I find highly noteworthy.  Of course, the continuing very subdued absolute levels of these two surveys is disconcerting.

Also, I find the “behavior” of these readings to be quite disparate as compared to the other post-recession periods, as shown in the charts between the gray shaded areas (the gray areas denote recessions as defined by the NBER.)

While I don’t believe that confidence surveys should be overemphasized, I find these readings to be very problematical, especially in light of a variety of other highly disconcerting measures highlighted in this blog.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1263.02 as this post is written

I find these charts valuable as they provide a long-term history of each survey, which is rare.

Each survey chart is plotted in blue, below the S&P500:

(click on each chart to enlarge image)

Conference Board Consumer Confidence, last updated 12-27-11:

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University of Michigan Consumer Confidence, last updated 12-22-11:

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Bloomberg Consumer Comfort Index (formerly the ABC News Consumer Comfort Index) last updated 12-22-11:

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NFIB Small Business Optimism, last updated 11-8-11:

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As one can see, these charts continue to show subdued readings, especially when viewed from a long-term perspective.

These charts should be interesting to monitor going forward.  Although I don’t believe that confidence surveys should be overemphasized, they do help to delineate how the economic environment is being perceived.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1256.14 as this post is written

For reference purposes, here is Total Household Net Worth from a long-term perspective (from 1949:Q4 to 2011:Q3).  The last value (as of December 9, 2011) is $57.353 Trillion:

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1219.66 as this post is written

(click on chart to enlarge image)

As seen in the above-referenced CalculatedRisk blog post:

The Fed estimated that household net worth declined $2.4 trillion in Q3. Household net worth peaked at $66.8 trillion in Q2 2007, and then net worth fell to $50.4 trillion in Q1 2009 (a loss of $16.4 trillion). Household net worth was at $57.4 trillion in Q3 2011 (up $7.0 trillion from the trough, but down $2.4 trillion in Q3).

The Fed estimated that the value of household real estate fell $98 billion to $16.1 trillion in Q3 2011. The value of household real estate has fallen $6.6 trillion from the peak – and is still falling in 2011.

My comments:

As I have written in previous posts on this Household Net Worth (as a percent of GDP) topic:

As one can see, the first outsized peak was in 2000, and attained after the stock market bull market / stock market bubbles and economic strength.  The second outsized peak was in 2007, right near the peak of the housing bubble as well as near the stock market peak.

As seen on the chart, the Total Household Net Worth is making an upturn, but is significantly below the prior 2007 peak.

I could extensively write about various interpretations that can be made from this chart.  One way this chart can be interpreted is a gauge of “what’s in it for me?” as far as the aggregated wealth citizens are gleaning from economic activity, as measured compared to GDP.

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The Special Note summarizes my overall thoughts about our economic situation

While dynamics similar to those discussed in the segment have been noted in previous posts on this blog, this segment is yet another notable reminder of the changing economic condition and the growing need for food assistance.  This segment focuses on an area, Forsyth County, near Atlanta.

Here are some excerpts that I find especially notable:

But for more families here, prosperity is a pretense. The job’s lost, the savings are gone, and the big house is either in foreclosure or on its way. And just keeping food on the table is a struggle.

So Forsyth’s newly-needy file into local food banks.

Yesterday’s GIVERS have become today’s TAKERS.

also:

“The new poor could be you, me, your neighbor, your church member, somebody who has been affected by the economy,” she said. “Many of our people who have come for assistance used to be our donors. And they’ll say, ‘I never thought I’d have to do this, never in my wildest dreams.’”

also:

Nearly 15 percent of Americans are now receiving food stamps, a record level, and a jump of about two-thirds since 2007.

One in SIX Americans – 49 million people – say they have trouble putting food on the table.

At Forsyth County’s Lambert High, eight percent of kids now get free lunch, double the number three years ago.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1215.65 as this post is written

Here are various excerpts that I find most notable:

comments from Mike Duke, page 7:

While we feel good about the progress in our stores, our
customers remain concerned about jobs, and only one in 10 Walmart Moms that we surveyed view the state of the U.S. economy as good.  They want to save money. They’re juggling credit cards, using coupons, and skipping restaurants and vacations. There is a real sense
that the economic strain is taking its toll.

from Bill Simon, page 14:

Economic conditions in the third quarter remained largely unchanged.  Our core customer was still impacted by high unemployment and continued uncertainty over the economy, leading to declining consumer confidence. Although they remained higher than a year ago, gas prices, which positively affect customer trips, moderated during the quarter.

from Bill Simon, page 14:

Rising food costs continue to be a major concern for customers. We hear from some shoppers that they believe it will be more difficult than ever to afford holiday meals for their families.

from Bill Simon, page 14:

As others in the industry reported, customers continue to see food prices rise in key categories, such as produce, dairy and meat. Walmart continues to invest in absorbing some of these increases to ensure price leadership in our markets. During the quarter, grocery inflation was
approximately 4 percent, in line with what’s been seen throughout the industry. But given our price investment, the impact to our customers was substantially less.

from Bill Simon, page 16:

Customer feedback on the return of layaway has been
overwhelmingly positive and layaway transaction volume continues to exceed plan. Our customers tell us that they appreciate that we’ve brought back this service, and it’s a great way to help families on a tight budget shop for Christmas. As a reminder, we’ve added service fees to reduce layaway cancellations in the fourth quarter.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1247.72 as this post is written