In economics, the term, “sticky” means resistant to change. During a recession, employment tends to be “sticky downward” in that, while many firms, during the recession, lay off workers, the same companies are often reluctant to begin hiring again even as things improve. The result can lead to weak job growth during the recovery and even slow the rate at which things improve.
The trouble is that even as things get better in actuality, it takes businesses a bit longer to recover psychologically. Their confidence has been delivered a blow, and once lost, confidence can be very hard to regain. Since firms continue to feel poorer with wages and job growth not matching overall growth, we see longer than necessary levels of unemployment, along with inflation, as salaries, likely sticky downward as well, grow at a slower rate than the prices of goods. Quite unfortunately, this lack of confidence makes a bad situation worse, slowing recovery and making it significantly more painful.
During his campaign, it served Obama well as a candidate to paint a picture of a grave economy. After all, one of the strongest areas of his campaign, particularly for winning the votes of undecided independents, was his commitment to economic change. To highlight his own selling point, it was necessary to for Obama to employ fear, and create a narrative in which the Republicans single-handy destroyed our economy , and their candidate for President, John McCain, was naive and out of touch, even going so far as to call our economic fundamentals “sound” as late as September 2008. Implicit in that narrative was that as a nation, unless we elected Barack Obama into office, we were, in no uncertain terms, doomed.
While he won the election, Obama may not have done himself, or the nation, any favors. Despite Obama’s attempts to infuse additional hope into his messaging once he took office, the influence of his campaign rhetoric on public perception can not be easily undone. While the public may not have a clear understanding of how to fix the economic recession, they are growing increasingly displeased with Obama’s attempts.
Pessimism in the nation’s direction has risen sharply this past summer. A recent Washington Post-ABC News poll indicates that 55% of citizens see things as pretty seriously on the wrong track - up from 48% from April. And, similiarly, while sixty percent of people had faith in Obama’s ability to spearhead the initiatives necessary to end the economic recession when he took office, that number is down to 49% today.