We Are In a Modern-Day Depression

The crash in consumer confidence reflects the ineffectiveness of the president's policies.

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This is the dismal point we have reached today. Confidence in our government has fallen so far that a recent Gallup poll finds only 26 percent of Americans approve of the president's handling of the economy.

There is a sense that there are not too many effective tools left in the government toolbox. The era of frugality is back. Today it is not a stock market or residential real estate crash but a crash in confidence that will constrain the effectiveness of public policy and have long-lasting impacts on the consumer and, thus, on the economy. The historic American optimism has dramatically eroded. The Great American Dream is no longer a house in the suburbs. It is now a secure job, but almost any job will do.

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