Economic Worries Finally Kick In

It took a long time for consumers to notice weaknesses in the housing and mortgage markets.

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What's taken them so long?

Why have American consumers been so slow to recognize important economic weaknesses? A new Reuters/Zogby poll answers that question, sort of.

In January of this year, a lobbyist acquaintance who made his living representing subprime lenders before Congress, the White House, and federal agencies watched in disbelief as his portfolio of formerly well-heeled clients began to disappear. Some companies just up and folded.

Others cut their lobbying budgets to pay more important costs, such as staff salaries. His steady, seven-figure annual "book of business" declined into the low six figures.

In early 2007, the Dow Jones industrial average hovered just above the 12,000 mark. And there were mortgage-market-based gyrations in February. But I sat in wonder earlier this summer as the Dow continued to rise eventually above the 14,000 mark, blissfully ignoring the turmoil of the housing market and the distress suffered by mortgage lenders at all economic levels.

This new poll shows us the worries have kicked in and revved up and won't be leaving us again anytime soon.

Reuters reports: "Most U.S. voters think the economy is in fair shape, at best, and will grow at a slow pace over the next six months, according to a Reuters/Zogby poll released on Wednesday. Troubles in the housing and subprime mortgage sector have somewhat eroded voter confidence in the economy and this spans across most income groups and political affiliations, according to the national survey of 1,020 likely voters."

So it's taken them longer than one would have believed, but now they've finally noticed. The next question is, whom are they going to blame? Democrats have a stellar opportunity to position themselves as the party of economic prosperity, particularly since former President Bill Clinton left office with a $127 billion surplus, which President Bush turned around in record time to a $300 billion deficit.

But are Democrats making that case? No. And the main presidential candidates' support of a continued U.S. presence in Iraq is unlikely to allow them to make that case anytime soon, since the war in Iraq is a major federal expense.