We Run Our Finances Better Than the State Does
The order of the day is probably ‘I’m alright Jack’, as the Pew Research Center shows that in a 39-country analysispeople around the world believe that in the main their personal finances are doing better today than in the past. But citizens also believe that the governments of their countries are not doing everything in their power to remedy the situation of the worsening economies and that there is little optimism about the state’s ability to close the economic-inequality gap that is gaping wide. Citizens also believe that their own finances are better run than the country’s budget, which is all well and good but a country isn’t a household or personal finance, is it? After all, Margaret Thatcher tried to kick around the idea, foisting the belief onto the British people that you could run a country like a housewife ran the home, at least until the British economy was strung up and left to wither away.
We hear day in and day out that the economy here is going down the tubes, that the banks there are tying up the markets and exploiting them and that China is contracting, that Greece will be the ruin of the already-ruined European Union and the so the list goes on. It’s been the same for years now and doesn’t look as if it is set to change. But, it’s the developed countries, the Western nations that are the most displeased with what is going on in their economies. The research results show that people who live in emerging markets and developing economies have a more positive outlook and attitude to what is taking place in their countries. But, is that surprising? Perhaps they don’t know where they are going. But we have already been there, done it and seen it all. We know, perhaps where they are heading.
Gross Domestic Product
Gross Domestic Product across the board has seen a slowdown in activity since the global recession hit. But, it has, of course, been more severe in developed countries:
Real GDP growth in developed countries stood at 3.5% back in 2007.
It fell to just 1.4% in 2012.
In emerging countries is reached 6.3% in 2007, but fell to almost half that rate in 2012 (3.9%).
Developing countries saw the same sort of growth at 6.8% in 2007, falling to 3.6% in 2012.
Inequalities are a high priority for the western world where citizens of those countries (a staggering 80%) believe that over the period 2007-2013 there has been an increase between the wealthy and the poor in their own countries. But, overall, wherever it may be, there is an overriding sense that the poor have got poorer and the rich have raked more money in to become more income-powerful. Emerging countries believe (59% of their populations) that inequalities have worsened since the financial crisis. Developing countries’ citizens believe that the situation is worse than in emerging countries and that the income gap has increased for 70% of them. The majority of people in all of the countries polled by the Pew Research center seem to believe that the economy of the country that they live in is in favor of the wealthy. The figures throughout the 39 countries are around 75% and there are only three countries that stand out from that trend. Australia is one of them for example, where 51% of the population believes that the economic system treats the wealthy and the poor with fairness.
While 58% of those polled by Pew believed that their personal finances and their personal situation was overall doing well in advanced economies, the same people believe that their country’s economy is doing badly. People have a bad impression of how the economy is doing, but they believe that they are faring better individually, which seems like a contradiction. Or is it that people believe that they could do a better job than the majority of people who are actually running our economies today?
In 2007, 65% of Spaniards believed that there economy was doing well, whereas it only stands at a mere 4%today in 2013.
In the UK, that figure has also fallen from 69% who had a positive impression five years ago to just 15% today, despite what we are being told about the British economy picking up today. Whether the economy is picking up or not is largely immaterial. People do not have the impression that the figures are trickling through into their lives. There are 37% of the British that believe that the economy will get worse over the next year and 40% that believe that it will stay exactly in the poor state that it is at the moment.
Only 1% of Greeks today believe that the economy is doing well, which is far from surprising given the presentausterity measures that are being imposed by the troika (EU, European Central Bank and the International Monetary Fund). 64% of Greeks believe that the economy will get worse in the next twelve months and 20%believe that it will stay the same. There are still 14% of them that believe that it will improve in the next year, which seems almost impossible to the rest of the world.
The USA had 50% of those polled in 2007 that believed that their economy was doing well, which in itself reveals that even before the crisis there was a growing feeling amongst Americans of criticism of the economic climate. Today that figure has fallen by 17% to just 33%. 55% of Americans believe that the economy will either remain the same or get worse in the coming year, despite what we are all being told by the US government and the Obama administration about the fact that unemployment is falling.
Surprisingly in emerging countries the feeling is very much of a mixed bag, but on the whole it seems as if the outlook is being perceived much better than in the western world.
China had a percentage of 80% of its population that believed that the next twelve months would be better for the economy in 2013. Only 2% of the population believed that it would get worse. In recent weeks we have been told time and time again that the Chinese will be getting ready for a nosedive unless they get their shadow-banking problems in order and make structural changes to the economy and to society. 88% of the population believe that the economy is doing well in 2013, which is a 6% increase on 2007. There is a marked contrast between the way the population feels and the figures that are being published.
Brazil is also very upbeat about its prospects on the world economic stage. Brazilians believe (79%) that their economy will improve in the coming year and that comes along with 53% of the population that believe that they have done well to overcome the economic crisis.
Russians believe that they things are more or less the same regarding how good their economy is at the moment in comparison with 2007. Six years ago Russians believed (38%) that their economy was good, and that has only seen a slight drop to 33% today in 2013. However, the outlook also remains pretty dull for the future (next twelve months) since like the Western nations, Russians believe that the economy will worsen (18%) or stay exactly the same (53%). Only 24% believe that it will get better.
But, it’s the western world that is the most pessimistic out of all countries polled. Only 25% of the citizens in those countries believe that they are going to see an improvement in the coming twelve months. Surprisingly, the Greeks(64%) and the French (61%) are the worst out of all of the developed nations to believe that the situation will get worse. Or, perhaps, it might not be quite that surprising: the French economic health is intrinsically linked to that of Greece. While Greece is down in the dumps, France will be too, unlike Germany which has the economic output to stabilize more easily. Only 48% of emerging countries’ populations believe that they will see an upturn in economic activity over the coming twelve months.
In the opinion of the people polled, there are two main reasons as to why the outlook might be bad in the coming twelve months despite figures being published. The first is the rise in prices experienced across the board. The second is rising unemployment in some of those countries, or rising precarity of employment in the western world.
Europeans and Americans are dissatisfied the most with the economic performance of their countries at the moment. 65% of US citizens polled believed that the direction their economy was taking was the wrong one, while almost the same number believed that the British economy was also going in the wrong direction and were dissatisfied with that (68%). There were only two countries where more than 50% of the people were satisfied: Germany (57%) and Canada (55%). Countries such as Spain showed a level of just 5% of satisfaction and Greece stands at just 2%.
Wherever the people are in the world, emerging countries have a greater and more positive outlook with regard to their possibilities and where their countries will be in the next twelve months than the western world. Despite all their problems of political upheaval and demonstrations in Brazil or contracting economic output in China, those populations remain much more positive in their approach than the Western world.
Has the West become disillusioned with the future, when they look back at what has happened in the past?
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.