February, 2011After a year of increasing pessimism about the U.S. economy, the country's top economics bloggers see a bit of hope on the horizon in 2011, according to a new Ewing Marion Kauffman Foundation survey released today. Although 77 percent continue to describe the economy's overall condition as "mixed," "facing recession" or "in recession," 23 percent now believe the economy is "strong and growing" or "strong with uncertain growth" – an increase from last quarter.
"Economics bloggers continue to see ahead of the curve," says Tim Kane, the survey's director and a senior scholar at the Kauffman Foundation. "After previously anticipating the likelihood of the sluggish recovery, bloggers this quarter suggest smart growth strategies for the coming years. They are all for entrepreneurship, but say the way to accelerate innovative businesses is by reducing barriers, not targeted government spending."
With job growth an ongoing concern, bloggers this quarter were asked why high unemployment persists. An overwhelming 95 percent agreed that uncertainty is making firms reluctant to hire. They also cited structural changes in the demand for labor and a decline in aggregate demand. Asked whether they thought the recent extension of the 2001-3 tax cuts and the Social Security tax cuts would jump-start an economic recovery and job creation, a majority (66 percent) believe that those measures would be "effective" eventually, but not during 2011.
Survey respondents also took on the issue of the 2010 health reform bill. While opinions differed about whether it should remain or be repealed, seven out of 10 economics bloggers agreed that health benefits should be treated as taxable income.
"One of the drags on economic growth is runaway health care costs, which the bloggers point out is also a wedge on job creation and wage growth," says Kane. "Ironically, the solution to that is fundamental tax reform. President Obama's deficit commission called for treating health benefits as taxable income, and the Kauffman bloggers wholeheartedly agree."
Other research highlights include:
For this Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers, the Kauffman Foundation sent invitations to more than 200 leading economics bloggers as identified in the Palgrave's econolog.net December 2010 rankings. The Foundation surveys the bloggers each quarter about their views of the economy, entrepreneurship and innovation.
Eight core questions and four topical questions were designed in coordination with a distinguished board of advisors, which includes:
Robert X. Cringely – I, Cringely
Laurie Harting – Palgrave's EconLog
Paul Kedrosky – Infectious Greed
Lynne Kiesling – Knowledge Problem
Donald Marron – DMarron.com
Mark Perry – Carpe Diem
Wade Roush – Xconomy.com
Allison Schrager – Free Exchange
Nick Schulz – Enterprise Blog
Yves Smith – Naked Capitalism
Alex Tabarrok – Marginal Revolution
Mark Thoma – Economist's View