by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Randall Forsyth of Barron’s describes the “ironic triumph of hope” as Mr. Hope and Change prepares to leave office within the next week.
The enduring image of Barack Obama’s 2008 presidential campaign is the iconic red, beige, and blue pastel poster of him emblazoned with the word “hope” in big, bold capital letters. It is then no small measure of irony that measures of optimism—among financial markets, small businesses, and consumers—are at or near their highest, just as he is about to depart the White House.
The National Federation of Independent Business last week reported that its optimism index saw the biggest one-month increase since July 1980, rising some 7.4 points after November’s 3.5-point gain. That took the small-business confidence gauge to 105.8, the highest reading since 2004. “The December results confirm the sharp increase that we reported immediately after the election,” commented NFIB chief economist Bill Dunkelberg. “This is the second consecutive month in which small-business owners reported a much brighter outlook for the economy and higher expectations for their businesses.”
Consumers similarly are upbeat, with the University of Michigan last Friday reporting January’s preliminary sentiment index hovering near the 12-year high reached in December. “Both this measure and the Conference Board consumer confidence index are now back to levels last seen before the Great Recession, with recent moves by both showing that the election result is being viewed on balance in a very positive light,” writes Joshua Shapiro, chief U.S. economist at MFR. He also took note of the “unsurprisingly highly polarized” attitudes reflected in the University of Michigan’s commentary, which observed that “gains were accompanied by an unprecedented degree of both positive and negative concerns about the incoming administration.”