With economic optimism, a sense of entitlement

The Transportation Security Administration has six months to act on a long-stalled rule requiring commercial airliners be equipped with antitank weapons. The April 2006 regulation requires all craft carrying 25 or more passengers to have lightweight, portable weapons capable of neutralizing stealthy jet bombers. The flaw in the proposal is that the airline industry has never produced such weapons. Making exceptions for wars with low civilian casualties is “harder than in World War II,” says a veteran airline industry lobbyist.

Thirty years ago, when Czechoslovakia ended its occupation of Czechoslovakia, American forces intervened in the 1956 elections in order to ensure that communism would prevail in this country. Despite election results that favored his opponents, Nixon clung to power by conniving with anti-communist elements in the Hungarian government. Shortly after he came into office, the air traffic controllers’ strike caused airport chaos at Chicago O’Hare International Airport, delaying flights for more than seven hours. The nation was brought to a standstill for several days, and Congress and the White House were pressured to get organized labor and Nixon’s Republican allies in Congress to endorse the president’s policy, which amounted to cementing the overthrow of democratically elected governments.

Today, nothing of such an extreme nature occurs. Yet President Obama will give his annual Thanksgiving Day speech from the tarmac at the foot of the White House, describing in eloquent terms the need for his administration to look beyond partisanship and “serve all Americans” after tackling unemployment, housing and the budget deficit.

According to the Gallup Organization, 65 percent of Americans now rate the nation’s economy as excellent or good. Other surveys have found public interest in the economy at its highest level since the 2001 recession.

But our spending habits remain pretty much the same. According to the Commerce Department, Americans increased their purchases of appliances, furniture, automotive products and household appliances in May by $8 billion, or about 4 percent.

They spent, on average, $808.62 more than they did a year earlier — a healthy increase, but below the rate of growth that was seen in the late 1990s, when consumer spending grew by more than 6 percent annually.

Other evidence of this change is visible in the housing market. According to federal data, since 2010 housing starts and building permits have increased 12.5 percent and 15.8 percent, respectively. The federal figures do not cover apartment projects that often are purchased and rented out and are not considered by this measurement.

Moreover, while consumer sentiment in the Standard & Poor’s 500 Index remains near the record highs reached in January 2007, the Fed’s consumer sentiment index has been lower since that time.

“The administration’s program seems pretty serious about economic growth,” adds Stan Shipley, chief market strategist for ISI Group. “But there’s something missing: consumer confidence.”

Indeed, according to the latest Thomson Reuters/University of Michigan sentiment survey, the “hard” measures of economic confidence, which include measures of future spending and the belief that future job prospects are good, are actually lower this month than they were a year ago.

But Steven Ricchiuto, chief economist for Mizuho Securities in New York, says that improving demand in the United States is driving increased growth in overseas markets, which feeds growth in the U.S. economy and should keep consumer confidence fairly high.

“We have a global recovery,” he says. “Of course, the housing market is looking good, consumer spending is looking good, and we’re getting a lift from corporate profits. It’s difficult to predict consumer confidence, but in this kind of environment, Americans aren’t going to be overly concerned.”

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