...The “fiscal cliff” debate (a 9.7 point drop) and the 2011 debt ceiling showdown (15.8) fit neatly into that category of signal events, a remarkable reflection of how what happens — or, more accurately, doesn’t happen — in Washington reverberates around the country. (One remarkable factoid: The drop in consumer confidence during the “fiscal cliff” debate was larger than the one that followed the Sept. 11, 2001, terrorist attacks.)
The Michigan Index is not alone in showing the drastic impact on confidence that the seemingly endless fiscal fights in Washington are causing. In the summer of 2011 — at the heart of the debt ceiling debate — Gallup’s Economic Confidence Index showed a score of -54. (The lowest possible number is -100, the highest is 100.) At the end of 2012, confidence dipped again in the Gallup measurement — down to -22.
Now, it’s not all doom and gloom. Of late, the Michigan Index has been showing increased public confidence, hitting a three-month high of 76.3 this month. And, the Gallup number reached as high as -8 earlier this month —a five-year high— before dipping back down to -13 last week.
But, a look at the longer trend suggests that the country is in the grips of a broader crisis of confidence that Washington is making worse. Looking all the way back to 2008 when Gallup began testing economic confidence, the organization has never — repeat, never — turned out a positive confidence score in its daily tracking polling. And, as McInturff notes, the country is now in the midst of a historically long run of low confidence. It has been 59 months since the Michigan Index dropped below 65 and it has never been back above 85....