Inflation, Uncertainty Remain High in Latest WSJ/NBC Poll

Americans are still plagued by concerns over the economy and inflation falls surprisingly high on that list of worries.

The latest WSJ/NBC News survey showed that 25% of respondents said savings are the number one concern for their families. But a close second, at 21%, was inflation. (Click here for the full story.)

The survey, conducted Dec. 5-8, comes just a few weeks after the news that October’s seasonally adjusted consumer price index fell 1% from September — its largest dive since the government started using seasonal adjustments in February 1947. And while inflation still exists for now, consumer prices are expected to continue falling.

So why worry? Much of it could simply be the fear of inflation returning at full force while families struggle through the economic downturn. Asked whether they are worried about inflation in the next year, 56% said they were very concerned. Asked the same about deflation, 47% said they were very worried.

The poll, which has a 3.1 percentage point margin of error, showed Americans are pessimistic about the current economy but still optimistic for the future. Over the past 12 months, 90% say the economy has gotten worse. But in the next 12 months 36% expected it to improve, 34% thought it will stay the same and 28% said it would get worse.

The number one issue facing the economy at large is unemployment, 36% said. The federal budget deficit was a not-so-close second at 12%.

Turning to the buffet of bailouts, 46% of people said they approved of the auto bailouts whereas 42% disapproved. While that could be good news for lawmakers who are moving closer to a deal, it should be taken with a hint of caution.

Back in October, 40% approved of a financial bailout now known as the Troubled Assets Relief Program, compared to 38% who disapproved. But in the latest survey just 27% approved of the program compared to 50% who didn’t.

Despite deep anxiety about the recession, respondents said, by 20 percentage points, that they are more concerned that the government will spend too much money trying to boost the economy and as a result will drive up the budget deficit, compared to those who worried the government would spend too little money and prolong the recession. –Sara Murray

How badly could a recession hurt cleantech?

from VentureBeat by Chris Morrison

It’s safe to say that the cleantech investors who pumped tens of billions of dollars into cleantech over the past three years didn’t expect a serious recession any more than anyone else. Yet with one on the horizon, it looks as if heavily funded technologies like wind and solar power could get hit from more than one direction.

The obvious danger is a slowdown in venture funding, as pointed out in a leaked Sequoia Capital presentation andthis contributor piece from Advanced Technology Ventures’ Todd Kimmel. Companies without large funding rounds to draw from will struggle to commercialize their products, especially mid-stage cleantech outfits, who need a lot of capital to move from pilot demonstrations to commercial installations.

More broadly, it’s questionable whether even the biggest companies will be able to tap into debt markets for ambitious projects like massive solar power plants in California’s Mojave Desert and San Luis Obispo County. Those look like safe investments that will be able to attract capital. But wind, which is a more proven technology than solar, is already having trouble getting enough capital, according to the WSJ Environmental Capital blog.

Another looming question is the price of oil. When oil was spiking upward, renewable energy looked like the obvious beneficiary. But a reaction was brewing in response to high pump prices: Falling demand. That promised to keep oil prices stable, but the fright in the markets appears to be causing a more serious contraction in oil prices. Today, oil fell below $80, marking a 13-month low.

As always, it’s impossible to predict with any certainty which way oil prices will head. But given a recession, continued low demand seems likely, and oil prices are set at the margin of supply and demand. While low prices are probably not permanent, consumers are notorious for their short memories. That means that in the interim, products like electric cars could lose some of their heroic aura. Biofuels like cellulosic ethanol, which look fine right now, could also suffer.

There are several other sectors that could be troubled, including green building materials — who would start construction now? — and water, which almost always requires a lot of money. But the final area that deserves special mention is carbon trading and emissions caps. The Associated Press reports that the Kyoto Protocol, which attempts to limit emissions worldwide, could be ignored as developing countries move to protect their assets.

At home, that could also be true. Take the Chicago Climate Exchange, for instance, which recently started up. Prices were higher than expected for its initial round of carbon offsets, but such commodities are likely to be viewed as luxury items in a recession. And for those who need excuses not to buy offsets, there are plenty of good ones, as Grist points out.