Is it the economy, stupid?

Via Consumerist comes a report that consumer confidence is at a 14-year low, and 59% of Americans think we are in a recession already.

The traditional definition of recession is 2 quarters of declining GDP, which AFAIK hasn't happened. The other definition seems to be whenever the NBER says so, and I tried to figure out from their website if that was the case, but fell asleep looking at it.

But I can't help think that this is a vicious circle, a self-fulfulling prophecy, a case of the tail wagging the dog. Every time you turn on the TV or open a paper, there is some article talking about how bad things are going to be, and politicians left and right have been campaigning about how they are going to save us from high gas prices and subprime loans.

Now, there clearly are sectors of the economy that are in bad shape. Now is not a great time to be a realtor, a homebuilder, or to sell your house (although, with interest rates dropping and lots of people refinancing, it is a good time to be a mortgage broker). Gas prices are still high, which cuts into people's budgets, as well as Escalade sales. Manufacturing jobs are going away, but manufacturing jobs have been going away for decades, because it's cheaper to have our stuff made in Mexico or China.

Now, I'm not a great person to judge the economy. I work in the bubble that is higher education. When times are tough and people are losing their jobs, I get a 3% raise. When times are booming and people in private-sector IT jobs are tripping over each other to grab piles of money, I get a 3% raise. Personally, my financial outlook is great, but that's only because one of my coworkers broke his arm and I'm getting a bunch of overtime covering one of his shifts.

So maybe I'm wrong. But I can't help but think the reason people think the economy sucks may be because all they hear is about how much the economy sucks, and not because they themselves are doing all that bad.