Most Americans Fear Recession in the Next 12 Months, Poll Finds By Matthew Benjamin http://www.bloomberg.com/apps/news?pid=20601087&sid=avYkRibHRfDk&refer=home April 11 (Bloomberg) -- Most Americans expect a recession within a year and disapprove of President George W. Bush's handling of the economy even though the unemployment rate is at a five-year low, a new Bloomberg/Los Angeles Times poll found. Six in 10 who were surveyed predicted a recession, similar to the 64 percent who anticipated the economy would contract in a December 2000 poll by the Los Angeles Times three months before the last decline. In the current survey, 71 percent of those earning less than $40,000 said they expect a recession compared with about half for those making more than $100,000. ``We're living on borrowed time,'' said Andrew Herring, 43, a chemical engineering professor at the Colorado School of Mines in Golden, Colorado, who took part in the survey. ``We spend ridiculous amounts of money on the war and now we have issues with the subprime housing market,'' said Herring, a Democrat. Fifty-seven percent of those surveyed disapproved of Bush's handling of the economy and 38 percent approved, his worst showing in eight months. Nonetheless, 57 percent said the economy is doing well. That was down 11 points from January. The Department of Labor reported on April 6 that the economy added 180,000 new jobs in March and the unemployment rate fell to 4.4 percent, matching October's five-year low. On the minus side, gasoline prices have risen 29 percent since January and the housing market has cooled. Sixty-four percent of those polled said their own finances are very or fairly secure compared with 35 percent who described them as shaky. Pessimism ``People tend to be pretty optimistic about their own situation, but when it comes to the larger economy they're much more pessimistic,'' said Karlyn Bowman, a polling expert at the American Enterprise Institute in Washington. ``The public's just in a very sour mood because Iraq continues to cast a pall over everything.'' Americans are split on Bush's call to make permanent the $2 trillion in tax cuts he has pushed through Congress. About four in 10 favor extending the cuts when they expire in 2010, slightly more than those who oppose that idea. Sybil Haley, 72, a retired railroad worker in Hornell, New York, who supported the cuts, has changed her mind. ``It seems like they don't help middle-income people very much,'' she said. Fewer than four in 10 respondents earning less than $40,000 a year favor extending the cuts compared with slightly more than half of those in the over-$100,000 group, the poll showed. Taxes, Economy ``I certainly don't want to pay any more taxes,'' said Bill Shanks, 64, a Republican pastor in New Orleans who considers himself middle class and says his finances are very secure. ``When taxes are cut, the economy is stimulated.'' Almost three in five said the Federal Reserve should hold interest rates steady, twice the number who said the Fed should cut rates to stimulate the economy. Only 6 percent called on the Fed to raise rates to stymie inflation. The poll also asked who is mostly to blame for the wave of defaults among so-called subprime mortgages that are extended to borrowers with poor or limited credit history. Due to rising interest rates, the adjustable-rate mortgages threaten many homeowners with foreclosure. Fewer than three in 10 respondents said borrowers were mostly to blame and almost four in 10 blamed the lenders. ``These borrowers are looking to get a piece of the pie and they just got in over their heads,'' said Maryanne McCauley, 74, a retired secretary in Ozone Park, New York. Government Intervention One in five surveyed blamed government regulators for the subprime crisis. Half of those polled said the government should intervene to assist low-income borrowers facing foreclosure. Among those who earn $100,000 or more, 36 percent called for the government to take action and 63 percent of those earning less than $40,000 favored government action. The poll of 1,373 adults was taken April 5-9 and had a margin of error of plus or minus 3 percentage points. Most Americans remain sanguine about home prices, the poll showed, with more than half expecting homes in their neighborhood to hold their value over the next six months. Twice as many respondents said home prices will increase as those who predicted a decline. A majority said slowing home sales nationwide will hurt the economy. Black Americans are significantly more pessimistic about the economy and disapproving of Bush's handling of it than whites, the poll showed. More than four of five blacks said they disapprove of the job Bush is doing on the economy, compared with 53 percent of the white respondents. About four in 10 black Americans said the economy is doing well, compared with six in 10 whites. More than 70 percent of blacks expect a recession within a year compared with 58 percent of whites. ``African Americans continue to be very strongly Democratic as a voting block, and that polarization is even more evident when things are bad,'' said Nathan Gonzales, editor of the Rothenberg Political Report, a nonpartisan Washington newsletter. ``Their opinions are even more affected by things like the war in Iraq and Hurricane Katrina.''