Wednesday, June 18, 2008

The Post-Obama Post

After almost eight years in the wilderness, the Washington Post must be preparing for a liberal President, because today's front-page story on the economy was, well, half right:
Ask Americans how the economy is doing, and their answer is stark: It is not just bad, it is run-for-the-hills terrible. Consumer confidence is at its lowest level in almost 30 years. Only 12 percent of Americans think the economy is in good shape. On the Internet, comparisons to the Great Depression are widespread.

But the reality is different. According to most broad measures of how the economy is doing, it's not all that grim.

Soft? You betcha. In recession? Quite possibly. And a crisis in the financial markets has rattled nerves for months now. But so far, the economy is holding up better than it did during the last two recessions in 1990 and 2001. Employers haven't shed as many jobs, the unemployment rate is still relatively low, and gross domestic product has kept rising. Things are nowhere near as bad as they were in the Great Depression, or even during the severe recession of 1982-83. The last time consumers were this miserable, in May 1980, the jobless rate was 7.5 percent and inflation was 14.4 percent. Now those numbers are 5.5 percent and 4.2 percent respectively.

This paradox has created a unique challenge for those guiding the economy, who worry that Americans' pessimistic views will become a self-fulfilling prophecy. Two-thirds of the economy is consumer spending. So if people's negative outlook leads them to cut their spending, a steeper downturn could happen.

This has left economists trying to figure out why Americans' perceptions are so much more negative than the data analysts use to measure how things are going.
Oooohh (raises hand) I know the answer: pick me! It's the media, stupid. The MSM's been lying to anyone who will listen about the Bush economy since forever. But they're shifting into cheerleader mode, so suddenly, we're doing fine.

It's gonna be a long four years.


MaxedOutMama said...

Carl - the big wave is about to hit. Oil is pushing the global economy over and is about to push a bunch of corporate debt into default, cause global overcapacity in some mfrg sectors, and cause another round of hedge and investment fund failures, precipitating another financial crisis.

You should be happy though, because McCain just got religion. He's out there demanding to drill for oil and the Gitmo decision just woke the old guy up on judges.

Assistant Village Idiot said...

m-o-m. Among the many discouraging things about McCain, I will give him this: He looks at reality and changes his mind.

I am less pessimistic than thee about the economy.

Carl - yes, and the teacher never called on us when we were that excited, did she? There's a lesson there somewhere. Perhaps we should start pretending that free markets are a great hidden secret, known only to the Illuminati.

Carl said...

Along with AVI, I'm generally more optimistic about the economy, especially were Congress to reverse itself on ANWR and off-shore drilling, as M_O_M admits. But, finance remains a mystery to me, so I take M_O_M's pessimism seriously.

Agreed on McCain waking-up--if he also abandons his opposition to drilling ANWR.