Voodoo Economics, MSM-Style
The magically morphing economy -- it really is whatever the MSM says it is at any given time. Check out these two stories to cross the transom this week.
First up, the Times of London actually has a headline that reads, "Thrifty families accused of prolonging the recession."
As Johnathan Pearce of Samizdata notes, the Times is partying like it's 1935:
This is a sort of reflexive crude Keynesian message at work; the laziness of the assumption that recessions are ended by people spending more - never mind where the money comes from - continues to hold a grip on the MSM. In fairness, maybe what the writer is trying to say is that saving is a good thing but if everyone saves "too much" (however one can define that), then in the aggregate, it drags everything down. But that does rather ignore the situation that has built up over the years, and the disruption to the economic system caused by excessively cheap credit. People who try to reduce their debt, save more and decide to forgo spending money they haven't got are not "prolonging the recession" beyond some point that can be marked down on a graph. The current economic Snafu was caused - as the author of this newspaper item must be dimly aware - by a country hooked on the drug of cheap credit, beguiled by the idiotic notion that whenever the drug wore off and the hangover kicked in, that that nice Dr Greenspan and friends would administer yet more of the drug, to get yet another high. That way lies the equivalent of liver poisoning.
It may seem a Scrooge-like message for this time of year to point out that you cannot spend money that you don't have; businesses cannot invest money that has not been already saved, and that interest rates must reflect the balance of supply and demand for savings. The "Austrian" economic insight that money is a claim on resources, and that two people cannot hold the same claim on a resource at the same time, needs to be relentlessly rammed home.
The best way to end a recession is to unravel the massive misallocation of resources caused by printing money as soon as possible, to let labour markets clear, to cut public spending and cut taxes, and where necessary, recapitalise banks speedily. (Check out this paper for a good course to steer). Such a process is inevitably painful. In the short run, the pain is worse than the sort of dragged out situation we have now. But ask yourself this question, dear reader: what is the more compassionate policy - a short, sharp recession and closure of failed banks, followed by a rapid 1921-like recovery, or a Japanese-style multi-decade of stagnation?
But hey, economic stagnation has its upside too, at least according to ABC, spinning furiously to put its best spin on the Obacession with a piece titled, "'All I Want for Christmas Is a Layoff' -- Why Some Workers Are Hoping Their Companies Will Let Them Go."
As Candance Moore of Newsbusters notes:
Ever since President Obama took office with his merry band of Democrats controlling both chambers of Congress, the media began reporting high unemployment in the most positive light they could find.
NewsBusters exposed one such trick by Newsweek on December 10 that found a silver lining for unemployed dads to reconnect with their children. ABC News posted a column on their website Thursday that advanced the cause even further: now people who still have jobs are hoping to get laid off.
Such was the case made by one Michelle Goodman in a piece cutely titled "All I Want For Christmas is a Layoff." The premise for this bizarre headline was that many Americans began to realize they were working for "slave wages" in jobs that were far too stressful, so perhaps the recession offered a chance to start over.
Voodoo economics? You're soaking in it. To paraphrase Sir Arthur Eddington, the worldview of the typical legacy media journalist is not only stranger than we imagine, it is stranger than we can imagine.