One of my favorite items at Instapundit recently is the series called “Dude, Where’s my recession?” (for example, here, here, here and here: I may have missed some).
For those dedicated to presenting all the bad economic news all the time, those columns make for painful reading. Economic Armageddon was supposed to be upon us, but the facts keep forgetting to toe the line. “Consumers boosted their spending at a 1.5 percent pace in the second quarter. That was up from a 0.9 percent growth rate in the first quarter and marked the best. . .” Oh, dear. “Retail sales jump by largest amount in 6 months. . . . Analysts were surprised by the solid increase in retail sales and noted that sales in April were also revised to show a. . .” Why, it is enough to make an hysterical pessimist lose heart.
Of course, it’s axiomatic that the guys out of power believe–or at any rate say–they can handle the economy better than the chaps in power. But that understandable bit of partisan stump-talk has leached into the reporting of the news. No one disputes that there has been an economic slow down; no one disputes that credit has dried up faster than a temperance party of new-minted teetotalers in the Sahara. Exactly why the so-called “sub-prime” crisis should have popped up so suddenly and so virulently is a matter of dispute. Doubtless greedy bankers had something to do with it. But how about the politicians (and guess which ones?) who were insisting that credit be loosened, that “red-lining” certain neighborhoods be outlawed in the name of “equal access” (how to you spell “default risk”?): don’t they also share the blame?
In any event, the novelty of recent years is the barely concealed, and obviously partisan, delight in bad news on the part of those reporting the news. We saw something similar in the reporting on Iraq. Every time a roadside bomb took out an American Humvee, the story was splashed over the front-page of The New York Times and other adjuncts of the Democratic Party before being handed over to the editorialists for moralizing later on in the paper. Somehow, the success stories, when reported at all (which isn’t often) are relegated to a snippet on page B17. The bottom line? They crave failure.
So it is with the economy: how happy falling home prices makes The New York Times. How delighted they are to report that growth has slowed and unemployment risen (not by much, it is true, but they do they best they can with what they have to work with). How thin-lipped about good news they are. You probably have to spend more time than I am willing to do reading The New York Times and kindred organs to appreciate fully the inadvertent humor, not to say hypocrisy, of their reporting. Fortunately, other stalwart souls are there in the trenches wrestling out the delicious nuggets for the rest of us. The excellent web site web Classical Values, for example, offers an illuminating comparison. In a business story about the situation in Europe, a Times reporter described the German economy as “blazing ahead”–blazing, mind you– by 1.5 percent in one quarter even as Forbes (for example: you see similar stories in the Times) found an analyst who assures us that the 1.9 percent growth in the US is evidence of recession: “The fact that there was technical growth in GDP,” he sniffed, “in no way alters our view that the economy has fallen into recession.” Well, that analyst was from Bear-Stearns, so perhaps he should be forgiven for taking a gloomy view of things.
Along the same lines, Matt Welch over at Reason has a splendid analysis of a recent Washington Post story about the economy. Quoth Sebastian Mallaby in the Post:
The upshot is that things are desperate. The unemployment rate in the headlines (which understates the real number) is heading toward 6 percent; home prices are falling hard; and the two forces that have averted outright recession – a timely fiscal stimulus and strong growth abroad – are fading. The Fed has cut interest rates as much as possible given the worry about inflation. Foreign central banks are similarly boxed in. With the world’s inability to agree on anything, there’s no prospect of a coordinated global response – witness the breakdown in trade talks. And so the United States must act using the only tool it has: It is time for a second stimulus.
And Welch comments:
I’m old enough to remember when “unemployment heading toward 6 percent” was a scare phrase when said rate was heading downward, because the Phillips Curve-quoting consensus was that anything lower than 6 percent would trigger automatic inflation. Yet for the past 167 months, unemployment has indeed been lower than 6 percent for all but a seven-month stretch in 2003, during a time when total nonfarm employment increased from 115.2 million to 137.6 million, according to the Bureau of Labor Statistics. Things are desperate!
But wait, home prices are falling hard, right? Yes! All the way down to … 2004 levels. Which were still nearly double 1997 levels in real terms.
As for “outright recession,” yes indeedy that has been averted, to the tune of 1.9% GDP growth in the second quarter. And much as I hate to see global trade talks break down, a “coordinated global response” to allegedly “desperate” economic situations worldwide (think: the 1997-98 Asian flu, or the peso crisis not long before that), are about the collective actions of central bankers, not trade negotiators. And fer cryin’ out loud, how come it’s only spending more guvmint money that indicates “courage,” rather than performing the much-rarer feat of spending less?
More “guvmint money.” More regulation. Bigger bureaucracy. Less free trade. In other words, bring on the socialist interventions. Here we are sitting on the most productive economy in the world. The stock market closed yesterday at nearly 11,800. The dollar has been strengthening significantly against the Euro. But, yes, we have some bad news. Mallaby tips his hand even more in succeeding paragraphs where we discover that 1) “Barack Obama, to his credit, has called for a modest stimulus,” and that 2) the Bush administration’s tax cuts were “crazy” and, by implication, the cause of the budget deficit. Mallaby also likes the idea of the government confiscating and redistributing private assets, so he cheers Obama’s plan to tax (i.e., usurp, expropriate, steal) the “windfall profits” big oil companies have recently enjoyed.
Have you noticed that by prefixing the adjective “windfall” to the noun “profits” you convert a good thing into something deserving of government pillage? Why adding a good thing (windfall: “a sudden and unexpected piece of good fortune”) to another good thing (a profit) should result in a bad thing is part of the mysterious alchemy of socialist intervention. No one understands it, but socialistically-inclined politicians have lost no time in exploiting it. Depressing, isn’t it?
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