From the category archives:

Economics

The Over-Hyped Recession

by Doug on March 16, 2009

in Economics,Politics,Press

It’s hopefully not a new idea to you that news organizations are prone to present just about any story as “THE MOST SHOCKING, BIGGEST, UNPRECEDENTED, MUST-SEE MUNDANE STORY WE’VE EVER REPORTED!!!!!” Why? They are deathly afraid you will change the channel when they cut to commercial, or walk past the newsstand without buying that paper, or allow your eyes to scan right past the link to their site and never consume the ads they are selling. Yes, IT’S A BUSINESS! They only report news because they so desperately  need your eyeballs in order to make a profit selling advertising around their reporting.

This is why, over the last six months, you’ve seen so many headlines in this vein: “Most Americans Ever Unemployed.” What’s wrong with that headline? Just this: The fact is that as a percentage of the workforce, unemployment during the current recession is not as great as it has been even in the last 30-40 years, let alone during the Great Depression (not even close). But instead of stating that in the headline, it will say, “More Americans Out Of Work Than During Great Depression.” Guess what? There are many millions more people in the U.S. today than during the time of the Great Depression, so the fact that there are more Americans unemployed today than there were then is more of a curiosity than an indicator of the severity of the current economic downturn.

Headlines, though, are written to grab attention, not present the facts that are needed to properly place a story in historical context.

The media are not alone in this. Political candidates (or, I should say, candidates who are not incumbents) also work to give the impression that times are unprecedentedly hard during their campaign. While he was running for office, Pres. Obama was absolutely following this predictable playbook. As the media has the same motivation, they were happy to repeat the Obama mantra that this was the worst economy in 50 years. (I seem to recall that Bill Clinton’s campaign in 1992 had the exact same “worst economy in 50 years” mantra. The result of focus-group testing of the most effective time comparison, probably.) A candidate who can instill fear in voters and convince them that he or she is the panacea to the scenario which the voters should fear, has a good chance of winning those votes. Obama carried this tactic right into his term in the White House, using constantly-stoked fear of economic collapse as political cover to win passage of the enormous stimulus bill, full of unpopular initiatives which would be very unlikely to be voted into law were they debated on their own merits. This was one of the most cowardly legislative tactics I’ve ever seen.

Kirk Petersen cites data that supports this idea in his blog post today. Give it a read, and be cognizant of such tactics when you are consuming news reporting, whether it be on television, in print, or online.

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Rose-Colored Budget

by Doug on March 11, 2009

in Economics,Politics

I’ve seen several mentions of the record deficits in Pres. Obama’s budget being understated. Yes, they’re the highest ever, but they are very unlikely to remain at those levels – they’ll almost certainly go much higher. Here’s one example from Newsweek:

Defense—a.k.a. national security—has long been government’s first job. In Obama’s budget, defense spending drops from 20 percent of the total in 2008 to 14 percent in 2016, the smallest share since the 1930s. The decline, reflecting large savings from an Iraq troop drawdown, presumes a much safer world. If the world doesn’t cooperate, Obama’s deficits would grow.

Do you believe that the U.S. is likely to make it to the end of the 2016 budget year without another significant military commitment? I sure don’t. The article has several things to say which are very critical of Pres. Obama. You can read the entire article here.

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Doomed Without Tort Reform?

by Doug on February 25, 2009

in Economics,Reform

President Obama last night threw his full weight behind enacting “health care reform” this year. (I put that in quotes not because it’s precisely what he said, but rather because nobody knows what he means when he uses those words. It’s one of the many campaign promises on which Obama was especially slippery about defining.) [...]

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You Can’t Re-inflate the Bubble

by Doug on February 25, 2009

in Economics

Ron Paul in the house Financial Services Committee. (h/t: Mark A. Horne)

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Friedman Defends Greed

by Doug on February 23, 2009

in Economics,Politics

The video below is from a 1979 episode of Phil Donahue’s program. Milton Friedman (1912-2006) was a Nobel Prize-winning economist. Donahue put him on the spot to defend capitalism and the greed that drives it. His response is as timely today as it was then. (h/t: Mark Smith)

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Buchanan on The Long Retreat

by Doug on February 23, 2009

in Economics,Politics

Pat Buchanan published an opinion column on Friday that addresses the decline of the United States’ ability to support her interests in the world. As usual for Pat, it is an interesting read. Buchanan links national influence and power in world affairs to a nation’s share of total world product – her manufacturing output, essentially. [...]

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Phil Gramm on the Counter-Point

by Doug on February 20, 2009

in Economics,Politics

Phil Gramm had an op-ed published in the Wall Street Journal’s Opinion Journal on Friday. While nothing in the column cited the Forbes column that I wrote about last night, he makes a good case for the more likely causes of the present turmoil in the U.S. economy as of this date. I’ll leave it [...]

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The End For Laissez-Faire?

by Doug on February 19, 2009

in Economics,Politics

Nouriel Roubini, a business professor at NYU, in his column this week for Forbes, pronounced the death of Laissez-Faire capitalism as a result of the current economic turmoil. I must object. We haven’t been in a Laissez-Faire system for many decades, at the least. The U.S. government has done all they can to impede market [...]

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