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| Home Front: Economy |
| Economic Expansion Slowing? What Expansion? |
| 2005-09-13 |
| When Reuters reported the day Hurricane Katrina hit that it "could slow U.S. economic expansion," the only surprise was the admission in the headline that economy actually was - and had been - expanding. Expansion, after all, is a word that rarely shows up in newspaper headlines or TV news programs to describe today's economy, despite more than two years of solid growth. Instead, readers and viewers have been treated to a steady diet of doom and gloom, Gloom. Doom. Fairbanks. with headlines like "An Economy on Thin Ice" or "Experts Warn Debt May Threaten Economy," and relentless coverage of gasoline prices, housing prices and job competition from China. The dirge goes on. Even when there is clearly good news, reporters seem to reflexively add a bold warning statement. Consider this recent Associated Press dispatch: "An abundance of jobs helped push consumer confidence higher this month, but the optimism could be short-lived as the pain at the gasoline pump becomes more acute." Typical. Little wonder then, as The Washington Post reported, that Bush can't get any credit for a growing economy. WaPo invents the news, then reports it. And - news flash! - the economy is growing. Here are some of the basic facts: - Gross domestic product: Since the beginning of April 2003, the economy has grown at a healthy clip, climbing an average of 4 percent. That's better than the average growth rate recorded during the Clinton years. - Unemployment rate: The unemployment rate is now below 5 percent. During the past 20 years, the unemployment rate has averaged more than 5.4 percent. - Tax revenues and the deficit: Economic growth has fueled a surge of revenues and cut sharply into the projected deficit, which is what happened in the latter years of the Clinton administration. Of course, Katrina will have an impact on the economy, though just how much isn't known. A Congressional Budget Office report issued Wednesday says the hurricane could cost 400,000 jobs and shave off a full percentage point from GDP growth in second half of the year. Meanwhile, gas prices could average about 40 percent higher than before the storm. But, since Americans spend on average just 3 percent of their annual budget on gasoline - less than they spend eating out or on entertainment - a spike in gasoline prices, while not meaningless, is hardly catastrophic. There are other legitimate economic concerns. Real income hasn't budged in the past year, poverty has climbed according to the changing definition thereof and the ranks of the uninsured remain far too large bigger deductibles would allow coverage for major incidents, but the left wants free medical(not to mention the general worries created during a time of war). But the economy always faces threats, even in the best of times. The question is why the news media is so maniacally focused on the dark lining on the big sliver economic cloud? Every silver lining has a cloud!™ Is the situation really that perilous? Or are reporters putting a negative spin on every story because good news would only help the current occupant of the White House? Whadda you think? Unfortunately, the answer isn't clear, since reporters' biases have colored economic coverage in the past. Back in 1992, newspapers and TV stations relentlessly fussed about the terrible state of the economy. The tenor suddenly changed in early 1993. The only difference was that Bill Clinton had been given the keys to the White House - nearly two years after that recession had ended. So it is clear! |
| Posted by:Bobby |