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The 'Recession' Is a Media Myth
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Topic Started: Apr 1 2008, 05:51 PM (131 Views)
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Dandandat
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Apr 1 2008, 05:51 PM
Post #1
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Time to put something here
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http://www.foxnews.com/story/0,2933,343671,00.html
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During the 2000 election, with Bill Clinton as president, the economy was viewed through rose-colored glasses. According to polls, voters didn’t realize that the country was in a recession. Although the economy started shrinking in July 2000, most Americans through the entire year thought that the economy was fine.
But over the last half-year, the media and politicians have said we were in a recession even while the economy was still growing.
Gas prices are going up. The economy is slowing. Talk of recession is seemingly everywhere. While the majority of people rate their personal finances positively, consumer confidence in the economy has plunged to a 16-year low, well below what it was during the last year of the Clinton administration when we were in a recession.
A Nexis search on news stories during the three-month period from July 2000 through September 2000 using the keywords “economy recession US” produces 1,388. By contrast, the same search over just the last month finds 3,166. Or, even more telling, take the three months from July through September last year, when the GDP was growing at a phenomenal 4.9 percent. The same type of Google search shows 2,475 news stories.
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A little perspective on the economy would be helpful. The average unemployment rate during President Clinton was 5.2 percent. The average under President George W. Bush is just slightly below 5.2. The current unemployment rate is4.8 percent, almost half a percentage point lower than these averages.
The average inflation rate under Clinton was 2.6 percent, under Bush it is 2.7 percent. Indeed, one has to go back to the Kennedy administration to find a lower average rate. True the inflation rate over the last year has gone up to 4 percent, but that is still lower than the average inflation rate under all the presidents from Nixon through Bush’s father.
Gas prices are indeed up 33 percent over the last year, but to get an average of 4 percent means that lots of other prices must have stayed the same or gone down. On other fronts, seasonally adjusted civilian employment is 650,000 people greater than it was a year ago. Personal income grew at a strong half of one percent in just February.
Despite all that, this last week, Barack Obama proclaimed “As most experts know, our economy is in a recession.” Hillary Clinton made similar staements last fall. Yet, as any economist knows, a recession is two consecutive quarters of negative growth, and we haven’t even had one single quarter of negative growth reported. The economy slowed down significantly during the end of last year, but that was after a sizzling annual GDP growth rate of 4.9 percent in the third quarter.
Housing has obviously been a big drag on the economy, but many other sectors of the economy, such as exports, have been doing well, some extremely well. For example, aerospace exports increased by over 13 percent last year.
The media’s focus on the negative side of everything surely helps explain people’s pessimism. In a recent interview Fox’s Neil Cavuto claimed this bias “is all part of the media’s plan to get a Democrat in the White House.”
Indeed, research has indicated that media bias is real. Kevin Hassett and I looked at 12,620 newspaper and wire service headlines from 1985 through 2004 for stories on the release of official government releasing numbers on the unemployment rate, number of people employed, gross domestic product (GDP), retail sales, and durable goods.
Even after accounting for how well the economy was doing (e.g., what the unemployment rate was and whether it was going up or down), there was still a big difference in how positive or negative the headlines were. Democratic presidents got about 15 percent more positive headlines than Republicans for the same economic news.
Yet, the hysteria created by this coverage can have another cost. It creates pressure for government to “do something,” even if that rush to do something actually ends up hurting the economy. For example, Obama's promises last week “to amend our bankruptcy laws so families aren't forced to stick to the terms of a home loan” will only further drive down the value of mortgage-backed securities, making any unstable financial institutions that hold them even more likely to fail. In the long term, who is going to want to loan money when the contract can be rewritten at a later date?
The news media have generated a lot of fear. Ben Stein has a point when he says “The actual economic conditions are not that bad. I think if we have a recession, if we have a serious recession, a great deal will lie at the media’s feet.” Hopefully a little perspective will enter the picture before even more harm is done.
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Dandandat
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Apr 1 2008, 06:17 PM
Post #2
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Time to put something here
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There are two problems I have with this artical, but I will first point out that I find these findings to be greatly disturbing with or with out the two prolems I have. There is something very wrong with our media and it needs to be fixxed.
Problem one) There was a big differnce between the 2000 recession and the ones that came before it in recent memory. And that was the number of Joe-Six-pack stock traders. I dont think the mane stream public realy understood things like recession and its indicators prior to 2000 they where simply riding a wave of they didnt understand. But then they where burnt and burnt hard. It has been something they have not yet gotten over. Which would explain the extra air of alarmisum now, but that does not excuse the media who should be telling the facts and setting the record strate and not fuling the alarmisum.
Problem two) There is more going on now that effects main streat that did not exist in 2000. Inflation with oil and food added in is hurting people and small business in a way that did not exist in 2000. Home value is down, in 2000 people took comfort in their homes and now they can't. Debt and debt spedning is at an all time high, and with out ones home value to offset this its even more of a problem. So while on wall street it is ture that we are not in a recession, for many people on main street they are in personal recession which they see as an outward thing moving in.
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somerled
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Apr 1 2008, 09:23 PM
Post #3
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Admiral MacDonald RN
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Well .... depends on which professor of economics you want to listen to .
Wouldn't do for Bush Jr and Co. Pty.Ltd to admit the USA is now in recession or entering a recession , this would destroy any chance of those who they hope will be elected to be elected.
Governments are very good at cooking the economic books during election cycles to make the nation look healthier than it actually is economically.
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Dandandat
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Apr 1 2008, 09:41 PM
Post #4
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Time to put something here
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- somerled
- Apr 1 2008, 10:23 PM
Well .... depends on which professor of economics you want to listen to .
Wouldn't do for Bush Jr and Co. Pty.Ltd to admit the USA is now in recession or entering a recession , this would destroy any chance of those who they hope will be elected to be elected.
Governments are very good at cooking the economic books during election cycles to make the nation look healthier than it actually is economically.
No, a recession is a measurable occurence.
a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.
No professor of economics can change the defenition of the word. The US is not in a recession because it does not meet the above. If a professor of economics says other wise, he is eather not educated or is lieing.
No one can admit or not admit to whether a recession is occuring as GDP is a measurable number, and a number measured by many independent groups.
Goverments can not cook GDP because it is measured by many independent groups.
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somerled
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Apr 1 2008, 10:12 PM
Post #5
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Admiral MacDonald RN
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- Dandandat
- Apr 2 2008, 12:41 PM
- somerled
- Apr 1 2008, 10:23 PM
Well .... depends on which professor of economics you want to listen to .
Wouldn't do for Bush Jr and Co. Pty.Ltd to admit the USA is now in recession or entering a recession , this would destroy any chance of those who they hope will be elected to be elected.
Governments are very good at cooking the economic books during election cycles to make the nation look healthier than it actually is economically.
No, a recession is a measurable occurence. a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. No professor of economics can change the defenition of the word. The US is not in a recession because it does not meet the above. If a professor of economics says other wise, he is eather not educated or is lieing. No one can admit or not admit to whether a recession is occuring as GDP is a measurable number, and a number measured by many independent groups. Goverments can not cook GDP because it is measured by many independent groups.
Yes it is , who do you think controls access to the data needed ?
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Sgt. Jaggs
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Apr 1 2008, 10:27 PM
Post #6
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How about a Voyager Movie
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- Dandandat
- Apr 1 2008, 06:17 PM
There are two problems I have with this artical, but I will first point out that I find these findings to be greatly disturbing with or with out the two prolems I have. There is something very wrong with our media and it needs to be fixxed.
Problem one) There was a big differnce between the 2000 recession and the ones that came before it in recent memory. And that was the number of Joe-Six-pack stock traders. I dont think the mane stream public realy understood things like recession and its indicators prior to 2000 they where simply riding a wave of they didnt understand. But then they where burnt and burnt hard. It has been something they have not yet gotten over. Which would explain the extra air of alarmisum now, but that does not excuse the media who should be telling the facts and setting the record strate and not fuling the alarmisum.
Problem two) There is more going on now that effects main streat that did not exist in 2000. Inflation with oil and food added in is hurting people and small business in a way that did not exist in 2000. Home value is down, in 2000 people took comfort in their homes and now they can't. Debt and debt spedning is at an all time high, and with out ones home value to offset this its even more of a problem. So while on wall street it is ture that we are not in a recession, for many people on main street they are in personal recession which they see as an outward thing moving in.
What I think I am going to see more of is more like Jimmy Carters years. I remember gas lines in the 1970's. GULF and the '76' station out of gas or with cars lined up and road rage (probably) on the nightly news.
Inflation was a word we all learned. It meant that EVERYTHING costs more. Food, rent, clothes medicine, toys - everything.
Moreover adults were always bitching about how everything costs too much and how everything sucks.
Just like now.
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Dandandat
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Apr 2 2008, 08:06 AM
Post #7
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Time to put something here
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- somerled
- Apr 1 2008, 11:12 PM
- Dandandat
- Apr 2 2008, 12:41 PM
- somerled
- Apr 1 2008, 10:23 PM
Well .... depends on which professor of economics you want to listen to .
Wouldn't do for Bush Jr and Co. Pty.Ltd to admit the USA is now in recession or entering a recession , this would destroy any chance of those who they hope will be elected to be elected.
Governments are very good at cooking the economic books during election cycles to make the nation look healthier than it actually is economically.
No, a recession is a measurable occurence. a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. No professor of economics can change the defenition of the word. The US is not in a recession because it does not meet the above. If a professor of economics says other wise, he is eather not educated or is lieing. No one can admit or not admit to whether a recession is occuring as GDP is a measurable number, and a number measured by many independent groups. Goverments can not cook GDP because it is measured by many independent groups.
Yes it is , who do you think controls access to the data needed ?
Individual companies and organizations who report their prosperity to the government and other independent annalists, investors, and stakeholders.
I don't know where you live, cause it cant be Australia if your government controls this type of information.
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Dandandat
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Apr 2 2008, 08:14 AM
Post #8
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Time to put something here
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- Jag
- Apr 1 2008, 11:27 PM
- Dandandat
- Apr 1 2008, 06:17 PM
There are two problems I have with this artical, but I will first point out that I find these findings to be greatly disturbing with or with out the two prolems I have. There is something very wrong with our media and it needs to be fixxed.
Problem one) There was a big differnce between the 2000 recession and the ones that came before it in recent memory. And that was the number of Joe-Six-pack stock traders. I dont think the mane stream public realy understood things like recession and its indicators prior to 2000 they where simply riding a wave of they didnt understand. But then they where burnt and burnt hard. It has been something they have not yet gotten over. Which would explain the extra air of alarmisum now, but that does not excuse the media who should be telling the facts and setting the record strate and not fuling the alarmisum.
Problem two) There is more going on now that effects main streat that did not exist in 2000. Inflation with oil and food added in is hurting people and small business in a way that did not exist in 2000. Home value is down, in 2000 people took comfort in their homes and now they can't. Debt and debt spedning is at an all time high, and with out ones home value to offset this its even more of a problem. So while on wall street it is ture that we are not in a recession, for many people on main street they are in personal recession which they see as an outward thing moving in.
What I think I am going to see more of is more like Jimmy Carters years. I remember gas lines in the 1970's. GULF and the '76' station out of gas or with cars lined up and road rage (probably) on the nightly news. Inflation was a word we all learned. It meant that EVERYTHING costs more. Food, rent, clothes medicine, toys - everything. Moreover adults were always bitching about how everything costs too much and how everything sucks.
 Just like now.
I wouldn't worry about that just yet. I think personal debt is going to be the real problem going forward not inflation. In fact for all the wrong reasons what the "average" debt carrying American needs right now is inflation as it will lower the size of their debt.
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STC
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Apr 2 2008, 08:30 AM
Post #9
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Commodore
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- somerled
- Apr 2 2008, 03:23 AM
Governments are very good at cooking the economic books during election cycles to make the nation look healthier than it actually is economically.
I'm not sure how true that is nowadays.
Certainly, where the government is responsible for setting interest rates, there is arguably an incentive to 'cut and run' before a general election. This was arguably true of the U.K. pre-1997.
There was also some truth to what you say in the days where fiscal policy was used as an active method of managing the level of aggregate demand on a year-to-year basis. However, fiscal policy, used in this way has long been out of favour. Hence, it would be very difficulty for a government to adjust taxes or spending in order to 'cook the books' and get away with it.
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