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Source link: http://archive.mises.org/9922/even-bad-news-is-great-news/

Even bad news is great news

May 8, 2009 by

You might enjoy seeing how the New York Times spins an 8.9% unemployment rate as good news. “The Labor Department’s monthly snapshot of the job market presented the clearest evidence to date that the nation’s economic free fall appears to have been arrested. The acute shock that began last fall as the investment bank Lehman Brothers collapsed, followed by several other prominent institutions, appears to be relenting. Panic is no longer the dominant motif of American commercial life.”

Same with MSNBC: it is light poking through the clouds because things are getting worse at a slower rate.

Imagine the spin if anyone but Obama were in charge.

{ 10 comments }

Jonathan Finegold Catalán May 8, 2009 at 1:50 pm

I wonder if anybody in the media remembers William Green’s prognostic on 22 November 1929:

All the factors which make for a quick and speedy industrial and economic recovery are present and evident. The Federal Reserve System is operating, serving as a barrier against financial demoralization. Within a few months industrial conditions will become normal, confidence and stabilization in industry and finance will be restored.

This is what popped into my head when I was told yesterday that our recession has hit bottom.

J Cortez May 8, 2009 at 2:38 pm

This is a dead cat bounce. After the 1929 crash, the markets had several months of recovery before bottoming again. Nominally, the indices are even less of indicator considering the amount of inflation that has been created. Prices are trying to fall, but the Fed has pumped in so much money. You can’t put in an extra $1,000,000,000,000 of monetary base and expect nothing to happen.

In regards to quotes, I can’t think of anything. If I had to offer one, I would go for something highlighting the lack of depth in current mainstream economic views, like this one:

Stock prices have reached what looks like a permanently high plateau.
- Irving Fisher, October 1929

Here’s some other great ones I just came across.

http://www.gold-eagle.com/editorials_01/seymour062001.html

Franklin May 8, 2009 at 3:36 pm

And if there is another fall? So what.

There is a tendency to equate economics with politics, employment rates with presidential pontification. Obama can easily weather another free-fall if it’s timed right.

The Reagan years are touted as the good old days by many in the 40-60 age bracket. Yet in 1982, the country was mired in a severe economic recession. As a young Republican at the time (yes, admittedly I bought into the con-job as well), I recall the lengthy debates and arguments with leftists, moderates, and even some conservatives. For the former, this guy (Ronnie) was “the worst president we ever had, a moron, Carter was bad and now this guy is worse, no chance for re-election — none whatsoever, look at the unemployment, the economic collapse….”

All you need is a few quarters of “relative” expansion, and memories are quite short. You think there’s spin now. Just wait until business adapts, manages through the next round of paper reality, begins hiring again…

I don’t think 8-year (or 4-year) analysis provides any insight into the impact of Federal administrative policy. Presidents and Congressmen ride the waves. If the wave is rising, you’re golden; exhaling after the crest, you’re doomed. Yet the arguments continue on which President delivered prosperity.
The debate challenge is the long term trend — the one that has been occurring for nearly a hundred years; well, maybe even more. Government expansion (I submit, intrusion) reaches into every corner of our lives, and at every level. Libertarians must succinctly and adroitly explain the impact. Not an easy task, considering that technological advances play a great part in our health and happiness.

Foreign policy disasters notwithstanding (and this crew is just as inept as the last), Obama simply needs an economic bounce of 3-6 months during 2012. And we’ll be listening to Maya Angelou types at the inauguration again.

Mac May 8, 2009 at 4:42 pm

Yep. Franklin says it for me.

The social mood governs how well the Congress and the President are perceived. And how the voters view conditions is relative: as a group they judge by the immediate past to the immediate future.

Sad what democracy amounts to in practice.

Cheers

The Natural Lawyer May 8, 2009 at 4:59 pm

“Sad what democracy amounts to in practice.”

Democracy–from the guillotine of Robespierre to the gulgags of the 20th century and America’s wars of the 21st–has been a horribly tragic experiment and, like socialism, has been refuted by historical events.

The legitimacy of power derives not from its source, but from the limitations placed upon its exercise. Period.

Dan May 8, 2009 at 7:34 pm

It was funny to listen to Christy Romer spin this jobs report on Bloomberg. All you have to do is look at this on a graph to see that the ‘improvement’ isn’t significant.

And…she’s also gratified at the boost in government employment as they prepare for the census?

Vanmind May 9, 2009 at 12:19 am

Just imagine how slow the rate will be once everyone is unemployed. It’ll be time to party like it’s 1929.

newson May 9, 2009 at 12:38 am

“the obamaman song” says it all.
http://www.youtube.com/watch?v=zhhkF3dqXR0

Lee May 9, 2009 at 1:34 pm

@J Cortez

Love the link http://www.gold-eagle.com/editorials_01/seymour062001.html

Oddly enough, it looks like this one… http://www.google.com/finance?client=ob&q=INDEXDJX:DJI especially when you zoom out to the 5 year mark.

Walt D. May 10, 2009 at 12:46 am

Let’s look on the bright side – the Federal Government added another 60,000 jobs. If this trend keeps up we will all be working for the Feds, and we’ll have nothing to worry about Just think of it – job security, health care, pensions, public holidays – we’re headed towards Utopia!

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