I opened the front page of the CNBC business news website Tuesday morning and was confronted with unexpectedly bad economic news. The lead story reported that consumer confidence in the economy had fallen in May. The consumer confidence index fell to 60 from April’s revised value of 66. Economists had expected a slight rise. Considering that consumer confidence drives consumption and a huge proportion of the US economy relies upon domestic consumption, this news bodes ill for the future.
The next story in the cue referred to housing prices. The housing market had already slipped into an unexpected “double dip” recession. But without a trace of intentional irony, the story reported that the unexpected double-dip was even deeper than expected.
The third story referred to something called the Midwest Business Barometer and reported that it was “much less than expected” in May: “The Institute for Supply Management-Chicago business barometer dropped to 56.6 in May, its lowest reading since November 2009. The reading was 67.6 in April, and economists had forecast a May reading of 62.6. The employment component of the index fell to 60.8, from 63.7 in April. New orders sank to 53.5 from 66.3.”
Wednesday, the May job growth report was unexpectedly weak.
Previous unexpected bad news has included unexpectedly high numbers of applicants for first time unemployment benefits. On May 25th, CNBC reported that, "New U.S. claims for unemployment benefits unexpectedly climbed."
On that same date: “Durable Goods declined 3.6% last month, worse than economists’ expectations.”
The quarterly Gross Domestic Product estimates have been unexpectedly anemic, especially after unexpectedly sharp downward revisions.
We’ve had a two year run of “unexpected” bad economic news since the Obama Administration predicted that their $878 billion economic stimulus program would prevent unemployment from rising past 8% and would quickly result in a sharp economic rebound. About a year ago, the Obama Administration even declared that the summer of 2010 would henceforth be known as “recovery summer.”
Things didn’t work out quite as expected.
Unemployment quickly surged well past 10% and has sagged below double digits only because so many Americans no longer have any expectations of ever finding a job and have dropped out of the labor market. When one includes those who would like to work but have given up looking or who are seriously underemployed, the unemployment rate is actually near 16% - an unexpectedly high figure.
In reality, none of this should be unexpected. There is no evidence anywhere in the world that centrally planned economies work. And considering that almost no one within the Obama Administration, including the president, has ever held a real job, those attempting to guide this economy have absolutely no idea how an economy works. There is history to guide them on this, but they have rejected the lessons of history because those results conflict with left-wing academic theories. They don’t expect free markets to work.
The only surprise is that news reporters still manage to be surprised by economic bad news.
One likely explanation is that, like Obamatons everywhere, they honestly expected that left wing crony capitalism would work and were genuinely surprised when it didn’t.
Political reporter Michael Barone remarked upon the phenomenon of this long string of “unexpected” bad economic news last week and proposed a less charitable theory to explain it. He believes that by using the word “unexpectedly” before every bit of bad economic news, journalists can create the illusion that this particular report is an aberration and that good news is just around the corner.
There is certainly evidence to support that theory. Recently, when McDonald’s announced that they would be hiring 50,000 new workers the news networks hailed this as evidence of an economic rebound. But during the boom years of Reagan and Bush, just about any job created during that era was disparaged by these same reporters as “hamburger flipper jobs.”
Even when the unemployment rate under George Bush remained below 5% for more than two years, the mainstream news media managed to make it sound as though the economy was in a shambles. A 2005 UCLA study made end-of-the-world headlines when it predicted that 800,000 construction jobs might vanish. That prediction of an as yet unrealized downturn the economy received more news coverage then than the reality of actual bad news under Barack Obama does today.
Considering that most supposedly unbiased and ever-vigilant journalists are unabashedly pro-Obama, I guess that’s to be expected.
The next story in the cue referred to housing prices. The housing market had already slipped into an unexpected “double dip” recession. But without a trace of intentional irony, the story reported that the unexpected double-dip was even deeper than expected.
The third story referred to something called the Midwest Business Barometer and reported that it was “much less than expected” in May: “The Institute for Supply Management-Chicago business barometer dropped to 56.6 in May, its lowest reading since November 2009. The reading was 67.6 in April, and economists had forecast a May reading of 62.6. The employment component of the index fell to 60.8, from 63.7 in April. New orders sank to 53.5 from 66.3.”
Wednesday, the May job growth report was unexpectedly weak.
Previous unexpected bad news has included unexpectedly high numbers of applicants for first time unemployment benefits. On May 25th, CNBC reported that, "New U.S. claims for unemployment benefits unexpectedly climbed."
On that same date: “Durable Goods declined 3.6% last month, worse than economists’ expectations.”
The quarterly Gross Domestic Product estimates have been unexpectedly anemic, especially after unexpectedly sharp downward revisions.
We’ve had a two year run of “unexpected” bad economic news since the Obama Administration predicted that their $878 billion economic stimulus program would prevent unemployment from rising past 8% and would quickly result in a sharp economic rebound. About a year ago, the Obama Administration even declared that the summer of 2010 would henceforth be known as “recovery summer.”
Things didn’t work out quite as expected.
Unemployment quickly surged well past 10% and has sagged below double digits only because so many Americans no longer have any expectations of ever finding a job and have dropped out of the labor market. When one includes those who would like to work but have given up looking or who are seriously underemployed, the unemployment rate is actually near 16% - an unexpectedly high figure.
In reality, none of this should be unexpected. There is no evidence anywhere in the world that centrally planned economies work. And considering that almost no one within the Obama Administration, including the president, has ever held a real job, those attempting to guide this economy have absolutely no idea how an economy works. There is history to guide them on this, but they have rejected the lessons of history because those results conflict with left-wing academic theories. They don’t expect free markets to work.
The only surprise is that news reporters still manage to be surprised by economic bad news.
One likely explanation is that, like Obamatons everywhere, they honestly expected that left wing crony capitalism would work and were genuinely surprised when it didn’t.
Political reporter Michael Barone remarked upon the phenomenon of this long string of “unexpected” bad economic news last week and proposed a less charitable theory to explain it. He believes that by using the word “unexpectedly” before every bit of bad economic news, journalists can create the illusion that this particular report is an aberration and that good news is just around the corner.
There is certainly evidence to support that theory. Recently, when McDonald’s announced that they would be hiring 50,000 new workers the news networks hailed this as evidence of an economic rebound. But during the boom years of Reagan and Bush, just about any job created during that era was disparaged by these same reporters as “hamburger flipper jobs.”
Even when the unemployment rate under George Bush remained below 5% for more than two years, the mainstream news media managed to make it sound as though the economy was in a shambles. A 2005 UCLA study made end-of-the-world headlines when it predicted that 800,000 construction jobs might vanish. That prediction of an as yet unrealized downturn the economy received more news coverage then than the reality of actual bad news under Barack Obama does today.
Considering that most supposedly unbiased and ever-vigilant journalists are unabashedly pro-Obama, I guess that’s to be expected.
No comments:
Post a Comment