QandO

March 09, 2004

Economic reporting, reality
Posted by Jon Henke

Bob Rayner writes a weekly economic-centric column in the Richmond Times-Dispatch, and this week's piece makes a point I've been banging my head about for awhile. He makes it with style, too.....

Well, I guess it's official now. The economy is going down the drain.

Billy Crystal informed us during the Academy Awards telecast last week that "the economy is in the tank."

I can deduce with some certainty that Crystal didn't reach this conclusion through personal experience. My guess is that he's been watching the news on TV and reading his newspaper, where the hopeless decline of the American worker has been chronicled with a rising fervor.

And so it goes. Fortunately, Rayner does, too. Read on. It's good.

It's almost impossible to make it through the day without facing another story about our army of laid-off factory workers and the boarded-up manufacturing plants that are springing up across the country like so many malignant mushrooms.

ABC News and Money magazine conduct an interesting weekly poll that gauges people's take on the economy. Confidence had been building steadily since summer, when a little more than 20 percent of Americans described the national economy as "good" or "excellent."

By mid-January that figure had climbed to 44 percent. But then, beginning with a Jan. 27 survey, the confidence level began to plunge, and by early March only 33 percent said the economy was good or excellent.

Interestingly, 56 percent - including Billy Crystal, no doubt - described their personal financial situation as good or excellent.

Several other widely followed consumer sentiment surveys took similar dives in February after months of steady improvement.

What happened in the last couple of weeks of January to precipitate such a dramatic downturn in Americans' optimism about the economy?

Did the stock market plunge? Was there an unexpected rush of massive layoffs? Were paychecks suddenly smaller? Did retail sales stall? Business investment decline? Home prices fall? Interest rates surge? Inflation re-ignite?

No, no, no, no, no, no, no, and, one more time, no.

The big economic event that sent confidence skidding in January was, drum roll please: the start of Democratic presidential caucuses and primaries and the massive attention that they, quite rightly, drew from the news media.One more good bit, then I'll direct you to the article for a few relevant numbers....

Democrats trotted out all kinds of gloomy stories about the economy to bolster their case against President Bush. No real problem there. That's the job of opposition parties after all. And I don't really blame them - they're politicians - for exaggerating their economic statistic.

Not statistics, mind you, but the singular form of the noun. The Democrats' entire economic argument relies on one survey - the Labor Department's tally of monthly nonfarm payrolls.

That's the figure, you've no doubt heard about 80,000 times, that showed a decline of 2.6 million jobs since that economically significant month of January 2001, which, coincidentally, is when George W. Bush took office.

I'm not going to mimic the Republican campaign points about how many challenges the country has faced since 2001, even though many of my colleagues across the country have done a fine job mimicking the Democratic talking points about Bush being the worst president since Herbert Hoover.

I will suggest to those reporters covering the John Kerry campaign that the next time he says Bush cost the U.S. economy 3 million jobs, they gently remind their viewers and readers that, while it's a fine applause line, it is - not to put too fine a point on things - inaccurate.

Even by the most pessimistic measure - the nonfarm payrolls - job losses now stand at about 2.2 million since January 2001. Not a pretty number I'll admit.

Of course, since the Bush-led tax cuts hit the economy last summer, those payrolls have increased by 364,000 jobs.

And a second Department of Labor survey, which does a better job counting new employment at small entrepreneurial startups, shows a seasonally adjusted gain of 1 million jobs in the past year and 511,000 since Bush took office.

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