Covering the Economy

John Lott has a nice piece on the way the MSM covers the economy. In election years when the incumbent is a Republican the media are filled with doom and gloom reports, but when the incumbent is a Democrat the stories are consistently upbeat. This, despite the fact that the economic statistics in each case are roughly comparable. Lott writes:

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.”

Read it here.

As I pointed out in an earlier post we cannot technically be in a recession if the economy is still growing, and it is. This, as the President noted, is a period of "slowdown", not recession or depression, but this is an election year and he is a Republican and so his statements are ignored in favor of dramatic pronouncements of doom.

There are clear problems. The most important is the credit crunch brought about by the collapse of the sub-prime lending markets. The public should be encouraged by the fact that the administration and the federal reserve have worked out a proposal for expanded regulation of lending markets. Here's the executive summary of the proposal. Check it out yourself. The MSM isn't paying much attention to it.

And, regarding the subprime crisis. The best sign that it is over is the fact, reported in Der Spiegel, that investors are moving in to scoop up bargains. Read about it here.