Obama's Rhetoric Is the Real 'Catastrophe'

[GG]

http://online.wsj.com/article/SB123457303244386495.html


By BRADLEY R. SCHILLER

President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.

In his remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today's economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover.

This fearmongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don't come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate. Consider the job losses that Mr. Obama always cites. In the last year, the U.S. economy shed 3.4 million jobs. That's a grim statistic for sure, but represents just 2.2% of the labor force. From November 1981 to October 1982, 2.4 million jobs were lost -- fewer in number than today, but the labor force was smaller. So 1981-82 job losses totaled 2.2% of the labor force, the same as now.

Job losses in the Great Depression were of an entirely different magnitude. In 1930, the economy shed 4.8% of the labor force. In 1931, 6.5%. And then in 1932, another 7.1%. Jobs were being lost at double or triple the rate of 2008-09 or 1981-82.

This was reflected in unemployment rates. The latest survey pegs U.S. unemployment at 7.6%. That's more than three percentage points below the 1982 peak (10.8%) and not even a third of the peak in 1932 (25.2%). You simply can't equate 7.6% unemployment with the Great Depression.

Other economic statistics also dispel any analogy between today's economic woes and the Great Depression. Real gross domestic product (GDP) rose in 2008, despite a bad fourth quarter. The Congressional Budget Office projects a GDP decline of 2% in 2009. That's comparable to 1982, when GDP contracted by 1.9%. It is nothing like 1930, when GDP fell by 9%, or 1931, when GDP contracted by another 8%, or 1932, when it fell yet another 13%.

Auto production last year declined by roughly 25%. That looks good compared to 1932, when production shriveled by 90%. The failure of a couple of dozen banks in 2008 just doesn't compare to over 10,000 bank failures in 1933, or even the 3,000-plus bank (Savings & Loan) failures in 1987-88. Stockholders can take some solace from the fact that the recent stock market debacle doesn't come close to the 90% devaluation of the early 1930s.

Mr. Obama's analogies to the Great Depression are not only historically inaccurate, they're also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren't likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fearmongering can trigger a political stampede to embrace a "recovery" package that delivers a lot less than it promises. A more cool-headed assessment of the economy's woes might produce better policies.

[Conan71]

I'm trying real hard to figure out the end-game here.  

Dumbing-down the economy is going to cost more and more jobs and send more people looking to a government which is going to have less and less revenue available for assistance.  

Companies are alarmed and looking for every single cut they can make to stay in business.

[we vs us]

So what should he compare our current to?  The Panic of 1873?  I guarantee a WHOLE lot of people will understand what he's talking about then.

So, do you think we're NOT entering a period as serious as the Great Depression?  Or maybe, that there's not a substantial risk of it getting that bad?  Or do you think that it's all loose talk on the part of Obama and his admin?

Question is aimed at unreliable, not Conan.

[Cats Cats Cats]

You can say whatever stats about this % here and that % there.  2009 just started, just wait until the end and then we will get our 1 year numbers to compare.  Why don't you just take Jan 598,000 jobs lost makes it 7,176,000 jobs lost this year.  It is just starting, that is why it looks better than it is.  After we get over this we get to deal with the inflation.

[Chicken Little]

quote:Originally posted by cmatt1

You can say whatever

This guy Schiller DOES say whatever.

Media Matters has a takedown on this piece by Yet Another WSJ wingnut:

quote:Rule No. 1 of a lazy writer: He tells you what so-and-so said, but doesn't' show you. So here, readers had to take Schiller's word for it that Obama claimed "today's economy" is the worst since the Great Depression. Normally, if a writer builds an entire column around what somebody said, the writer, y'know, actually quotes that somebody. But not Schiller.

http://mediamatters.org/countyfair/200902160001?show=1

[Cats Cats Cats]

If you don't think this is the worst economic crisis since the great depression as Obama claimed.  Then they are probably the same people that laughed at everybody warning of this happening 3 years ago.