Economic news tends to be confusing no matter where you get it from, but you really want to avoid getting from the Associated Press – and all the more so from local and regional newspapers who pick up AP stories and then put their own spins on the headlines.
You end up, as we did in Atlanta this past week, with stories based on huge deceptions that try to use numbers within the stories to mean what they don’t really mean.
The AP ran a story this week headlined: “
U.S. economy, though sluggish, may now be sturdier.” That sounds like a headline someone wrote after reading the story and having no idea what it was supposed to mean. It’s “sluggish” but also “sturdier”? What on earth does that mean?
I don’t know (and neither do they), but I’m sure it doesn’t mean what the Atlanta Journal-Constitution tried to make it mean when, in one edition, they picked up the story and applied this headline: “Slow growth brings strength.”
Say what? Because growth is slow, that means the economy is strong?
George Orwell would surely smirk knowingly at that one. War is peace, freedom is slavery, slow growth is strength. Except that slow growth would actually be an improvement over what we saw in the first quarter of this year, when GDP declined by 2.9 percent. We have some work to do to get the economy back to slow growth.
But even having said that, let’s look at the case the AP tries to make for the economy being “sturdier” even as it’s “sluggish.” It’s a pretty clear case of how an economics reporters can spin their way to any conclusion they want when they don’t really know what they’re talking about:
Unemployment aid applications dropped to 284,000 this past week. The three-week average was 302,000. That’s only good in a relative sense, because you have to remember that when more than 200,000 jobs are created in an entire month, they want to throw a party. Yet we’re still getting 284,000 new unemployment claims every week? We’ve got a long ways to go before the balance is tipped in the right direction.
Fewer people are piling up credit card debt or taking on risky mortgages. This is a pretty funny one coming from the same people who complain when people can’t get credit. They’re not buying houses and not charging purchases to their credit cards because they’re broke! And that leads us to the next reason we’re supposed to be feeling better about things . . .
Banks are more profitable and holding additional cash to guard against a repeat of the 2008 market meltdown. You want to know why banks are being stingy about lending? Because new federal regulations like Dodd-Frank, not to mention constant federal investigation threats, have them proceeding with extreme caution. So the same people who are always telling us the economy needs capital to be spread around so as to achieve “Keynesian multipliers” and so forth now argue it’s good news that the banks are hording cash? The truth is that the banks make the most money when they make good loans, and they know how to determine which loans are smart for them to make. The federal government is making it harder for them to do so.
More workers hold advanced degrees. This is good news in theory only. Sure, on paper, people make more money if they have advanced degrees. But in the Obama economy, we see a growing number of people amassing debt to get degrees, only to find they can’t earn anywhere near what they were expecting when they finish school. And when 50 percent of the college graduates can’t find a job, they keep going to school. So sure, they’ve got degrees. But that’s all they’ve got.
Inflation is under control. Really? Ask the person in your household who buys the groceries on a regular basis. I did. I asked my wife, who constantly tells me that every time she goes to the store, she pays more for the same shopping cart worth of groceries as the last time. Inflation is often measured more accurately by real people on the ground, not by statisticians following theoretical models. Inflation is not under control.
Millions who have reached retirement age are staying on the job. Wait. This is supposed to be good news? Why do you think they’re still working? They can’t afford to retire! If we’re getting millions in additional goods and services produced by people past retirement age, and we’re still seeing a 2.9 percent decline in GDP, friends, that ain’t good.
That’s why I call this a deception alert. Obama’s cheerleaders at the AP know that economic news can be confusing, and that presents an opportunity for them to take a report and deceive you by offering an analysis of it that is completely nonsense.
Sluggish doesn’t mean sturdy. Slow growth doesn’t bring strength. And you’d be wise not to seek your understanding of economic news from the mainstream media – especially the AP. They don’t understand it themselves.
