Americans believe the economy is in a recession. But is it true?
Just how bad is the U.S. economy? Who's asking? More important, who's answering?
The conventional wisdom is not always wrong. But because it depends so much on emotion, it can often mislead. As a result, it is in times like these that economic fundamentals become so important. Rather than dwelling on the bad news coming from the financial and housing sectors, we believe it is important to look at the underlying drivers of the economy. And those look very solid.
Back in 2002-03, the household measure of civilian employment was much stronger than the payroll survey, signaling economic recovery. However, at the time, many prominent economists, including Alan Greenspan, (wrongly) argued that the payroll survey was right about the economy, not the household survey.
Then, in late 2007, the household survey was weaker than payroll growth, signaling slower growth and gaining some adherents now that it was showing weakness. But in the past few months, the household survey -- which we have followed closely all along -- has turned up strongly. In the first four months of 2008, when the payrolls survey shows a loss of 65,000 jobs per month, the household survey shows a gain of 179,000 per month.
Look for more positive economic data in the months ahead, as the most predicted recession in U.S. history never comes to pass.
As of spring 2008, we're probably just a third of the way through the unfolding debacle in the housing, credit, and financial markets. In political and regulatory terms, the ultimate problems and remedies have only begun to define themselves.
We're not just looking at an ordinary recession. Since the 1970s, the United States has redefined itself from a manufacturing nation to a financial economy built on debt, leverage, and a considerable ratio of speculation. Both political parties have been complicit in this, and the downturn now beginning will be unusual and potentially tragic.
The lesson of history is that previous leading world economic powers, from Rome and Imperial Spain to the Netherlands (back when New York was New Amsterdam) and early 20th-century Britain, have been unable to reform themselves in time to avoid decline. Politics has failed in the face of entrenched interests. In the process, excessive debt and dependence on finance rather than production has been front and center. New nations move to the head of the line -- and these days we can see Asia smiling.
John McCain says the United States could stay "100 years... 1,000... 1 million years" in Iraq. But what does he mean?
The liberal group MoveOn.org began airing ads Wednesday against Republican John McCain, citing his claim that the U.S.
Haven't we been listening to talk of "100 years" of war in Iraq for 100 years now? It certainly feels that way. But this favorite talking point of the two Democrats presidential candidates is bogus.
"Instead of offering an exit strategy for Iraq, (Sen. John McCain is) offering us a 100-year occupation," Sen. Barack Obama said on the fifth anniversary of the coalition’s move on the then-oppressed Iraq. But it could have been any day; Obama uses the sound bite often enough.
What the "100 years" talk refers to is something McCain rightly said in response to a question during a New Hampshire townhall meeting in January. The question regarded Bush’s statement that we could be in Iraq for 50 more years. McCain sensibly responded: "Make it 100. We’ve . . . been in Japan for 60 years. We’ve been in South Korea for 50 years or so. That would be fine with me. As long as Americans are not being injured or harmed or wounded or killed, that’s fine with me. I hope that would be fine with you, if we maintain a presence in a very volatile part of the world where al Qaeda is training, recruiting and equipping and motivating people every single day."
When asked to clarify, he would go on to say that it could be 1,000 years, or even a million years. These are the lines that try Democrats’ souls. But McCain was right about the long war. It was a sensible answer. And though it doesn’t sound like the most attractive answer -- who wants 100 years in Iraq? -- it was straight talk from a senator who has a better track record on Iraq than most. And it may not hurt his campaign, either.
John McCain has been insisting that his 100 years in Iraq comment is being taken out of context. That in fact what he meant is that American troops can stay in Iraq for fifty or 100 years if American troops are no longer being attacked. This assertion leads to a whole new set of questions that reflect McCain's lack of understanding of what is going on inside Iraq.
First of all, how exactly does Senator McCain envision getting to a point where there are no American casualties in Iraq? The idea of a large American troop presence in Iraq that does not draw any fire is farfetched. What we have in Iraq today is some odd and complicated mix of numerous sectarian conflicts with Americans stuck in the middle. This isn’t Korea. There will be no armistice or Demilitarized Zone. Senator McCain has not laid out any kind of a roadmap or strategy for how we get to this idealized scenario where American forces are no longer being fired upon.
Second, how long does he think it will take to get to this end state that he envisions? Will it take 10 years? Will it take 20? 30? When under his plan do American troops stop taking casualties? It would be good to know.
Finally, there is the question of a permanent presence in Iraq and the strategic costs to the United States. One of the Bush Administration’s premises for the war in Iraq, was the idea that we needed to eliminate Al Qaeda. But one of the major inspirations for Al Qaeda, was the American presence in Saudi Arabia. In a similar way, creating a large permanent troop presence in Iraq would act as a recruiting tool for Al Qaeda and draw anger and suspicion from all over the Arab World.
Elizabeth Edwards, wife of former Democratic presidential candidate John Edwards, complained in the New York Times on Sunday that the press is emphasizing silly stories over substantive issues in the election.
Two storylines in the coverage of the 2008 presidential election are starting to wear thin. The first is the narcissistic display of self-doubt by the media over whether they are spending too much time covering the horse race in proportion to the issues.
Here’s the thing: If the public displayed an appetite for these things, the businesses would cater to it. Instead, readers demand more comic strips, horoscopes, recipes, movie listings, gardening tips, "human interest stories," "good news," and so forth.
At the same time, though, the incredibly tiny minority of us who are interested in public policy have more ability than ever in human history to get that information in as much detail as we want, as often as we want, and at a time that is convenient to us. That’s a pretty good trade-off.
John Edwards, Joe Biden, Chris Dodd, Mitt Romney, and the others lost, not because the press didn’t cover them properly but because the public looked them over and didn’t see them as "presidential." It’s probably true that most people couldn’t tell you much about the health plans of these guys. But, really, who cares? There was never much chance that these people would be president. Why waste your time reading their white papers?
The vigorous press that was deemed an essential part of democracy at our country’s inception is now consigned to smaller venues, to the Internet and, in the mainstream media, to occasional articles. I am not suggesting that every journalist for a mainstream media outlet is neglecting his or her duties to the public. And I know that serious newspapers and magazines run analytical articles, and public television broadcasts longer, more probing segments.
But I am saying that every analysis that is shortened, every corner that is cut, moves us further away from the truth until what is left is the Cliffs Notes of the news, or what I call strobe-light journalism, in which the outlines are accurate enough but we cannot really see the whole picture.
News is different from other programming on television or other content in print. It is essential to an informed electorate. And an informed electorate is essential to freedom itself. But as long as corporations to which news gathering is not the primary source of income or expertise get to decide what information about the candidates “sells,” we are not functioning as well as we could if we had the engaged, skeptical press we deserve.
An American soldier stands near the site of a car bombing in Iraq.
The military analysts you see on television are often ex-military officers retired to public life.
The paper offers no evidence that any of these men were using their influence to directly further a personal interest (unless one counts "networking"), and it offers no evidence of coercion on the part of the administration. So the charge is a lack of transparency, and it rests on the assumption that Americans are too stupid to surmise the likely ideological and institutional biases of a former general officer in the United State military.
Of course, Americans are not so stupid, and I suspect most will appreciate the irony of the New York Times judging retired military officers as insufficiently objective in their analysis of the war in Iraq.
We’ve known for a while that the Bush administration has been manipulating Iraqi media for propaganda purposes, but the U.S. maintains an independent fourth estate. At least, it’s supposed to.
Many of these retired military commanders knew they were being manipulated by the administration, and knew they were telling the public misleading information, but felt compelled to play along anyway.
For five years, these men have been dominating the airwaves, telling Americans that we’re “winning,” that the Bush policy is “working,” and that the media is ignoring the “good news.” It wasn’t true, as some of them are now willing to admit.
But as offensive as it is to learn about the retired military leaders regurgitating White House talking points for fear of losing lucrative contracts, it’s even more offensive that the Bush gang would view retired commanders as puppets, and the public as suckers.
The mea culpas are copious today.
Hillary Clinton's political obituary had been written before the New Hampshire primary -- with polls, pundits and conventional wisdom all doing their bit to shovel the final mounds of dirt on the grave. Months before, John McCain had endured the same process.
I have referred several times before in this space to Tony Blair's observation, after resigning last year, that the pressure of 24/7 electronic media has drastically cut the time available to make judgments, and so the quality of decisions has declined. The missed call in New Hampshire is the first sharp demonstration of this truth for journalism itself. Odds are that nothing will be learned from this because no one has time to think about it.
But as to the media's coronation of Barack Obama after Iowa, what's to explain? They jumped over the moon for Barack. End of story.
I don’t think it was the pure emotion. I think it has more to do with how the media covered that emotion. They just wouldn’t give her a break. Hillary’s burst of anger at John Edwards during the debate was described as shrill and unhinged; the tears, as I said earlier, were immediately interpreted as some kind of ploy, or a sign of weakness and even emotional instability. It was the voters who saw beneath the interpretation and actually perceived these moments as a glimpse at the real Hillary. The pundits and analysts missed this. To them she was just as inauthentic as ever, the narrative had not, could not, change. What I think the public in New Hampshire responded to—the backlash, if you will—was how these moments were spun. People saw the media’s inability to fit Clinton into any narrative other than the one the press had constructed for her, and they decided to give her a break, believing what they saw versus how they heard it characterized.
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