The Cincinnati Enquirer
I hear the economy is so bad, I will soon have to take a second job robbing liquor stores just to avoid foreclosure.
Inflation is so high my economic stimulus check will hardly cover the increase in postage stamps.
Gas prices are so steep, Exxon is offering subprime mortgages for 20 gallons of unleaded.
And housing sales are so slow, Century 21 is having a “buy one, get one free” sale.
But what if it’s not true? What if the economy is just choking on exaggerated bad news?
So far this year, I have counted eleventy-thousand “recession” headlines. But the other day, the Commerce Department reported that the economy grew by six-tenths of 1 percent in the first quarter of 2008.
Lucky for us, a recession is not defined by panicky headlines. It’s defined by two consecutive quarters of decline. And we have not had even one. No matter how many experts yell “recession” in a crowded Wal-Mart, it’s not true.
That made me wonder: What if the housing crisis has been exaggerated, too?
If only 5 percent of all mortgages are in foreclosure, that means 95 percent are fine. Unless you have to sell now, the decline in values is only on paper.
And unless you bought more house than you can afford, with one of those adjustable-pain mortgages, why worry? Declining values make homes more affordable – and with low interest rates, sales should rebound.
What if gasoline prices are not really the end of civilization?
The TV news makes a 3-cent gas hike sound like a flaming asteroid hurtling directly at my driveway. But when Sen. John McCain proposed a summer holiday from federal gas taxes to save 18 cents a gallon, Democrats and editorial writers mocked it and said taxes just aren’t high enough.
Critics say a tax holiday would save an average driver only about $30. But that means the same driver (10,000 miles per year at 20 mpg) will pay only $250 a year if gas prices go up 50 cents. Hardly the Armageddon they describe on the news.
Yes, $50 fill-ups are about as fun as sky diving with a lace parachute. But if a 10-cent increase in gas prices is a national catastrophe, why is an 18-cent cut too trivial to discuss?
And why do the politicians always blame “Big Oil”? The oil companies make less profit on a dollar (9 cents) than McDonald’s (12 cents) or Microsoft (27 cents). Oilmen were not the pinheads who voted to burn corn ethanol and cause a worldwide food shortage to appease farmers and environmentalists.
And what if bad news is deliberately exaggerated?
Media research by John Lott Jr., author of “Freedomnomics,” showed: “Over 78 percent more negative news stories discussed a recession when the economy under a Republican was soaring, than occurred under a Democrat when the economy was shrinking.”
In the final year of the Clinton administration, polls showed voters didn’t know the country was in a recession, thanks to the media. But this year, even while the economy has been growing, headlines whine relentlessly about recession.
I’m sure that has nothing to do with the fact that a bad economy is good for Democrats in an election year. Of course not. But in a recent poll, 54 percent of Americans said we are in a recession – although 76 percent said their own situation was fine.
“The media’s focus on the negative side of everything surely helps explain people’s pessimism,” Lott said. “The news media have generated a lot of fear.”
Why not look at the gas tank half-full instead? A $600 economic stimulus check is enough to offset even a $1 increase in gas prices for a year – with enough left over to stop at the liquor store.
Peter Bronson is a columnist with the Cincinnati Enquirer and former editorial page editor of the Tucson Citizen.
THE MISERY INDEX
The misery index combines the inflation and unemployment rates. A comparison of the index under selected administrations:
Bill Clinton 7.80
George W. Bush 7.89
Ronald Reagan 12.19
Jimmy Carter 16.27