Obama's Rhetoric Is the Real 'Catastrophe'

[alienlovechild 75]

"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.

APIn 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."

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

[one...two...tree 2,762]

Another fine opinion piece by the WSJ.

[Ban Hammer 14,175]

Another fine opinion piece by the WSJ.

yeah, they are biased

[one...two...tree 2,762]

Another fine opinion piece by the WSJ.

yeah, they are biased

Revisionist history...seems to a main staple among Right Wing media. No wonder so many of them have contempt for higher learning.

[Ban Hammer 14,175]

Another fine opinion piece by the WSJ.

yeah, they are biased

Revisionist history...seems to a main staple among Right Wing media. No wonder so many of them have contempt for higher learning.

don't just say it, prove it. and write wsj and complain.

[one...two...tree 2,762]

Another fine opinion piece by the WSJ.

yeah, they are biased

Revisionist history...seems to a main staple among Right Wing media. No wonder so many of them have contempt for higher learning.

don't just say it, prove it. and write wsj and complain.

This is getting old. This revisionist view of the Great Depression keeps getting drummed over and over by the Right Wing. I suppose they want to recall all the school textbooks on the Great Depression now. The Right Wingers are in an imaginary fight for their ideological lives...or at least the hardcore ones. Their scared to concede on even the most minute way that government can and does work. These hardcore Right Wingers make even Reagan look like a Centrist. They are in a fight themselves....and they're choking themselves to death. Good riddance.

[one...two...tree 2,762]

The History and Revisionist Theory of the Great Depression -- Can It Happen Again?

Highlights of an interview and presentation with Dr. Antal E. Fekete at the Economic Club of San Francisco on November 4, 2008.

[luckytxn 2,265]

Don't worry there are enough sheep to keep Obama the Socialist plenty warm.