Thursday, October 19, 2006

George Will on Economic Hypochondria

The Sky is Falling Chicken Little Left is roundly depants and spanked [or in Pelosi's case, mutatis mutandis] by George Will in todays WaPo.

Read Paul Krugboy in the spectacularly economically illiterate NYT Op-Ed page if you want to get your latest Orwellian dose of White is Black, Up is Down Newspeak. Or listen to Yalie GPA runner-up to George Bush:
"Worst economy since Herbert Hoover," John Kerry said in 2004, while that year's growth (3.9 percent) was adding to America's gross domestic product the equivalent of the GDP of Taiwan (the 19th-largest economy). Nancy Pelosi vows that if Democrats capture Congress they will "jump-start our economy." A "jump-start " is administered to a stalled vehicle. But since the Bush tax cuts went into effect in 2003, the economy's growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and 1990s (3.3). Today's unemployment rate (4.6 percent) is lower than the average for the 1990s (5.8) -- lower, in fact, than the average for the past 40 years (6.0). Some stall.

I finally got the weirdness of it all when I worked for The Oil Daily and saw the constant drumbeat of pessimism as the US economy worked itself out of the Carter 16% interest rates back to normal US growth patterns. Carter managed to bumble the US economy with seven different economic plans that still beggar the imagination in a search for terms to describe his incompetence. Until you get to his foreign policy mistakes from Iran to Afghanistan [the USSR saw him as a feckless wrong-footed boobie] to his famous lies about gasoline prices after his malaise speech ["America will never pay more than the 1977 gasoline price after I fix things... or some such mindless drivel.] Will has the backstory of this assault by the MSM on economic truth:
Economic hypochondria, a derangement associated with affluence, is a byproduct of the welfare state: An entitlement mentality gives Americans a low pain threshold -- witness their recurring hysteria about nominal rather than real gasoline prices -- and a sense of being entitled to economic dynamism without the frictions and "creative destruction" that must accompany dynamism. Economic hypochondria is also bred by news media that consider the phrase "good news" an oxymoron, even as the U.S. economy, which has performed better than any other major industrial economy since 2001, drives the Dow to record highs.

Dr. Sanity, a female shrink in Ann Arbor, writes lucidly about this self-delusion on the part of the affluent guilt-wracked upper class who flagellate themselves mentally by voting for sheer Luddite high-tax Ponzi rubbish. But I worked for Amoco after I wrote for the trade rag Oil Daily [still an outstanding source of reality-based economic news] and realized that these big oil companies actually generate wealth and promote economic growth almost like steroids for the world economy:
The Jack No. 2 well, in deep water 170 miles southwest of New Orleans, recently discovered a field with perhaps 15 billion barrels of oil -- a 50 percent increase in proven U.S. reserves. This news triggered a gusher of journalistic gloom: More oil means more woe -- a reprieve for that enemy of humanity, the internal combustion engine, and more global warming, more air pollution, more highway fatalities, more suburban sprawl.

The recent 20 percent decline of the cost of a barrel of oil, from a nominal record of $78.40 (which, adjusting for inflation, was well below the 1980 peak of $92 in 2006 dollars), has produced an 81-cent decline in the average cost of a gallon of regular gasoline in 70 days. For consumers, that is akin to a tax cut of more than $81 billion.

A particularly brain-challenged Dem senatorial candidate from Missouri said that GWB was "manipulating gasoline prices to influence the election." This is autism at its most mind-boggling! She actually believes in the conspiracy theories the Left perpetrates through their mainstream media propaganda organs! Vote McCaskill and bring back high gas prices! Will goes on to reveal how the MSM consciously and deliberately disguises statistics [Lies, damned lies....] to put the worst possible slant on the economy, all to help cultural elitists grab onto statist economic policies to further their agenda against free markets. [It's something they swallowed in elitist schools where Marxian flouride seems to pollute the academic mind.]
President Bush's tax cuts were supposed to cause a cataract of red ink. In fiscal 2006, however, federal revenue as a share of GDP was 18.4 percent, slightly above the post-1962 average of 18.2. And the federal budget deficit was $247.7 billion, just 1.9 percent of the $13.1 trillion GDP. That is below the average for the 1970s (2.1), 1980s (3.0) and 1990s (2.2).

It is said that employee compensation has been stagnant. But to tickle that bad news from the statistics you must treat "compensation" as a synonym for wages and then ignore the effect of taxation on individuals' well-being.

Kevin Hassett and Aparna Mathur of the American Enterprise Institute, writing in National Review, say annual wage growth since 2000 has been 0.6 percent, but the annual increase in real hourly compensation, including benefits -- and if you do not include them, why are they called benefits ? -- has been 1.3 percent. And taxes -- particularly those paid by middle-class families with children -- have declined substantially.

In the last few weeks before the midterms, the media which is heart-and-soul part of the left-wing of the Democrat policy agenda has released a torrent of, a cascade of, a tsunami of misleading and outright dishonest economic propaganda trying to convince people that all the good news they see with their own eyes is all a mirage.

As George Orwell once put it: "To see what is in front of one's nose needs a constant struggle." The Dems are counting on American voters to avoid common sense, ignore what they see with their own eyes, and drink their polluted Kool-Aid.

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