According to one UCLA economist, the U.S. is economically sound, but people have panicked because of "scary" warnings surrounding the $700 billion bailout.
"Periods of crisis often beget bad policies," Lee E. Ohanian, an economist at the University of California, Los Angeles (UCLA) said in an interview with Reason.tv. The professor stressed that six weeks ago the fundamentals of the economy looked "pretty good," before bailout "rumors" caused "panic":
What I mean by fundamentals are the amount of factories and office buildings and capital equipment we have in place, there's no change in that. There is no change really in individuals' interest in working. We've got the same work force right now we had six weeks ago. Productivity is about the same as it was perhaps even higher. All those fundamentals of the economy are the same.
Ohanian said Gross Domestic Product growth over the last five to six quarters was "on average," and productivity growth was "very high"
Video after the jump.
"We've never had a recession in the history of the United States where we had high productivity growth," said the professor. He also said there was strength in the credit markets, consumer non-mortgage borrowing and business lending.
"So, again you look at those numbers and say, ‘Ok, we've got some subprime problems but the big picture looks good.'"
Ohanian criticized the handling of the credit crisis by Secretary of Treasury Henry Paulson and Federal Reserve Chairman Ben Bernanke because the government intervention caused people to panic.
"Secretary Paulson and Chairman Bernanke when they first proposed the rescue plan told Congress, ‘If you don't pass this and if you don't pass this right away, we may not have an economy in a couple of days,'" the professor said. "And those types of messages - very scary, frightening messages were issues sort of on a daily basis, by, including President Bush, and people hear this and people start to get scared."
In 2004, Ohanian and another UCLA economist, studied the policies of President Franklin Roosevelt's New Deal and determined those policies prolonged the Depression by seven years.
Harold L. Cole and Ohanian blamed anti-free market measures for the slow recovery in an article published in the August 2004 issue of the Journal of Political Economy. The two asserted that Roosevelt thought excessive business competition led to low prices and wages, adding to the severity of the Depression.
—Paul Detrick is a research analyst at the Business & Media Institute.




















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November 3, 2008 - 14:45 ET by NorthCoasterall of the pols like Chuck Shumer and the other talking heads who precipitated this psychological attack on our investment and banking system!
There's a reason why yelling fire in a crowded building is against the law!
This is completely true.
November 3, 2008 - 14:46 ET by mbuelMcCain should've hammered this home and not let the Obama campaign bully him into submission. This was a completely MANUFACTURED crisis, and was the democrats october surprise.
"As long as the economy is bad, my numbers are up, I'm going to keep talking about the economy!" - Obama
"Periods of crisis often beget bad policies,"
November 3, 2008 - 14:54 ET by MikeknaJ"Periods of crisis often beget bad policies"
Ain't that the truth. Sadly.
"Look, when Keith anchors, he plays it straight down the line.”
-MSNBC President Phil Griffin
http://www.xanga.com/mikeknaj
so sad it's funny.
November 3, 2008 - 14:58 ET by sawing battabut wait, i just watched all the talking heads tell me that the turning point of the election was McCain saying the fundamentals were OK.
The press has been telling us how bad things are for a year...any wonder sentiment is down?
now, watch for a "miraculous" turnaround based on "hope" and the promise of an Obama presidency...shazaam.
Journalists have failed America.
Media caused the meltdown.
November 3, 2008 - 15:27 ET by Blogger Guy00001The media know exactly what they are doing. They know that they have immense power over the minds of most mind-numbed Americans who don't read other sources and don't think for themselves.
The media brought about the meltdown in order to get their head marxist elected.
the people making the policies
November 3, 2008 - 15:38 ET by katainkentare listening to (and believing!) the same stupid soundbites we are pelted with everyday. Dont believe me? Keywords and phrases pop up consistently and without much variation. You get the DISTINCT impression people arent even bothering to do their own research, much less their own thinking anymore because they feel too hard pressed to get a story out there before the next guy does.
if journalism was a physical product it would be the mechanical equivalent of a Yugo. Epic fail.
Also remember that if we
November 3, 2008 - 15:48 ET by TexasteacherAlso remember that if we don't religiously follow the lifestyle that Al Gore would have us live, the planet will burn up and die in 10 years.
I don't know what depression everyone else is in, but the only financial thing in my life that has had a big change is that I only spend $60 a week in gas as opposed to $90-110.
Sadly,
November 3, 2008 - 17:41 ET by NorthCoasterI have anumber of friends who will be voting for OBAMA. All I hear from them is the propaganda or talking points from the MSM. Some even believe that they will benefit from government largesse. They all are voting on emotion because the MSM has drilled the negatives of the economy and and President Bush for 8 sad long years. I feel sad that they are believers and will be heartbroken when reality hits and they find out the truth about OBAMA.
Same old story
November 3, 2008 - 18:23 ET by Indiana JoeThe same media that's been trying to convince us we've been in a recession for the past two years is now worried that we're heading for one. Who is calling them on this?
I've tried to tell people, perception and confidence is almost everything in economics. Phil Gramm had it right, he just didn't state it diplomatically enough. Roosevelt's "nothing to fear" statement went down in history; Gramm was lambasted for saying pretty much the same thing.
And our "leaders" were so anxious to look like they were "doing something" that they caused the disaster they claimed was coming. Self-fulfilling prophesy, plain and simple.
It's true, there's nothing different about the overall economy now than there was 6 weeks ago. In fact, with oil prices down, we should actually be in better shape. Except now we're part-owners of this result of government meddling called the "housing meltdown." We didn't just "re-arrange the deck-chairs;" we bought tickets on the Titanic after it hit the iceberg!
We should have let it sink on it's own, and saved ourselves a lot of money... including our 401(k)s.
"Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other." - John Adams
A Few Details
November 3, 2008 - 20:23 ET by Junk Science SkepticHad to look up some numbers for a report the other day.
Average unemployment during Clinton's first seven years = 5.4%
Average unemployment during Bush's first seven years = 5.2%
Average annual employment under Bush was 13 million people more than under Clinton (and that's just documented workers).
Even with the perfect storm of the Dem-created energy crisis and the Dem-created mortgage crisis, Bush's unemployment numbers for the full term will be no worse than Clinton's full term.
The so-called wealth gap is measured by economists with something called the Gini index. The gap between rich and poor did expand during the Bush administration, but under Clinton the Gini index shows that the gap expanded 29 times as much.
I could go on and on, but the bottom line is that the media has grossly distorted the economy for the last eight years.
We hear about the "peace and prosperity" of the Clinton years. The record of terrorism against America pretty much blows away the peace claim, and the earnings that made up that prosperity were subsequently restated.
Bush has been an absolute dunce at protecting the presidency and the GOP brand, but he has effectively protected the nation, and has presided over an economy that by any rational measure has been as good or better than that during the Clinton years.
$700B Bailout
November 3, 2008 - 20:40 ET by JDWFannie and Freddie control 70% of our mortgages! We are ignoring our constitution and creating systems outside of the enumerated powers. The big scare tomorrow is even more intrusive government.
JDW
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