Bob Herbert Does His Best to Talk Down the Economy
One of the many downsides of the mid-September takedown of its TimeSelect firewall by the New York Times is that the general public must endure exposure to the uninformed rants of Bob Herbert.
With all due respect to the chairman (Fed Chairman Ben Bernanke), he would see the recession that so many others are feeling if he would only open his eyes. While Mr. Bernanke and others are waiting for the official diagnosis (a decline in the gross domestic product for two successive quarters), the disease is spreading and has been spreading for some time.
As I noted Monday, The Institute for Supply Management's (ISM's) October report on manufacturing, which is about 12% of the economy, read "expansion" (though not by much) for the ninth straight month, and 51st in the past 53. October's ISM "non-manufacturing" report, covering the vast majority of the rest of the economy, including residential construction, read "expansion" for the 55th straight month, and with a stronger result than in September (as usual, "surprising" analysts who had expected a decline). The ISM reported that the economy as a whole expanded for the 72nd straight month.
Where is the "disease," and how can it have "been spreading for some time" with so much recent good news?
Oh, but Business-Economy Expert Bob, citing absolutely no evidence, has the answer: Thousands of government employees have been co-opted by the eeeeeevil Bush Administration to lie about the economy for years. No he didn't use those words, but he clearly implied them:
..... The country has been in denial for years about the economic reality facing American families. That grim reality has been masked by the flimflammery of official statistics (job growth good, inflation low) and the muscular magic of the American way of debt. .....
In the process of constructing his alternative reality, Herbert exposes the ignorance of an Empire State congressman:
..... In an interview after the hearing, Representative Hinchey discussed the disconnect between official government reports and the reality facing working families. He noted that the unemployment rate does not include workers who have become so discouraged that they’ve given up looking for a job.
Hinchey is correct, but is also clearly implying that the pool of discouraged workers is huge, and increasing. It is neither, as the Bureau of Labor Statistics (BLS), in its Employment Situation report on November 2, clearly stated (bolds are mine):
Nearly 1.4 million persons (not seasonally adjusted) were marginally attached to the labor force in October, about unchanged from a year earlier. These individuals wanted and were available to work and had looked for a job sometime during the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 320,000 discouraged workers in October, little different from a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 1.0 million persons marginally attached to the labor force in October had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance and family responsibilities.
If every single "marginally attached worker" was (incorrectly) counted among the unemployed, the unemployment rate would be a whole 0.9% higher. The marginally attached and discouraged worker numbers as a percentage of the total workforce have not risen significantly over the past decade.
Oh, I forgot. BLS must be part of Herbert's "flimflammery."
(By the way, if Herbert wants to investigate possible "flimflammery," he should look into why Gross Domestic Product growth in the first three quarters of 2000, the three quarters in the runup to that year's presidential election, were originally reported as 4.8%, 5.6%, and (in the last report before the election) 2.7%, respectively, when the final results recorded at the government's Bureau of Economic Analysis are now 1.0%, 6.4%, and -0.5%, respectively. I'm not kidding.)
Back to Herbert:
And the most popular measure of inflation, the Consumer Price Index, does not include the cost of energy or food, "the two most significant aspects of the increased cost of living for the American people."
Wrong.. There is an overall statistic, and one that excludes food and energy. There's no need to prove this with a link.
The elite honchos in Washington and their courtiers in the news media are all but completely out of touch with the daily struggle of working families. Thirty-seven million Americans live in poverty and close to 60 million others are just a notch above the official poverty line.
This does not at all square with the recently-released findings of The Conference Board, noted by yours truly yesterday (NewsBusters; BizzyBlog), but nearly totally ignored by Old Media. This would explain why Herbert isn't aware of this remarkable news:
About 73 million U.S. households now have discretionary income, up from about 57 million in 2002, according to a report by The Conference Board. The percent of the U.S. population with discretionary income has increased to nearly 64 percent, up from 52 percent in 2002.
Let's break it down:
- There were about 115 million households in the US a year ago, and 299 million people.
- If 73 million had discretionary income 42 million didn't.
- If the family sizes of those with and without discretionary income were the same, that would leave 109 million Americans in households with no discretionary income. If 37 million Americans are living in poverty, that leaves 72 million.
- Bob Herbert is absurdly claiming that 60 million, or 83%, of that 72 million is "just a notch above" poverty. No, way.
Not only does the Conference Board report blast Mr. Herbert's claim out of the water, but as chronicled yesterday, it continues a quarter-century march of significant improvement. The percentage of Americans with discretionary income has gone up from 30% or so in the 1980s, to 50% or so during the 1990s up to about 2002, to the last year's 64% (actually 63.5% before rounding) just reported.
The Conference Board isn't even part of the government. This is some conspiracy Bob Herbert has cooked up.
Bob Herbert is either assuming that the depressing financial situation at his company, and the circulation conditions in his industry, are reflective of the entire economy, or he's part of the high-DB horde trying to capitalize on the difficulties in the housing and mortgage lending sectors to talk down the rest of the economy. I believe it's the latter.
Cross-posted at BizzyBlog.com.