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Friday, September 4, 2009

Next Stop: Economic Propaganda

Joe Biden delivered a speech yesterday in which he made this, shall I say, laughable quote.

President Joe Biden on Thursday said the government's sweeping stimulus effort "is in fact working" despite steady Republican criticism and public skepticism.

"The recovery act has played a significant role in changing the trajectory of our economy, and changing the conversation in this country," Biden said. "Instead of talking about the beginning of a depression, we are talking about the end of a recession."

Nearly 200 days into the effort, Biden delivered an upbeat report card about the $787 billion rescue effort that President Barack Obama pushed through Congress. He quoted estimates by private analysts that the plan has created or saved 500,000 to 750,000 jobs so far. But many million people remain out of work.

If you think that's a whopper, just wait until September 10th. That's when the Council on Economic Advisers will present their status report for the amount of jobs created or saved so far as a result of the stimulus. If you know anything about economics, you know that it is a multi dimensional science. As such, anyone with any agenda can spin anything in any which way. I can't wait to hear the whoppers that the Council will present upon the nation in presenting jobs saved or created.

That's because the administration has created an economic statistic that can't be measured. You can measure how many jobs the economy has created or shrunk. You can measure current wages, hours, etc. You can't possibly measure what a specific policy has done. Just think about how many liberals still fail to acknowledge that the Reagan tax cuts lead to the economic recovery. So, how do you measure the immeasurable? It's easy you do it through propaganda.

The administration is losing the faith of the nation. People believe that all the stimulus did was add deficits we can't afford. So, the president needs to convince the public that his policies are working. So, the administration will do it through propaganda. Jobs saved or created isn't a statistic. It's a fantasy. So, anyone that makes a speech based on jobs saved or created is engaging propaganda. Joe Biden just did it but we're all really in for a treat on the tenth.

Of course, the President isn't the only one that engages in economic propaganda. I'm always amused by Republicans that bemoan a lack of jobs. President Bush went nearly two years losing jobs. That happened in the aftermath of 9/11. It was natural we would lose jobs. What President Obama inherited is even worse, and yet, not eight months in, the Republicans are already bemoaning a lack of jobs.

Looking at a lack of jobs in a vacuum is absurd. The president walked into office and in his first month the economy shed 700,000 jobs. Is it really realistic to expect that the jobs picture would be rosy already. In fact, since he walked into office the jobs picture has progressively gotten better minus the June numbers which were a hiccough. Now, you could argue that all of this is unnatural and it will eventually lead to a stunted recovery. In fact, that's what I would argue. That's a lot different than bemoaning a lack of jobs. That's just unrealistic.

In my opinion, one of the worst offenders is the web site, Hot Air. One of that web site's favorite tricks is to pick and choose which weekly initial job claims numbers to cover. It's so sloppy and propagandist that it's absurd. Every week BLS comes out with the weekly first time claims for unemployment. It's such a wonky statistic that most people don't cover it. It's covered in business journals and television. That's the proper place for it. If you're going to cover it, you must cover it each and every week for perspective. Hot Air picks and chooses those weeks that are bad and proclaims that Obama's policies have failed as a result. Today, they run the headline Unemployment rate at 9.7%. What they don't mention is that jobs lost this month were the lowest in a year. They don't mention the downward trajectory of losses. There's absolutely no context. It's absurd.

I see this sort of thing all the time. Politicians who try and prop up the President's policy will suddenly proclaim something like the ISM manufacturing index just broke 50. Those that oppose him will say consumer spending is still flat. What does it all of it mean? It means absolutely nothing, that's what.

Here's the reality. We are in an economic murky time. Things aren't nearly as bad as they were. Things are still horrible. Things appear to be improving, but it's unclear how much they'll improve and where the economy will be when improvement stops. So, that gives spin meisters on all sides the opportunity to proclaim anything they want. There are thousands of economic statistics. Anyone can pick the ISM index, or some weekly jobs number, or consumer spending, and make some nonsensical economic statement based on that isolated number. We are in for economic propaganda.

Just take the unemployment rate. Robert Gibbs just said "we are seeing a lessening of the economic contraction" Meanwhile, opponents fixate on the unemployment rate which jumped to 9.7%. Of course, there's a million ways to look at that. The unemployment rate itself is calculated in a rather obtuse way. For instance, all those that are "frustrated" and unemployed aren't included. Who is frustrated? Who knows? The bottom line is that sometimes the unemployment rate jumps because people stop being frustrated and look for work. So more people are looking for work. So, it's not necessarily a bad thing to see the unemployment rate jump. That won't stop both sides from engaging in economic propaganda.

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