The Economy: A Reality Check

Michael Barone provides it at Realclearpolitics.com. I comment below the star line.

Barone begins - - -

"It's the economy, stupid," James Carville famously said during the 1992 campaign, when a young Bill Clinton was running against the other President Bush. The same could be said during this presidential campaign.

The headlines are full of economic bad news -- mortgage foreclosures, the collapse of an investment bank, higher gas and food prices and lower home prices. Voters routinely list the economy as their chief concern, and consumer confidence has sunk to low levels. (A recent poll found almost 2/3rds of those responding said America was already in a recession. - - JinC)

Yet at the same time, the economic numbers are not so bad. A recession is defined as two quarters of contraction. But we haven't had one yet. The gross domestic product has grown, albeit only by 0.6 percent, in the last two quarters.

As my U.S. News colleague James Pethokoukis blogged after the most recent numbers came in, "Dude, where's my recession?"

By any historic standard, our economic numbers are good, though possibly headed in a negative direction. April's unemployment was 5 percent -- a figure that once upon a time was considered full employment.

The Consumer Price Index was up 3.9 percent, largely due to price rises in energy and food. "Core inflation" was 2.3 percent. Productivity was up 2.2 percent.

Those are numbers that would have been taken as a sign of very good times when I was growing up. Then, we had recessions every four or five years and bad bouts of inflation in the 1940s, 1950s and 1970s, and unemployment sometimes surged to 10 percent nationally and to 15 percent in industrial states like Michigan.

In contrast, we've had only two mild recessions since 1983, with a third now possible but not yet in view. . . .

The rest of Barone's column is here.

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Comments:

What Barone is saying is very different from what Sens. Hillary Clinton and Barack Obama are saying. Listening to them all I hear about is how down at the heels Americans are as we face the housing crisis, the mortgage mess crisis, the gas price crisis, the cost of food crisis.

One of the crises that most concerns me is the one created by politicians who've been weakening the free market system, expanding the role of government, and doling out what are called "entitlements."

In the 1930s we started with what we were told was just some short-term emergency relief to family farmers facing a depression. Seventy-five years later the depression's gone and the family farm all but gone, replaced by agribusiness farming.

But that "short-term emergency relief" goes on and on and out to the high rolling agribusiness people to the tune of billions each year.