Department of Hmmmmm…. (Economics News)

Some Economic News:

LA Times: “Los Angeles County poverty rate fell in 2007, census data show: Other Southern California counties also show slight declines. The effects of the sharp economic downturn and rising unemployment since last year are unclear.

LA Times: “A gauge of consumer confidence has its biggest increase in two years this month.

NY Times: “Average U.S. Income Showed First Rise Over 2000

Then a LAT article asks:

We have a market paradox on our hands. Consumer confidence is close to a 40-year low, suggesting that the economy is in worse shape now than in times that seemed far darker, such as the early 1980s, when both inflation and unemployment crept into double digits. Yet many of the current economic indicators, including inflation and unemployment, are rather positive — or at least not as negative as consumer sentiment implies.

So why are consumers, myself included, so gloomy?

The article goes on to suggest that consumers helplessness in the face of larger economic challenges drives the negative sentiment.

I’ll suggest an alternate answer – and actually pass on the obvious one which that the media is bearish on the economy – like they are on foreign policy, the environment and everything else – out of partisan loyalty to the Democratic party. Personally, I’ve heard this, think it’s interesting, but don’t buy it.

I’ll suggest another reason:

New York Times Co., the third-largest U.S. newspaper publisher, reported revenue fell 10.1 percent in July as a slumping U.S. economy led to the steepest monthly declines in retail and classified advertising this year.

Ad sales decreased 16.2 percent to $129.4 million from a year earlier, led by drops of 30.1 percent in classifieds and 13.3 percent in retail ads, the New York-based company said today in a statement. July revenue was $235.9 million.

The people whose job it is to shape our attitudes about our economy are among those getting slammed the worst by the current – admittedly complex – economy.

I can’t help but believe their own tribulations bleed over into their perceptions of the wider world.

I’ve said for a long time that the economy is like a Napoleon – what the French call a mille-feuille (thousand layer pastry). The layers are loosely connected to other layers, but connections are much more strong within the layer itself.

Just food for thought.

21 thoughts on “Department of Hmmmmm…. (Economics News)”

  1. [Steve, this is your second and final warning. Did you notice your first?

    WoC doesn’t do link exchanges that way.

    Stick around and contribute substance, and / or get in touch with Armed Liberal or Joe Katzman via the published addresses in the right margin, and maybe it happens.

    Any more blogrolling sp*m from you will be cause for a ban. –NM]

  2. OT: Some crushing of free speech in the UK

    Harry’s Place, a liberal hawk site had its DNS disabled due to malicious complaints after they exposed a college email list for publishing links to a David Duke website as valid reference information.

    “More Info1″:http://www.britishblogs.co.uk/theme/harrys-place-company-hosting-hps-domain-hosting-hps-domain-name/

    “More Info2″:http://threescoreyearsandten.blogspot.com/2008/08/another-harrys-place.html

    [I’ll leave it to the entry author to determine if this post is OT enough to merit deletion / warning, my opinion notwithstanding. –NM]

  3. Spam cleanup on Aisle #1…

    But on topic: Marc, why is it either/or? The media can be in the economic crapper AND be hopelessly biased, AND those can be related. You probably picked the best example going of the effect: Pinch Sulzberger’s successful attempt to turn the NYT into a leftist house organ, that those of other persuasions will go out of their way to avoid supporting with either cash or attention. He and the NYT shareholders are being rewarded accordingly.

    The stain of casual smears and leftist cant have spread further into the old media, tainting papers and magazines that you think ought to be, by domain or reputation, somewhat above that sort of thing. And the net makes it increasingly possible to cut loose the offending publications and substitute with blogs or information direct from source. In our household, the butcher’s bill so far includes The Economist and Scientific American, along with the unmissed SF Chron.

    The LAT is simply inhaling its own exhaust fumes – taking the bleat that it puts out as the actual state of the world, and trying to make another story when the world carries on in its own way regardless. Meanwhile the citizenry observes that in spite of the LAT’s assurances that they have been shot, they are not bleeding, and get on with life, yet another bit more skeptical of the MSM.

  4. I apologize for the OT post. I read both sites and they have some similarities in viewpoint. HP was unavailable for 2 days so I made the post above in case AL was interested. They seem to be up now.

  5. LAT:

    the economy is in worse shape now than in times that seemed far darker, such as the early 1980s, when both inflation and unemployment crept into double digits.

    That would be the late 70s, not the early 80s, and yes, it makes a difference. When I see a mistake like that in a paper of the LAT’s reputation, I assume it to be a deliberate, politically motivated lie.

  6. i don’t know, people are pretty freaked about housing right now, and for a good reason. As I said before, a friend of mine resells houses that have been foreclosed on. He lives in a NC beach community that’s had a pretty resilient housing market until recently. Unfortunately, the housing market has fallen in and he’s now working 7 days a week trying to keep up with the glut of properties the banks need to get rid of. He’s helping us house hunt at a minimum cost (because he doesn’t need the extra work).

    And with Fannie Mae & Freddie Mac (and other banks, such as WaMu) falling into the crapper, many people are scared that a domino affect will somehow affect their mortgage or their access to credit.

    And without credit, how will the American consumer market survive?

  7. How you see the housing market depends on where you live and how old you are, among other factors.

    Live in California? Yeah, your bubble has burst. Having (or not having) a Prop 13 tax rate affects a lot of buying and selling decisions there. (Full disclosure: we own a home in the Bay area that we are currently renting out.)

    Own investment / recreation property in places like the NC coast? Ooops – people seem to forget that there is risk involved in high return investments.

    It’s hard to remove those distortions to see how many families are in serious danger of losing homes they appropriately bought with mortgages they could reasonably cover (including adjustments). Some, I’m sure — and a credit implosion will affect a lot of otherwise prudent people who want to buy a home. But it’s a mistake IMO to take summary stats and annecdotal info from bubble areas on the coasts and from those draw conclusions about the economy as a whole.

  8. I’ll suggest an alternate answer – and actually pass on the obvious one which that the media is bearish on the economy – like they are on foreign policy, the environment and everything else – out of partisan loyalty to the Democratic party. Personally, I’ve heard this, think it’s interesting, but don’t buy it.

    Back in 1992, the economy was going through a slow patch. Bill Clinton and Al Gore were running around lying about it being the “worst economy in 50 years.” No one in the Press called them on it. A few days after the election, they finally reported that not only wasn’t the US in a recession but that economic growth was actually pretty good.

    I’ve never trusted the Press since. If the Press can’t be trusted to tell the truth then to hell with them. It wouldn’t surprise me at all if a lot of other people share my opinion of the Press. If so, that may explain their declining revenues and job prospects.

  9. Your filter is always fascinating, A.L. Really – 1st off – “first rise in incomes since 2000″ says something right there, about how Bush managed the economy.

    Secondly – while inflation as measured when taking out things like – oh, food and gas – aren’t that high – real prices have been raising quite dramatically this year – so adjusted incomes aren’t higher.

    Third – housing is a pretty dramatic story, of an up and down, and a rather crashing down. Of course the news would run with it.

    I wonder – every time you focus on bias on the left, I wonder, should I point out bias for the right? I agree with you on news in general – but I can find just as many stories tilted in the direction of center right corporatist policies, and away from any real “left”.

    This is the thing – a right-center corporatist oligarchy, isn’t really that concerned about conservative social issues. So you can find lots of bias towards the left on social issues.

    But, when it comes to economic issues, you find just as much bias to the right.

    Remember, Larry Kudlow, an idiot if there ever was one, has his own show. Glenn Beck – has his own show. Fox News exists for one purpose. Scarborough has 2 hours in the morning.

    And yet, Rachel Maddow, sends the analysts into a flutter, because she is liberal.

    You pick and choose your bias – and from what I’ve seen, aren’t really interested in neutral studies about what type of bias shows up where. Instead, you pick out stories that confirm your own prejudices.

    At some point though, I get tired of writing this. But you don’t get tired of your confirmation bias.

  10. Scarborough has 2 hours in the morning.

    You live in a dismal and resentful world, hypo. But occasionally one is touched by its poignant detail.

    The other three people who watch MSNBC in the morning seem perfectly content with it.

  11. Heh, Glen,

    I love your comments buddy!! There is no better apologist for the GOP than you, so when you laser in on some small detail of what I write, it’s always a hoot, given your ignoring of the larger point.

    At any rate, pithy ad hominem you’ve got going. Well-played!

  12. Uh, hypo – didn’t I write “…and actually pass on the obvious one which that the media is bearish on the economy – like they are on foreign policy, the environment and everything else – out of partisan loyalty to the Democratic party. Personally, I’ve heard this, think it’s interesting, but don’t buy it.” ??

    So what, exactly are you criticizing??

    A.L.

  13. hypo, your bias filter is showing. Morning Joe is co-hosted by Mika Brzezinski. Or is that too poignant of a detail?

    But what do you disagree with on the main point of the piece?

    bq. _Yet many of the current economic indicators, including inflation and unemployment, are rather positive — or at least not as negative as consumer sentiment implies._

    Do you believe consumer sentiment is appropriately in line with economic indicators? Why or why not?

  14. Well, to a degree, I’m responding to some of the more recent posts regarding media. Although, the point also remains the same, regarding is the economy “better” than is being reported?

    There is again confirmation bias in the your examples.

    However, you are correct, in that your point, that I didn’t notice your main point – that the economics of the newspaper business are pretty bad, and that itself might influence things.

    Very well could be.

  15. PD,

    Well, the show isn’t called “Joe and Mika”, so I think I’m on good ground there.

    Regarding economic indicators, and consumer sentiment. It’s not a simple yes and no.

    For example, because of Social Security, those over 65 have actually been gaining in the last few years.

    Not so true for working families though – economic stagnation IS the case there.

    “Here’s Paul Krugman”:http://krugman.blogs.nytimes.com/2008/08/27/stagnation-nation/.

    The chart speaks volumes. In that sense, consumer confidence is accurately following that there simply hasn’t been a “bettering” of circumstances for the regular guys and gals.

    Income has remained stagnant – while at the same time, as Dean Barnett has noted:

    _The other important point to note in connection with house prices is that inflation has picked up so that house prices would be falling rapidly in real terms, even if nominal house prices were flat. Over the last quarter, the CPI, excluding the rental components, increased at 14.1 percent annual rate._

    That’s a huge jump, considering that incomes have been stagnant. So again – what’s the DIRECTION? Certainly not a bettering for people, in their incomes.

  16. The economy always goes two steps forward, one step back. Higher highs and higher lows.

    Here in the Bay Area, every restaurant, bar, and movie theater is always PACKED. Every highway is full, even at $4 gas (peaking at $4.50 a few weeks ago). Even the Great America amusement park, despite its $55 tickets, is packed every weekend.

    If this is a recession, it is indistinguishable from a boom, on this ANECDOTAL data.

  17. I certainly think that both the left-wing bias of newspapers, as well as their own troubles, are true.

    Newspapers decided to become left-wing. This cost them the majority of their audience. They NYT has been declining for years, long before the current recession started. It was declining even during the robust 2005-07 period.

    “Just look at the NYT stock chart even during the boom years”:http://finance.yahoo.com/q/bc?s=NYT&t=5y&l=on&z=m&q=l&c=

    So, yes, their own layoffs/troubles cloud their own writing, but this itself is due to a dishonest leftist bias. Thus, they are truly reaping what they sow.

  18. Didn’t AL himself discontinue his subscription of the LAT, due to extremism on the part of the journalists there?

    It is not just right-wing people who are moving away from newspapers. If the LAT can manage to lose AL, they have lost their business model.

  19. GK: the biggest killer of newspapers is not a “new liberal outlook” but the fact that people don’t need newspapers anymore. From my understanding, business people used to by two papers, one in the morning, one in the afternoon to catch new developments. Why do that if you have the internet? That’s a good chunk of circulation out the window without any change in production.

  20. Up until recently, the consumer part of the economy was (artificially?) bolstered by the ability to use the family home as an ATM. That’s gone, and with it the buffer that kept many Americans psychologically secure in the economy. People are also afraid that changes in the economic structure, e.g. outsourcing, are systemic rather than cyclical, so people not only lose jobs but entire careers. (The move away from dead-tree media would be one small example with a different cause.) I don’t think newspapers are creating the lack of consumer confidence. Real life is.

    It all started, by the way, with Bush’s tax cuts for the very wealthy, which, you will recall, he assured us would not result in a deficit. (Even after the deficit began, he assured us it would be “small and short-term“.) The deficit ballooned at the time in the economic cycle it should have been shrinking. I suppose the eventual plan was to eliminate Social Security to the benefit of Republicans in the Financial Planning and Pet Food industries.

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