It's Still the Economy, Stupid

Seems that the business media, the government and Wall Street cherry pick the economic data to paint a rosier picture than what really exists.

Yet establishment economists are saying these jobs are not what the economy really needs. The Journal quotes Nigel Gault, chief economist at Global Insight, to the effect that “private sector jobs are the underlying driver of the economy.”

Yes they are, but these are not them. The biggest jump here is in government jobs. NBC News reported on yet more job cuts in Flint, Michigan Saturday and that manufacturing jobs are at their lowest point since 1950.

Presumably you would think the disappearance of these jobs would be upsetting to the wise men of Wall Street. In fact, they are but their concerns are being buried in stories that fuel the perception that the corner is being turned.

Example: Way down in the 19th paragraph of the Journal article Donald Kohn, the Vice Chairman of the Federal Reserve Bank, says he expected that the nation’s “economic performance would be better.” He says, “You should view these forecasts even more skeptically than usual.”

But the business press, like the market that loves any excuse for a good rally, is not that skeptical. They tend to like positive numbers and downplay negative ones often without analyzing them.

Back at the NY Times, you had to jump from page one in the Business section with its, “Job Growth Looks Rosier” headline to page 8. There, at the very bottom of the last page, next to the corporate bond data — a place most readers don’t venture —are these quotes:

“I don’t think we’re totally out of the woods yet,” said Jan Hatzius, Chief United States economist for Goldman Sachs. “There are some real problems at the foundations of the economy. If nothing really bad happens, we can muddle through and unwind some of these problems over a lengthy period of time. And if something bad happens, we go into a recession.”