Why is there a disconnect between reporting, reality?
BOB RAYNER
POINT OF VIEW: Mar 7, 2004
Well, I guess it's official now. The economy is going down the drain.
Billy Crystal informed us during the Academy Awards telecast last week that "the economy is in the tank."
I can deduce with some certainty that Crystal didn't reach this conclusion through personal experience. My guess is that he's been watching the news on TV and reading his newspaper, where the hopeless decline of the American worker has been chronicled with a rising fervor.
It's almost impossible to make it through the day without facing another story about our army of laid-off factory workers and the boarded-up manufacturing plants that are springing up across the country like so many malignant mushrooms.
ABC News and Money magazine conduct an interesting weekly poll that gauges people's take on the economy. Confidence had been building steadily since summer, when a little more than 20 percent of Americans described the national economy as "good" or "excellent."
By mid-January that figure had climbed to 44 percent. But then, beginning with a Jan. 27 survey, the confidence level began to plunge, and by early March only 33 percent said the economy was good or excellent.
Interestingly, 56 percent - including Billy Crystal, no doubt - described their personal financial situation as good or excellent.
Several other widely followed consumer sentiment surveys took similar dives in February after months of steady improvement.
What happened in the last couple of weeks of January to precipitate such a dramatic downturn in Americans' optimism about the economy?
Did the stock market plunge? Was there an unexpected rush of massive layoffs? Were paychecks suddenly smaller? Did retail sales stall? Business investment decline? Home prices fall? Interest rates surge? Inflation re-ignite?
No, no, no, no, no, no, no, and, one more time, no.
The big economic event that sent confidence skidding in January was, drum roll please: the start of Democratic presidential caucuses and primaries and the massive attention that they, quite rightly, drew from the news media.
Democrats trotted out all kinds of gloomy stories about the economy to bolster their case against President Bush. No real problem there. That's the job of opposition parties after all. And I don't really blame them - they're politicians - for exaggerating their economic statistic.
Not statistics, mind you, but the singular form of the noun. The Democrats' entire economic argument relies on one survey - the Labor Department's tally of monthly nonfarm payrolls.
That's the figure, you've no doubt heard about 80,000 times, that showed a decline of 2.6 million jobs since that economically significant month of January 2001, which, coincidentally, is when George W. Bush took office.
I'm not going to mimic the Republican campaign points about how many challenges the country has faced since 2001, even though many of my colleagues across the country have done a fine job mimicking the Democratic talking points about Bush being the worst president since Herbert Hoover.
I will suggest to those reporters covering the John Kerry campaign that the next time he says Bush cost the U.S. economy 3 million jobs, they gently remind their viewers and readers that, while it's a fine applause line, it is - not to put too fine a point on things - inaccurate.
Even by the most pessimistic measure - the nonfarm payrolls - job losses now stand at about 2.2 million since January 2001. Not a pretty number I'll admit.
Of course, since the Bush-led tax cuts hit the economy last summer, those payrolls have increased by 364,000 jobs.
And a second Department of Labor survey, which does a better job counting new employment at small entrepreneurial startups, shows a seasonally adjusted gain of 1 million jobs in the past year and 511,000 since Bush took office.
Job growth does appear to be slower than in previous recoveries. Just how much slower is a matter of some debate. But virtually every other measure of economic health reveals a country that is growing, prosperous and moving vigorously in the right direction.
I hate to bore you with a flotilla of buoyant statistics, but I feel compelled to do so, mainly because many other reporters seem unable or unwilling to mention them. It's much easier, I guess, to serve yourself up as a megaphone for the Kerry campaign.
So here goes. I'll make this as quick as possible:
The net worth of all U.S. households recently hit $44.4 trillion, the highest level ever.
More than two-thirds of American families own their homes, the highest percentage ever.
Weekly initial jobless claims nationally have dropped from a high of 459,000 last year to 345,000 last week.
Consumer prices increased just 1.9 percent in the past year.
The unemployment rate has dropped from 6.3 percent in June to 5.6 percent in February. The average unemployment rate since 1980, by the way, is 6.3 percent. And the average was about 5.7 percent in the 1990s.
The stock market, as measured by the broad Wilshire 5000, has advanced about 45 percent in the past 12 months.
Gross domestic product, the total goods and services produced in the United States, increased at an annual rate of 8.2 percent, after inflation, in last year's third quarter and 4.1 percent in the fourth. Growth in the 1990s averaged a little better than 3 percent annually.
Last year saw a 2.3 percent increase, after inflation, in take-home pay, which economists prefer to call per capita real disposable personal income. Because the figure spread over the entire population, people with jobs - and that's most people - actually fared a bit better than that. Disposable income continued to climb sharply in January.
There are many more positive numbers out there - housing starts, retail sales, investment in capital equipment - but I think you get the picture.
The economy is much closer to boom than bust and there's no excuse for reporting it any other way.
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