Jewish World Review March 10, 2004 / 17 Adar, 5764
Economy is being politically driven
Consumers are losing confidence in the economy even as almost all economic
indicators suggest that for more than six months, it has been growing faster
than at any time in nearly 20 years.
ABC News and Money magazine conduct a weekly poll of consumer confidence.
In mid-January, 44 percent of those surveyed described the U.S. economy as
"good" or "excellent," up from barely 20 percent in the summer of 2003. But
by the first week in March, only 33 percent of Americans described the
economy as "good" or "excellent," noted Bob Rayner, a business writer for
the Richmond Times-Dispatch.
What has caused the downturn in consumer confidence has not been an economic
event, but a political event. Democrats have been talking down the economy
throughout the Democratic primaries, and the news media have been giving
enormous and uncritical publicity to their charges.
This is evidenced, Rayner notes, by an anomaly in the consumer confidence
surveys. Though only 33 percent of those surveyed described the economy as
a whole as "good" or "excellent," 56 percent described their own personal
financial situation that way.
The Democratic argument is that this has been a jobless recovery, an
argument fueled when the Bureau of Labor Statistics (BLS) reported that U.S.
employers added only 21,000 jobs in February.
Employers reported that this January 130,132,000 Americans had jobs, down
from 132,388,000 in Jan. 2001, the month that President Bush took office.
Displaying the cavalier attitude many Democrats have toward arithmetic, Sen.
John Kerry describes this as a loss of "3 million" jobs.
But in addition to contacting employers to ask them how many people they've hired, the BLS also surveys households to inquire how many people in them are working. According to the household survey, 138,566,000 Americans were working this January, up from 137,790,000 in Jan. 2001.
There are always some differences between the employer survey and the
household survey, but this difference 8.43 million jobs is pretty
profound. How come?
Part of it could be sampling error. BLS contacts 400,000 businesses of all
types each month for its employer survey, but only 60,000 households.
A bigger part of the problem is that the employer survey under-counts small
businesses, which are the first to hire new people when a recovery begins,
and doesn't count the self-employed at all.
My wife, Pam, is an illustration of this dichotomy. She quit her job at the
newspaper where I work to free lance and write a book. Pam would be a job
loss in the employer survey, but if BLS had contacted us in its household
survey (it didn't), she'd have said emphatically that she was working.
The decline in the unemployment rate from 6.3 percent last June to 5.6
percent in February suggests that the household survey is the more nearly
It is understandable that Democrats would choose to emphasize the employer
survey, because it is in their interest to paint the economic picture as
gloomily as possible. What is not excusable is the failure of most in the
media even to mention the household survey, the disparity between the
household survey and the employer survey, and the possible reasons why this
"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," wrote the
But many in the news media are more interested in helping the Democrats beat
Bush than in providing viewers and readers with the facts and perspective
that would help them judge economic performance.
An example of this is how the unemployment numbers are being spun. By coincidence, the unemployment rate in January 5.6 percent is exactly the same as it was in Jan. 1996, when President Clinton began his re-election campaign. CNN, described it as "low" then, but says now the very same unemployment rate indicates a weak job market. (The average annual unemployment rate since 1980 has been 6.3 percent, Rayner notes.) President Bush must do more to get the truth to the American people, because the people whose job it is to report the facts have other priorities.
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