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Posted: 2:10 AM, March 2, 2010
John Crudele
Come real close to the page. I want to whisper a secret in your ear.
Pssst . . . Americans are not happy.
You already know that, of course, because you are a regular, communicative human being who lives in the real world.
You go to the supermarket and hear other shoppers complain about the cost of putting food on the table. And you listen to neighbors bitch about job prospects.
You even notice that the price of gasoline and home heating oil hasn't gone down despite all that's wrong with the economy. The laws of supply and demand, which would have you believe we'd be paying about $1 a gallon for gasoline right now, have been repealed by Wall Street's speculators.
Your kids are getting an expensive education that you fear will be worthless because they'll never be employed anywhere, much less in their chosen field.
And you are probably avoiding the doctor because even if you are lucky enough to be covered by insurance, the co-payment on the prescription will mess up the family budget for a month.
You know all this. It has you worried.
Yet the depressed state of the American public seems to be a surprise to people who run the country. Not a total surprise, mind you, because politicians are clearly worried about being kicked out of office, which would mean they'd have to find a real job in a weak economy.
But these politicians and the Wall Street folks still happily pulling down the big bonuses were clearly not ready for the news last week about the complete, utter, total, absolute and unqualified miserableness of the public.
To recap: the Conference Board, a private, unbiased research organization, reported that its consumer confidence index fell horribly to 46.0 in February from 56.5 last month. And I checked -- there was no statistical fluke that could have caused such a startling drop.
Some fools even tried to dismiss that figure as a reaction to the weather, meaning the lack of blizzards in the months ahead should make everything alright again.
Then, ABC News reported that its Consumer Comfort Index plunged to the minus-50 mark and now hovers just four points from its record low.
The Conference Board survey is particularly interesting because it's broken up into two components.
The "Present Situation Index" -- meaning, how's your life today? -- dropped nearly six points to 19.4. But the "Expectations Index" of how those surveyed believe the economy will be six months from now declined a whopping 13.5 points.
Holy crisis!
Even with the stock market still bubbling and media trying its damnedest to convince us at least a million times a day that there's an economic recovery, the American public isn't buying it.
Worse, we've become a clinically depressed nation that doesn't think the situation will ever get better.
OK, so what's really going on?
Well, this is what you get when the government lies to people and when those in elected office believe their own fibs.
At this point in my rant I have to go back over a lot of things I've already written about -- like government reports on economic growth that mislead, and employment surveys from Washington that fudge the truth and inflation claims that insult the intelligence of even the most dim-witted among us.
But the public's bad mood also has to do with expectations. Promise people improvement and they expect you to deliver. Deliver too little and they are going to be angry.
Has the economic situation improved over the past year? Sure.
In late 2008, politicians of both parties with their eyes on winning (or in the case of the Republicans, keeping) the White House managed to bring the nation's banking system to the brink of failure. That'll happen when you utter the words 'brink of failure' enough.
It is one of those statements that's self-fulfilling.
The economy has stabilized since then, helped greatly by the fact that some wealthy people feel wealthier because of an unbelievable snap back by the stock market during 2009. (And by unbelievable in this context I mean that what happened shouldn't be believed as either legitimate or sustainable.)
But the economic data that is being cheered hasn't really been that great.
For instance, as I've said before, the growth in the nation's gross domestic product in the fourth quarter, which was widely described as impressive, really wasn't. Most of the 5.9 percent an nualized gain came from a re building of inventories by companies and a make-be lieve drop in inflation.
It's been estimated that just 1.7 percent of the increase came from consumer spending, the biggest factor in the economy. Most of the rest of what was manufactured is sitting in warehouses.
And if you understand what the word annualized means in this context, there's less to cheer about.
When you divide that annualized 1.7 percent consumer spending into the four quarters of the year, you see there was only slightly more than an 0.4 percent expansion in the final four months of 2009.
So, Americans aren't happy. What a surprise!
john.crudele@nypost.com
http://www.nypost.com/p/news/busines...KbNlGuorM8tN3M
Posted: 2:10 AM, March 2, 2010
John Crudele
Come real close to the page. I want to whisper a secret in your ear.
Pssst . . . Americans are not happy.
You already know that, of course, because you are a regular, communicative human being who lives in the real world.
You go to the supermarket and hear other shoppers complain about the cost of putting food on the table. And you listen to neighbors bitch about job prospects.
You even notice that the price of gasoline and home heating oil hasn't gone down despite all that's wrong with the economy. The laws of supply and demand, which would have you believe we'd be paying about $1 a gallon for gasoline right now, have been repealed by Wall Street's speculators.
Your kids are getting an expensive education that you fear will be worthless because they'll never be employed anywhere, much less in their chosen field.
And you are probably avoiding the doctor because even if you are lucky enough to be covered by insurance, the co-payment on the prescription will mess up the family budget for a month.
You know all this. It has you worried.
Yet the depressed state of the American public seems to be a surprise to people who run the country. Not a total surprise, mind you, because politicians are clearly worried about being kicked out of office, which would mean they'd have to find a real job in a weak economy.
But these politicians and the Wall Street folks still happily pulling down the big bonuses were clearly not ready for the news last week about the complete, utter, total, absolute and unqualified miserableness of the public.
To recap: the Conference Board, a private, unbiased research organization, reported that its consumer confidence index fell horribly to 46.0 in February from 56.5 last month. And I checked -- there was no statistical fluke that could have caused such a startling drop.
Some fools even tried to dismiss that figure as a reaction to the weather, meaning the lack of blizzards in the months ahead should make everything alright again.
Then, ABC News reported that its Consumer Comfort Index plunged to the minus-50 mark and now hovers just four points from its record low.
The Conference Board survey is particularly interesting because it's broken up into two components.
The "Present Situation Index" -- meaning, how's your life today? -- dropped nearly six points to 19.4. But the "Expectations Index" of how those surveyed believe the economy will be six months from now declined a whopping 13.5 points.
Holy crisis!
Even with the stock market still bubbling and media trying its damnedest to convince us at least a million times a day that there's an economic recovery, the American public isn't buying it.
Worse, we've become a clinically depressed nation that doesn't think the situation will ever get better.
OK, so what's really going on?
Well, this is what you get when the government lies to people and when those in elected office believe their own fibs.
At this point in my rant I have to go back over a lot of things I've already written about -- like government reports on economic growth that mislead, and employment surveys from Washington that fudge the truth and inflation claims that insult the intelligence of even the most dim-witted among us.
But the public's bad mood also has to do with expectations. Promise people improvement and they expect you to deliver. Deliver too little and they are going to be angry.
Has the economic situation improved over the past year? Sure.
In late 2008, politicians of both parties with their eyes on winning (or in the case of the Republicans, keeping) the White House managed to bring the nation's banking system to the brink of failure. That'll happen when you utter the words 'brink of failure' enough.
It is one of those statements that's self-fulfilling.
The economy has stabilized since then, helped greatly by the fact that some wealthy people feel wealthier because of an unbelievable snap back by the stock market during 2009. (And by unbelievable in this context I mean that what happened shouldn't be believed as either legitimate or sustainable.)
But the economic data that is being cheered hasn't really been that great.
For instance, as I've said before, the growth in the nation's gross domestic product in the fourth quarter, which was widely described as impressive, really wasn't. Most of the 5.9 percent an nualized gain came from a re building of inventories by companies and a make-be lieve drop in inflation.
It's been estimated that just 1.7 percent of the increase came from consumer spending, the biggest factor in the economy. Most of the rest of what was manufactured is sitting in warehouses.
And if you understand what the word annualized means in this context, there's less to cheer about.
When you divide that annualized 1.7 percent consumer spending into the four quarters of the year, you see there was only slightly more than an 0.4 percent expansion in the final four months of 2009.
So, Americans aren't happy. What a surprise!
john.crudele@nypost.com
http://www.nypost.com/p/news/busines...KbNlGuorM8tN3M
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