Another Day, Another MSM Story Running Down the Economy

You would think, after months of running around and screaming about how our economy is crashing worse than Buster during an episode of Mythbusters, that the MSM would get tired. I know that I am. Yet even on Christmas Day, a day of hope and joy, the MSM is doing its best to club our economy insensate.

First comes the good news.

Consumers increased their spending last month for the first time since spring, as falling gas prices helped boost their purchasing power, new data showed yesterday.

On an inflation-adjusted basis, consumers spent 0.6 percent more in November than they did the month before, the Commerce Department reported, the first increase since May. Disposable income also rose on an inflation-adjusted basis, by 1 percent, compared with an increase of 0.7 percent in October.

Paychecks bigger, spending up, energy prices way, way down. That’s a hopeful sign, right? No, no. Don’t be silly. We’re all doomed. Ask these professional rainclouds.

But even as consumers returned to stores and shopping malls, analysts cautioned that the data did not signal the start of a turnaround for the economy. Because energy prices are unlikely to sink at the same clip they have over the past few months, Americans won’t be able to pocket much more savings at the pump.

“Much of the declines are behind us and won’t be a significant event as we go into 2009,” said Sung Won Sohn, an economist at California State University, Channel Islands

And why is that, exactly? Mr. Sohn doesn’t exactly say (and who knew that the Channel Islands even had a a school with an Economics Department worth quoting in a major newspaper? Is that because the Washington Post couldn’t find anyone closer willing to stomp a mudhole in our slightly rising spirits?).

Oh, but that’s not the only pessimist the WaPo could find.

Excluding defense-related spending, new orders were down 0.9 percent. While that’s an improvement over October’s 8.4 decline, Wachovia economist Sam Bullard said it doesn’t make the overall picture any brighter.

“The fundamentals for the domestic and the international economy are still pretty dim,” Bullard said. “We’re seeing nothing in the economy right now that is going to change that trend.”

Many consumer share that pessimism and chose to save more last month. Personal savings as a percentage of disposable income rose to 2.8 percent, up from 2.4 percent in October. Analysts said that was understandable given the relentless stream of bad economic news, including mounting unemployment.

“People are nervous their job could be at risk,” said Ed Hyland, global investment strategist for J.P. Morgan Private Bank in New York.

Forgive me if I don’t exactly put a lot of trust in experts from Wachovia and J.P. Morgan, given their recent epic implosions. Perhaps we could get an economist from a successful company, one that didn’t blow up and gouge huge chunks of bailout cash from my paycheck?

And there’s something else there, too. I thought that saving was good. Aren’t we supposed to be saving, instead of putting ourselves further in debt? Okay, so we’re not dumping gobs and gobs of money into the economy but evidently we’re slowly spending more, and spending more wisely (seeking out better deals and making the stuff we buy go farther). In the end, that’s a good thing for our economy because it forces more competition so that weak and/or foolish companies like Wachovia and J.P. Morgan fall by the wayside while healthy and/or wise companies get room to expand and hire more people. And while we’re slowly increasing our spending, we’re putting more money away, improving our personal financial situations (which means fewer bankruptcies, foreclosures, and poverty in the future). That doesn’t strike me as bad news.

Here’s the thing. One of the biggest chunks of “energy” that helps keep a economy healthy and growing is consumer confidence. That’s the very thing that’s taken the biggest hit thanks largely to overly-pessimistic reporting by the MSM. Yes, our economy has been slowing down. Yes, we’ve been walking the ragged edge of a real recession. Yes, companies are slimming down. But we’re not nearly in dire straits yet – not even close. Our unemployment is still in single digits, far lower than it was during the late 70s and early 80s and way lower than it’s been for years in places like France and Germany. Real earnings have been moving mostly upwards for nigh on a decade. For the second year running, the United States has been named the most competitive economy in the world by the World Economic Forum in Davos. There are plenty of reasons to believe that we’re ready to start moving upwards again.

That’s only going to happen if we believe that it can happen and, in some ways, is happening. We can not succumb to MSM fatalism. We have to remain confident that we can move our economy upwards faster than it’s moving now. We can do this. We just have to ignore the MSM.

Then again, I don’t work for the MSM.

Tags: Christmas, Economics, Media Bias, Shopping, Washington Post