It took a bit of searching before I could find news about today's unemployment numbers that didn't list every problem or potential problem we've seen of late. The American press is hysterical, while reports from other countries are more rational. Once the American press smells blood in the water, they have a hard time acting responsibly, which is unfortunate since a large part of the American economy is consumer spending, and these reports have a negative psychological impact on that. If customer reaction is any indicator, people are scared out there.
Unemployment numbers are what worries me as an owner of a hobby store. As I've said before, people generally continue spending on their hobby, unless they no longer have an income. So with today's report, what's the new unemployment rate? 6.5%? 7%? Maybe it's at the current European rate of 7.5%. The recent job report listed lots of job losses, but unemployment remained at the same rate. No big deal, despite the pain for those who are unemployed. 6.1% is still below the dot-com bust of 2000. Even more encouraging, as my finance friend points out, unemployment is considered a lagging indicator, meaning it's a symptom of past problems rather than a prediction for the future. Retail sales estimates claim the holiday season should see a small amount of growth. We're expecting record sales.
The media are trying to invoke panic, and irresponsible legislators (and executives) are also promoting panic.
ReplyDeleteThe media are trying to sell air time.
The politicians are trying to scare the crap out of us so that they can pass a "rescue bill" with more pork in it than all the pig farms in the midwest.
Big business are for the panic because it allows them to either :
weasel out of taking responsibility for really stupid investment decisions
or
make acquisitions and mergers that would normally have to be scrutinized as they are creating a functional monopoly (oligopoly) in the banking world.
As for Bush, this is his greatest blunder to date. He remained calm, collected, and presidential after 9-11, but has fully bought into the fear-mongering and panic creation of the last few weeks.
Where is that FDR quote when you need it?
ReplyDelete"All we have to fear, is fear itself"