Monday, September 15, 2008

Everything's Coming Up Roses


What is it with Bush's economic advisors, anyway? First Phil Gramm, now this:
Things today just aren't that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression - or exaggerated Depression comparisons.
No, they're not that bad... if you're wealthy. It's just not so great for everybody else. If you live in Michigan, where "recession" is a multi-year reality, it's hard to see any bright lights at the end of the tunnel.

It's a lot easier to wave around red herrings, such as, "It's a wild overstatement to compare our current situation to a depression", than it is to address the financial difficulties our nation faces. Difficulties compounded by the vast amounts borrowed and spent on the Iraq War. You can view that war as an absolute necessity or an utter frivolity, but there can be little mistake as to the effect of its trillion dollar price tag on our nation's budget. Further, not all comparisons to the Great Depression are overblown - they may not indicate that we have another depression on our horizon, but they highlight how serious our post-Bush financial predicament has become.

Luskin attempts to reassure us,
Moreover, MBA data show that today's foreclosures are concentrated in that small fraction of U.S. homes financed by subprime mortgages. Such homes make up only 12 percent of all mortgages, yet account for 52 percent of foreclosures. This suggests that today's mortgage difficulties are probably a side effect of the otherwise happy fact that, over the past several years, millions of Americans of modest means have come to own their own homes for the first time.
Well then, somebody had better clue my bank in, because they seem to think my neighborhood is at risk.

As for savings, Luskin tries to pull a fast one - take a quote from Obama that relates to recent financial data and pretend it's about the latest figures - figures for one quarter that post-date Obama's statement and are likely anomalous
Let's hope, despite the dearth of evidence, that the most recent figures do represent a turnaround. Luskin, unfortunately, presents no evidence of that, but otherwise the trend appears to be as Obama described - and it's ugly. But it does not appear that Luskin's trying to be honest here - he appears to be trying to distract us from the trends by comparing one of the best savings rates for a single quarter under Bush to one of the worst under Clinton.
And to be fair, [McCain] isn't immune to the Depression-exaggeration virus, either. At a campaign news conference in July, my fellow adviser Steve Forbes warned that Obama was seeking "the biggest tax increase since Herbert Hoover and the Great Depression." Factual? Almost certainly not.
Almost? Wouldn't "big fat lie" be more accurate?
But at least Forbes wasn't dissing the economy -- he was dissing Obama.
Ah. So it's okay to tell outright lies about a candidate, as long as you don't state what appears to be the truth about the economy in an unflattering light.

Luskin can't help himself from defending Phil Gramm:
McCain campaign adviser and former U.S. senator Phil Gramm was right in July when he said that our current state "is a mental recession." Maybe he was out of line when he added that the United States has become "a nation of whiners." But when it comes to the economy, we have surely become a nation of exaggerators.
Does Luskin have a mirror handy? Because from where I'm sitting Luskin is either exaggerating himself, or is wearing rose-colored glasses.

1 comment:

  1. Nice post and analysis. Reminds me of this song by the band, Mr. Egg.

    Coming Up Roses

    "Everything's coming up roses
    And our paper cup
    Is filled half up"

    ReplyDelete