The American Press Numbs The Mind...

This amazed me. How can these poll statistics be true?

Thirty-six percent (36%) of Americans say the U.S. economy is in a recession. Forty-one percent (41%) disagree and say it is not.

36% of the people believe that the US is in a recession? That implies that there are job losses, GDP has fallen for 2 consecutive quarters and the stock market must be falling fairly dramatically.

Just for a little real information... Today, the S&P 500 stock index hit a 4.5 year high. GDP growth has come in +3.8%, +3.3%, +3.8%, for the first 3 quarters of this year, not too bad given that the long-term potential for the US economy to grow is around 3.0%. There have been 1.6 million jobs added to the US economy since 1/1/2005 or an average of 160,000 per month. Not the kinds of numbers that imply a recession.

The press coverage of the positive movements of the US economy have been poor at times and downright misleading at other times. As Larry Kudlow recounts earlier this year...

It's not even remotely as important as the Iraqi election, but the New York Times' impoverished coverage of the latest reading on U.S. gross domestic product deserves a mention. Both the headline and the thrust of the story by Times writer Louis Uchitelle suggest a big slowdown in economic growth. While this is statistically correct, it is analytically wrong. The main thought behind the story - that the economy has registered its weakest quarterly pace in nearly two years, held down by a surge in imports - is completely misleading.

Underneath the headline number of 3.1 percent real GDP growth was a huge 5.5 percent increase in private-sector output (less government spending and trade). Private consumption and business investment comprises 80 percent of GDP - a factoid the Times never relates. In fact, the tell-tale number in this latest GDP report is the outsized 15 percent gain in business investment - the single most important swing factor in economic activity.

Within this number, equipment and software investment jumped 13 percent. This is what Wall Street calls "cap ex"; it expands the entire economic infrastructure. Behind this investment explosion is the 20 percent rise in 2004 corporate profits. Business earnings allow firms to expand and grow the economy and jobs, too. When profits rise, the economy expands. When profits fall, the economy contracts.

It has become very difficult to trust the New York Times reporting over the past few years since their reporting is laden with anti-Bush and anti-Republican agenda. But this mushy reporting of fact is not just limited to the Times, it is a much deeper media malaise maybe revolving around the poor economics facing the print and traditional TV news media organizations that have lost so many customers to non-traditional online alternative news sources- more intune with the attitudes of mainstream Americans.

The only explanation that I have for the poor polling is that the press is painting such a bleak picture of the American economy that people's minds have gone soft. Their spending habits and national statistics do not bear out the gloom felt by average Americans on the US economy.