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Thursday, June 28, 2007
Steve Chapman :: Townhall.com Columnist
Good Times, Bad Mood
by Steve Chapman
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Poll
Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


Americans have many reasons for gloom. The war in Iraq has yet to turn around, we can't agree on a solution for illegal immigration, and Lindsay Lohan isn't cute anymore. We also have one reason to be happy: the economy. But right now, we're in the middle of a good funk, and we don't want to let any sunshine spoil it.

When it comes to the economy, the national mood is a combination of dissatisfaction and fear. A recent Gallup poll found that 66 percent of Americans think national economic conditions are "only fair" or "poor." And we remember the old proverb: It's always darkest just before it goes totally black. Fully 70 percent think the economy is getting worse, compared with 23 percent who discern signs of improvement.

In the midst of a recession, a depression or the Irish potato famine, our morose outlook would make sense. But at the moment, it seems to have no basis in reality.

Unemployment stands at 4.5 percent, down from the peak rate of 6.3 percent four years ago. The stock market is near record levels. Economic growth, which slowed in the first quarter, has since rebounded. Inflation is running below 3 percent. But to paraphrase the old country song, we've enjoyed as much of this as we can stand.

It's true that not all the economic news is golden. Some people are out of work or drowning in debt. Gas prices are painfully high. People who expected their home values to keep climbing, no matter what, are learning the definition of the term "bubble." Health care and college costs, however, seem permanently immune to the law of gravity.

But even in the best of times, some trends fall below average. Taken as a whole, the economy is plenty healthy. So why do we insist on seeing it as sickly?

One reason is that we've gotten so accustomed to prosperity that we take it for granted. From 1971 through 1997, the unemployment rate never once fell to the level we now enjoy. In the 1970s, annual inflation was frequently in double-digits. Recessions used to come along every four or five years, but since 1991, we've had only one downturn, a mild one back in 2001. Continued...

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Steve Chapman is a columnist and editorial writer for the Chicago Tribune.
 
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to F1etch
Thanks for the brilliant assessment. I appreciate the way you present facts. It's obvious you speak from experience not emotions.

SteveL is wrong again
"The general public knows their household budget, their job prospects, and their personal economic futures."

True. But that was not the question asked. If you understand anything about surveys (and I used to do them a couple decades ago), the answer depends upon the question and how it is asked and the response to a question about how the overall economy is doing isflatly NOT based primarily on ones personal circumstances but upon what they hear from a wide variety of sources.

"You proved my point with your partisan dismissal (and no evidence)."

This is called a lie. Economists have understood for decades that governmental policies typically take about 6 years to fully take effect. That unemployment peaks 18 months or more after an economic turnaround is a fact. That the economy was growing strongly before Clinton took office is a fact. That growth slowed in the wake of the tax hike is a fact. That the economy was heading toward recession (so sayeth all the economic indicators) long before Clinton's term came to an end is a fact. That teh stock market was weak and falling for more than a year before his term came to an end is a fact. And that taxation rates in excess of 20% of GDP are a huge drag on the economy (and this and deflationary Fed policy wre the cause of the last recession) is a fact.

Just because you don't like them doesn't make them any less factual.

"Now when things are good on some President's watch, his opponents (like you) attribute it to luck or to the actions of his predecessors that he just took advantage of. That's the same way that Democrats give Reagan no credit for winning the Cold War--they say it would have happened anyway and all previous U.S. presidents had to be credited, or maybe it was Gorbachev who should get the credit."

No. It is those who lack the basic economic understanding that attribute economic conditions to whoever happens to be in office at the time. Credit/blame should be assessed based upon actual performance. One's actions and their impact on the economy are what matter and the economic data yield no other conclusion than the one i provided.

And the Soviet Union WOULD have collapsed anyway. Reagan deserves credit for facilitating its demise decades earlier than might otherwise have happened.

"But we've had numerous examples of Presidents who came into office and screwed up the legacy their predecessors had left them: Lyndon Johnson with the Vietnam War, Carter with his economic policies, Bush 41 with his tax increase. And in all three cases, the voters denied them re-election."

Bush 41's tax increase was an all around BAD idea but not the direct cause of "screwing up" the economy. The tax hike slowed economic growth, undermined the Reagan tax cut policies somewhat - though not competely which is why the recession was so mild - and made the economy that much more vulnerable to the economic shock of the invasion of Kuwait.

"Clinton did a good enough job to convince the public to give him a second term."

True enough. But the whole poibnt is the disconnect between polls, public perception ... and reality. The notion that, from any practical standpoint, he "built on the legacy he inherited" is nonsensical. That his irresponsible economic actions didn't result in economic catastrophe until the year he left office didn't make them any less irresponsible or less a major cause in the recession that marked the end of his presidency.

For some bizaare reason, I am of the opinion that it makes more sense to judge the state and direction of the country at the end of a president's term - after he's actually done something - than at the beginning. A better question would be "Are your prospects better now (in 2000) than they were eight years ago?" He deserves full "credit" for that since the answer must be "absolutely not".

Again, (and liberals get this wrong all the time) FEELINGS DO NOT TRUMP FACTS. The issue, again, is not the results of polling, it is whether or not the objectively determined economic conditions are in conflict with those polling results. Polls are good at assessing feelings. They are completely useless as a tool for assessing economic conditions.
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