WASHINGTON -- An unlikely, man-bites-dog story recently appeared on the front page of one of our nation's most liberal newspapers, asserting that the U.S. economy is not as bad as people think.
The Washington Post, a left-leaning newspaper that persistently paints a gloomy picture of the country's economy, even before its descent into the subprime debacle, underwent a conversion of sorts last week. It decided to take a fresh look at the fundamentals of our economy and concluded that comparisons to past recessions and depressions were exaggerated, if not downright silly.
Readers of this column know that I have long railed against the gloom and doomers, while championing our economy's inexhaustible resilience, exuberance and competitive spirit, as well as its ability to recover against any and all challenges. That's why Washington Post reporter Neil Irwin's story last Wednesday came as a breath of fresh air. It's a gutsy, against-the-grain reexamination of the biggest election issue in the country that puts the numbers into a sharper and more honest context.
Under the headline, "Why We're Gloomier Than the Economy," Irwin ridicules the sky-is-falling view held by most Americans that the economy is "not just bad, it is run-for-the-hills terrible."
The polling numbers on consumer confidence are now the lowest in three decades. Gallup's surveys find that the number of Americans who think the economy is getting worse has risen to 87 percent. Liberal Democrats, Wall Street critics of the administration and economic bloggers on the Internet routinely make comparisons to that mammoth economic disaster of the 1930s, the Great Depression.
"But the reality is different. According to the most broad measures of how the economy is doing, it's not all that grim," Irwin states flatly. He's right. Yes, the economy is soft. Yes, the growth rate has slowed. Yes, the financial markets have been rattled by the housing and credit crunch, and the spike in oil and gas prices.
But with everything that has been thrown at it -- the subprime housing collapse, the subsequent credit crunch, skyrocketing oil prices and record fuel costs at the pump -- this economy is holding up much better than it has in previous recessions. Unemployment remains historically low by most measures (far below past recessions) and, all but overlooked by critics, the economy is still growing by nearly 1 percent in the first quarter. To make any serious comparisons with the Great Depression in the 1930s, when more than one-third of the workforce was unemployed and the economy was shrinking, is patently absurd.