August 18, 2005

OF TWO MINDS ABOUT THE ECONOMY: A reader notes this amusing juxtaposition in the New York Times. From the Editorial Page:

But the overarching explanation [for public concern about the economy] is that people are feeling insecure because they understand that today’s economy is built on shaky fundamentals. Average Americans may not sit around fretting about America’s outsized budget and trade deficits, and its unprecedented foreign indebtedness. But many of them — as buyers, borrowers and employees — are concerned about the increasingly bubbly housing sector. The economy’s shortcomings are nowhere more obvious than in the job market… job growth is still substantially slower than in previous recoveries. Wages for 80 percent of the work force are barely keeping pace with inflation… Because Mr. Bush fails to acknowledge the lackluster job and wage growth, he fails to respond appropriately. The administration’s insistence that the economy is getting better all the time… only intensifies the anxiety that people feel.

From a news account, the same day:

Emboldened by rising wages and better job prospects, American consumers headed to car dealers by the thousands last month to take advantage of Detroit’s deep discounts, and helped empty bulging warehouses. A series of economic reports released yesterday showed rising retail sales, lower initial unemployment claims and continuing low inventory levels. Economists say the three reports confirm what many of them have been saying: the economic expansion is picking up its pace… The economy has added 190,000 jobs a month on average so far this year, up from 180,000 jobs a month last year. The unemployment rate was at 5 percent in June and July.

Yeah, when you fail to acknowledge the real state of the economy, it can hurt your credibility . . . .

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