"Las Vegas Sands Says U.S. in a ‘Psychological Recession’."
Imagine that: Executives who make their living on Americans’ reliably reckless financial decisions are saying that people are too bummed out to gamble.
Had that been all, then nothing more would need to be said. Unfortunately, Mike kept going — and went far astray:
Easy as it is to ridicule these efforts at uncredentialed economic psychoanalysis, there is something to the point that the prevailing consumer mood seems a good deal more dour than the known and measured economic conditions would suggest. (emphasis added)
That’s a bit of a weasely hedge. Does Santoli recognize that these "measured economic conditions" are farcical?
The public certainly doesn’t buy into them. Mike mentions this in his very next paragraph, but somehow misses the significance of what he cites:
Consider that the University of Michigan’s consumer confidence gauge recently hit depths only registered before in 1980, at the time of double-digit interest rates and a triple-digit Dow. The NFIB’s Small Business Optimism measure has plunged well below any prior low in its 12-year history.
This is not a very complex conundrum. We have two data series, and they are in direct controversy with each other. You only need to select which one you believe is more accurately describing the economic environment: The official data, or the public.
No compromise: Its either one or the other.
If you believe that inflation has been (at least until recently) contained, and that unemployment has been modest, and that growth was robust, well then, you are in the same camp as Phil Gramm, Amity Shlaes, Gerry Bowyers, Larry Kudlow and the Las Vegas Sands. The stock market — still less than a year, and less than 20%, from all time highs — is in this camp also. All of you therefore believe that the economy is mostly fine, and the public are a bunch of whiny bitches.
Or, you might suspect that something fishy is going on. That the public simply does not get this negative for no damned good reason, that we do not see sentiment levels down to 28 years lows on a whim. That much of the recent economic progress has been illusory, dependent upon credit, easy money, and reckless risk taking. That the official data has been monkeyed around with enough over the past decades that it simply fails to do what it purports to do.
Which do you pick — the public or the official data?
Choose your sides . . . in this debate, there is no middle ground.
Whining US CEOs: Economy is "Dismal" (July 2008)
Who is Right: Professionals or the Populace ? (June 2008)
Amity Shlaes Does Not Know What a Recession Is (July 2008)
The Psychological Recession
Barron’s August 25, 2008