Remember That Gas Post? Vindicated.

This gas post from just a few days ago? Well read this:

Just last winter, gas at $4 a gallon was said to represent a super-ultra emergency, and ExxonMobil profits were said to be obscene. Now gas is $2 a gallon and this is bad, according to CNBC economics bobbleheads, who last week warned the lower pump price will depress oil-company profits. Just last winter, rising consumer prices were said to represent a super-ultra emergency — now that consumer prices are falling, that’s supposed to be bad too, owing to the possibility of deflation. But innovation and rising labor productivity are supposed to drive down prices. Lower prices are a core goal of capitalist economics!

These points should serve as reminders that the mainstream media always present all economic news as bad. Higher interest rates? Bad for borrowers. Lower interest rates? Might cause inflation. Normally, the media’s penchant for spinning all economic news as bad doesn’t matter — but right now it does, as pessimism more than logic seems to be driving the weak economy. Speaking as someone who pulled the election lever for Barack Obama (and whose daughter worked for the Obama campaign round the clock for months), I agree with John McCain’s statement, “The fundamentals of the economy are strong.” They are. McCain was right! Innovation is high. Labor productivity is high. There are no shortages of any resource or commodity. Pessimism is driving the downturn, and that pessimism is advanced by relentless media negativism

Greg Easterbrook here, via Alan Jacobs

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6 comments so far

  1. R.H. on

    And we’re taking our economic cues from the author of the author ESPN’s “Tuesday Morning Quarterback” because…?

  2. jeffreimer on

    Because it’s a few witty turns of phrase and a fresh perspective. The fact that somebody writes something on ESPN.com shouldn’t exempt it from participation in public discourse, should it?

  3. R.H. on

    No. But whether or not a sports writer has the final say on economic matters is another!

  4. jeffreimer on

    True, true. But I’ll take what I can get!

  5. R.H. on

    For your consideration: a few more witty turns of phrase.

  6. jeffreimer on

    There’s nothing in this article I really disagree with, but it only really reinforces what I said originally. For instance:

    “But not everything about a low oil price is a cause for cheer—nor is the dramatic volatility in the price a boon for consumers or producers. Most worrying is that the rapid recent decline is a symptom of a sharply worsening world economy: demand is dropping as economic activity stagnates, or slows, everywhere.”

    What does The Economist know? I’m sticking with Tuesday Morning Quarterback.


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