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Tuesday, April 06, 2004

Economists are still not getting the job done...

In our ivory tower, my colleagues and I often lament the fact that it seems that the majority of our students (and colleagues in other areas) are woefully ignorant of simple economic definitions. This is from the Editorial page of yeserday's Wall Street Journal:
Instead, the media have done a terrific job of convincing everybody that these are the worst of times. A poll conducted by the American Research Group in mid-March found that 44% of Americans believed that the country was still in a recession. That's passing strange when you consider that the last recession ended way back in November of 2001, and for the last two quarters of 2003 the U.S. economy grew at an annualized rate of 6.1%, the fastest in 20 years. Even more remarkable, the percentage of gloomsters was higher in March, when we now know 308,000 new jobs were being created, than over the previous three months.
That leaves the inescapable conclusion that the problem is perception. This pessimism is understandably fed by Democrats who want to retake the White House. But it's also flogged by a media that can't seem to admit that the real news of the past three years is how well the U.S. economy has weathered the shocks of a huge stock-market blowoff, September 11, business scandals and the long prelude to war in Iraq.

Contrast this to 2000, when nearly all economic coverage portrayed only sunshine even though the stock market plunge had begun in April of that year. The National Bureau of Economic Research now fixes the onset of recession at March 2001, meaning that the economy was heading down long before the Bush Administration took office.

Amen, brothers. Economists are not even successful in spreading the definition of a recession and we wonder why it is that no one listens to us.

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