I just had an interesting thought (to me anyway). I see a strong resemblance between some of the arguments on the economy and those on the issue of climate change. Consider this item from Huffington Post which quotes Austan Goolsbee saying that we have no economic crisis and one months' down data doesn't mean anything. Then think of the number of times climate change critics insist that the latest nasty weather event doesn't mean anything and there is no climate change (with which climate change proponents would agree). What is the parallel you ask? Well, each is rejecting the selected event (a monthly worsening in the labor statistics or a sudden severe weather incident) and then proceeding to use it to reject the broader trend. I could agree that each item by itself is no indicator of a trend. That would be like trying to describe a line by a single point--a meaningless exercise in futility. However, a large number of similar incidents (or points) starts to describe a meaningful trend (or line). I don't think there have been many years over the last twenty when I (and others) haven't commented on how very odd the weather was. Most of those twenty years recorded average temps among the highest in history as well as other weather anomalies. Twenty points are much better indicators of the direction of a line than one. The situation is a bit messier with the economy but there are interesting indicators. We have the second recession in a decade that has been described as 'jobless.' We have thirty years of statistics showing that wages have basically stagnated. We have thirty years of statistics showing the concentration of wealth in the top 10% and even more strikingly in the top 1%. The talking heads tell us that inflation is low or non-existent and we shake our heads and wonder who is doing their shopping. We have a bunch of Pollyannas telling us "don't worry and be happy" because this or that piddling little data point doesn't mean anything and that we don't have to do anything because there simply is no crisis out there. There is an old saying that describes a committee as the only living organism with six or more legs and no brain. That makes a society the largest committee around and ours is worst of all.
CNN just had a news flash that the Federal Government is going to withhold a subsidy from three banks, including Wells Fargo and JP Morgan, because of their poor performance in the mortgage modification program. That is nice--maybe even a good start. But the talking heads asked a question that I would like to know the answer to--how much of a hit is this really?
I think the kids had this one right and it is really too bad the parents had to get bent out of shape.