Saturday, January 31, 2009

Talking down the economy

In his weekly radio address, Pres. Obama said:
Already the slowdown has cost us tens of thousands of jobs in January alone. And the picture is likely to get worse before it gets better. .... Americans know that our economic recovery will take years -- not months. .... Rarely in history has our country faced economic problems as devastating as this crisis.
After the dot-com crash, while Clinton was still in office, the press objected to president-elect Bush's discussion of his plans to repair the economy because to discuss them required mentioning that the economy was contracting. As James Agresti recalls:
Making the case that Bush�s �talk� was damaging the economy, an article in The Washington Post flatly stated that economic indicators �deteriorated considerably� following �a drumbeat of ominous forecasts by the Bush administration.� In fact, it was later found that GDP growth had sunk into negative territory several months before Bush took office.[10] Another article in the Post quoted an economist who asserted, �What happened is that a few politicians opened their mouths and started to use the R-word [recession]. And then newspapers started to run big headlines about layoffs.�

In a house editorial, The New York Times lectured �it is important� that President Bush �quit talking down the economy�.� Likewise, a column in the Times took Bush to task for not being a �cheerleader� for the nation�s economy.

An article in Time magazine critiqued President Bush and the media for being pessimistic about the economy and pointedly declared, �The worry factor is not to be underplayed. Recessions and bear markets are as much about psychology as fundamentals�.�

Of course, that was then. This is now.

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