One of the web sites where the clueless gather is called newsbusters. Here, they congregate and complain about the biases of the liberal media in the Rush Limbaugh style of analysis, possibly more advanced than Rush. The following linked column, written by Noel Sheppard who is an associate editor of Newsbusters, is actually one of the best that I have read at that site in the sense that it actually did not cause me to start laughing at once. GDP Better Than Expected: Have Media Overhyped Depression Talk? | NewsBusters.org
Sheppard's analysis is of course superficial, just not as patently superficial as most that I have read at that site. He suggests that the talk of gloom and doom in the media after the release of the recent GDP report is a conspiracy of the "liberal" Obama loving media designed by the nefarious liberals to serve a dual purpose: to defeat his beloved Sarah and her running mate (who was that exactly?) and then to pass the pork infested stimulus bill. Since this gentleman is apparently acquainted with a few facts, let's just look for a second at the facts that he omitted from his narrative when discussing the media's bias that were easily discovered in the "mainstream" media so he had to know them:
(1) he does not mention that the fall in GDP was tempered by an unexpected rise in inventories which added 1.3% to the headline number. Interestingly, most media outlets mentioned this fact conveniently left out of the article complaining about news media bias. The unwanted build-up in inventories is not a positive for the economy but indicates manufacturing activity will have to slow down, more jobs will be lost, as companies adjust supply and demand. Excluding inventories, real final sales fell 5.1%.
(2) Nominal GDP fell at the highest rate in 1/2 a century. While the real GDP was the weakest since 1982, the nominal GDP number was the weakest since 1958. That figure would have been even worse without spending by the federal government which increased spending by 1.9%. Private sales fell 6.5%.
(3) Real business spending fell 19.1% and residential investment fell 23.6% according to John Ryding at RDQ Economics. Consumer spending on durable goods fell at a 22% annualized clip in the 4th quarter with the last four quarters falling at the fastest rate since 1951.
(4) For anyone paying attention, this is the kicker. The worst part of the slide in economic activity began in the second half of the 4th quarter and has accelerated into the current quarter. It was not even a full quarter of steep declines. This is apparent to anyone who actually reads the news and earnings releases from American corporations, as opposed to some one who filters the news to confirm his previously held beliefs. Maybe Mr. Sheppard needs to read one of Taleb's books about the dangers associated with just seeking confirmation.
My conclusion is that the financial media has not revealed any bias on this issue but Mr. Sheppard is wearing his on his sleeve.
Some of my references for the above comments include all of my posts discussing earnings reports and these articles:
I do not criticize anyone for voicing an opinion that I happen to disagree with unless the opinion is based on an ideology that screens information to confirm pre-existing beliefs and ignores available and reliable information inconsistent with the opinion. Personally, I am hopeful and optimistic about the future of America. But, I am not blind to the seriousness of the current predicaments that we face and the need for unprecedented actions. I certainly can not afford to discard information inconsistent with ideological preferences and to seek out only information that confirms a previously formed opinion. If anything, contrary to Noel Sheppard's line of reasoning, the mainstream media has underestimated the severity of the current economic crisis.
I mentioned in a previous post that I have no background in science and medicine. While that is true, it probably understates the full scope of my ignorance on the subject. In fact, I choose to go to Tulane University in 1969 because they allowed me to substitute a course in philosophy for calculus and to avoid any contact with chemistry and physics. This is not to say that Harvard was beating on my door in 1969 but I did have other alternatives. (besides it would be an oxymoron to call a graduate of Tulane an elitist, DAMNATION BY ZIP CODE? THE PALIN DOCTRINE Wingnuts Out In Force) I did subsequently graduate with virtually no contact with the sciences or math other than a course in biology which terminated early due to events in the spring of 1970. I did graduate with more than 160 semester hours including enough graduate level courses for a masters in history, with three majors which pretty much tells anyone where my head is at: philosophy, political science and history. Yes, B.S. can be an art form and a real professional at B.S. can spot it easily. I am a professional at something, not medicine, and I do have to fork over $400 every year as a "privilege" tax on a license issued by the State of Tennessee. I really do not want it however.
Ford Motor posted a 42.1% drop in sales in January. Ford posts 42.1% drop in January U.S. sales - MarketWatch
GM January sales fell close to 50%. GM U.S. sales fall 48.9% to 128,198 units in January - MarketWatch
The Commerce Department reported that the number of vacant and for-sale homes (i.e. foreclosed) was up to 2.9% in the 4th quarter. Index Shows a Rise in Pending Home Sales - NYTimes.com A record 19 million homes stood vacant by the end of 2008. Bloomberg.com: Worldwide This data is gathered by the Census Bureau. Housing Vacancies and Homeownership - Fourth Quarter 2008
In case some have not yet noticed, the stock market had one of its worse years on record in 2008. The Stock Slump of 2008: Wrecking Ball to Wealth - washingtonpost.com Seven trillion dollars went poof. Add to that number the decline in value of other assets owned by individuals like their home.
The WSJ editorial page writers are some in mainstream media that will never engage in introspection about the results of their theology and it is properly called a theology. They are still fervent believers in no regulations to hamstring the titans of finance and the magic elixir of tax cuts. It is just better to ignore recent history sometimes rather than to admit error.
I am glad that Tom Daschle withdrew his name. Tom Daschle withdraws HHS secretary nomination - MarketWatch I have a lot of trouble believing his explanation for not reporting income or paying taxes on income received. The car and driver were obviously income. I would have voted against both him and Geithner.