Friday, April 30, 2010

Simplistic recovery: just talk it up

It was the kind of exchange on the economy that was dumb on the face of it. And coming in a TV exchange among journalist, I cringed:

"... but let's not forget, the President is our leader and the consumer looks to our leader for some kind of indication that things are getting better. If he were to just take a more positive tone and really stress the optimism there with this GDP report, might that not sort of become somewhat of a self-fulfilling prophesy where people feel better and therefore spend more, and the economy moves forward more quickly?"

Argh! I wanted to lunge at the television after hearing it. (You can listen for yourself, at about 11:17.)


 
 So all President Barack Obama has to do is talk up the economy and it will take off? Yeah, sure.

The occasion was Obama's response to the report today from the Commerce Department that the U.S. economy grew in the first quarter at an annual rate of 3.2 percent, better than what was seen during the depths of the Great Recession but still just so-so.

"Our economy as a whole is in a much better place than it was one year ago," Obama told reporters in a statement and photo-op outside the White House. But he also acknowledged that while a positive number for the gross domestic product is good, "it doesn't mean much to an American who has lost his or her job and can't find another."

For the unemployed -- now totaling 15 million, with a record 6.5 million out of work for six months or more -- " 'You're hired' is the only economic news they're waiting to hear," Obama said.

I'm in that latter group -- long-term unemployed (nearly 10 months) and doing my best to hear "you're hired" -- so I'm neither willing nor able to boost my consumer spending, whether Obama flogs the GDP numbers or not.

So the anchor-reporter exchange on "The Call," the mid-morning CNBC business show, struck me as ludicrous -- as it also seemed to the reporter on the segment, chief Washington correspondent John Harwood.

"I doubt it personally, Trish," he responded to Trish Regan's comment that the president can influence the economy by being more upbeat. (Regan anchors the hour-long show with Larry Kudlow, who, by the way, suggested after the Obama statement that the president sounded "downbeat.")

Continued Harwood, "I'm not sure a president's words can talk up or talk down the economy. We do see the consumer coming back [the Commerce Department report also highlighted an improvement in so-called personal consumption expenditures] -- that is something that is helping this recovery."

But with unemployment still near 10 percent, he said, Obama will walk a fine line in taking credit for programs that are aiding the recovery without seeming to convey the message "mission accomplished."

Give Obama points for offering some empathy to those of us who are still unemployed; happy talk on the economy provides no comfort.

And send Regan back to school for an economics refresher course.

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