Economics Reporting Is The Stuff Of Fables
Many information outlets today are reporting supposedly/hypothetically bad economic news this morning. Oh, woe is me! In particular, I would like to take a quick glimpse at an article from the Los Angeles Times. It so succinctly exhibits the subtly obvious lies that makes economics reporting the stuff of fables.
They’re reporting the same numbers as the Times, Post, Penthouse and Glamour: GDP of 1.8% for the first and a spike in unemployment applications. Big whoop, these things happen. Dig into the piece, though, and a couple of very deceptive tidbits quickly emerge.
Referring to the (apparently) unsurprising GDP news, the L.A. Times had the audacity to print this blurb:
…much of it was due to temporary factors such as higher fuel costs…
Phew, I thought it was a real problem. Fortunately I just have to wait until those temporary higher fuel costs drop.
What? Fuel prices never drop? Poppycock! Marketwatch reminds us that as recently as 2008, crude oil prices were as high as $147 a barrel. So in theory, gas prices could drop. Take note, when crude oil was $147, the price for a gallon of gas was $4.11. At a higher cost, gas prices were the same as they were now. What I’m trying to say is, if gas prices aren’t in line with crude prices (as the 2008 costs indicate), we could be in for a shit storm. Those temporary fuel costs might be here temporarily after their temporary nature. They’re here to stay, folks.
But fret not! That’s good news. High fuel prices are temporary. One day, soon, things will be like they were in the Golden Days aka 1986. The L.A. Times once again swoops in as Captain Save-A-Ho, showing how we’re rebounding. From the same article:
Even with the slower pace of growth, the nation’s output in the first quarter, annualized, exceeded $15 trillion for the first time, as measured in current dollars. By this measure, the U.S. recovered from the recent deep recession in the spring of last year.
By this measure? Fables. Myths. Tall tales. All are fiction. As is the passage above. Putting it simply, if $15 trillion can’t buy you a loaf of bread, what’s it really worth? The general premise is, if a dollar in 2011 is worth $0.45 in 1986, we’re moving backwards.
Take a minute and watch some old episodes of The Twilight Zone. Really, it can be any show dating back fifty years. Penny arcade machines and filling up your gas tank for $2 seems almost surreal, but when Federal Reserve Notes had more valuable, you didn’t need $15 trillion floating through markets to cast the illusion of commerce and business. Well, unless you’re in downtown Harare.
I’m not all that sure why I’m specifically picking on this one Los Angeles Times article. You could pick almost any article off any reputable website and poke holes in the veracity of the information. This piece in particular just got my goat, lobbing shrewdly worded lies as news.
Higher fuel costs are not temporary. The U.S. economy moving $15 trillion around is not a positive thing. If anything, that sort of monetary movement is slowly whittling away the value of your savings account. Good thing you’ve got no cash in the bank, right?