The reason for the gloom

I received James Pethokoukis' latest piece for U.S.News in my email today. Here is a portion:

You know there is something weird happening on Wall Street when you start receiving economic reports in your E-mail inbox titled "Angst isst seele auf (Fear eats the soul)," as I did recently from Bruce Kasman of JPMorgan Chase. If that's the attitude among the pros, no wonder the market has been selling off lately.

But it's Main Street, too, that has the willies. The great economic conundrum of the past few years has been the strange inability of so many Americans to notice and fully comprehend the indisputable fact that over the past five years, the economy has been expanding (up 15 percent), stock market rising (up 53 percent), real incomes rising (up 16 percent), and unemployment falling (to 4.7 percent from 5.7 percent, with 8 million new jobs). (Thanks to Ed Yardeni of Oak Associates for crunching the data.) As CNBC's Larry Kudlow loves to say, this economy is the "greatest story never told."

But the "greatest story never told" is a mere tale of fantasy to others. "Behind the statistics, there are real families and real lives and real pain," says Republican presidential candidate Mike Huckabee. It's time to "rebuild the middle class," says Democratic presidential candidate Hillary Clinton. "Our country's middle class is not just collateral damage in what has become all-out class warfare," says possible independent presidential candidate—and current CNN news personality—Lou Dobbs.

And to be sure, a good chunk of the American public would agree with those gloomy assessments. According to a USA Today-Gallup Poll taken last month, more than one third of Americans surveyed say the economy is in recession, while some 40 percent say a recession is likely next year. Overall, 72 percent of those surveyed say they are dissatisfied with how things are going, the worst numbers since 1992.

Now the economy may indeed slip into a recession in 2008 because of the mortgage mess and credit crunch, but the past two quarters have been quite strong, with economic growth right around 4 percent and unemployment below 5 percent. So why are so many people already so glum? There are many possible reasons:

1) The hard, costly struggle in the nation-building phase of the ongoing Iraq war.

2) The housing downturn, which may be causing people to feel poorer and to worry that the real-estate recession could turn into a much wider problem.

3) A psychological phenomenon called "aversion to loss" where people feel losses (in, say, real estate) more strongly than gains (in, say, the stock market).

4) Rising gas prices, an easy-to-grasp touchpoint with the broader economy in a way gross domestic product stats are not.

5) An in-your-face, materialistic society that displays the opulent wealth of the super-rich Hollywood-Davos elite as well as those average folks lucky enough to get "extreme makeovers" to their homes.

6) A news industry—itself fearful of changes in its own business—that has overhyped the dangers of outsourcing, aided and abetted by politicians doing the same to win votes.

Mr. Pethokoukis' six reasons are good, but I believe the real answer is something else. I think the real answer was hit on by The Anchoress:

I must ask, if the President of the United States had had a D after his name when he deposed Saddam Hussein and liberated a few million people and tried to establish a Democracy in the midsts of tyranny and tribal skirmishes - and if it looked like he was, after a very difficult time and some serious missteps - succeeding, do you really think you wouldn’t be hearing about it?

Come on - the last president who had a “D” after his name saw the 5.6% unemployment rates trumpeted as “essentially full employment” with no “ifs, ands or buts” about it. Every day was a rainbow day when the last “D” President was in office, and most of the news was good news. If the stock market went up - you heard about it. If it went down, that was just a correction and some profit-taking; no big whoop. And even if American interests and vessels were being blown up here, or overseas, there was no terrorism. The only real terrorist was the homegrown one, and I think he was the only one put to death for it, too, if I recall. When the American president had a D after his name, the troops that were deployed were never in harm’s way, and they were all going to be “home by Christmas.”

If the American President had a D after his name, do you think you would have to be your own news service in order to get some relief from the unendingly bleak-everything-everywhere-is-bad-and-the-world-will-continue-to-spin-into darkness and all-nations-will-continue to-hate the USA until-W-is-out-of-office and -our-guy-presumably-Hillary is-in-the- White House?

It’s going to take getting another D into the White House for good news to be allowed out to play in the American psyche, again. It may well take getting another D into the White House for our troops to be able to rely upon their funding, for their heroism to be noted and applauded with appropriate fanfare.

Voters are going to have to decide whether it’s worth it to put Hillary Clinton and her husband back into the White House just to be able to hear a little good news and to feel the multi-layered, seven-year gloom, lift. I suspect that for many Americans who just want to hear that “everything is okay again today” - people like some of my elderly family members, and some of the younger ones, too - if that’s what it takes to be allowed to smile again, or to be allowed to feel good about America, once more - they’ll go for it.

Will anyone notice that we’ve completely lost a free and independent press in the bargain? Perhaps concerns for the health and welfare of our vital free press should trump ideologies.

She is correct. The mainstream media have become partisan players in the political game. They are working to achieve political victory for the Democrat Party in general and Mrs. Bill Clinton in particular and they will cherry-pick the news they report and slant the reporting of that news to that end.

Most people like Anchoress' elderly relatives will not believe this, only because they do not want to believe it, but it is true. The only difference between the New York Times and the Washington Post and Komsomolskaya Pravda and Völkischer Beobachter is one of degree.

Hat Tip to Born Again Redneck for the link to the Anchoress.