Democrat presidential hopeful Barack Obama figured right: Pennsylvania voters told pollsters covering the primary election that the most important issue to them is the economy. This helps explain Obama’s tactics of late. He has resorted to demagoguery, using scary economic predictions that bear no resemblance to reality to attract voters away from rival Hillary Clinton. He said recently that the economy is teetering on the brink of "something worse than a recession." Hmmm. Wonder what he's hinting at? An objective look at the data proves otherwise, however. We may be approaching a recession, some say, but maybe not, according to others. And if we have a recession, there is no evidence to support the idea that it’ll be 1929 all over again, as Obama implies.
A look at the data belies the Illinois Senator’s message. Unemployment stood at 5.1% in March of this year, which is just slightly above the rate at which the workforce is considered fully employed, and that rate is lower than at the same time in 2002, 2003, 2004 and 2005. Further, the average period that the unemployed were not working is 16.2 weeks, which seems like a long time. But in historical terms, that figure has been consistently higher than it is today since April of 2002.
The Consumer Price Index reflects increases of prices overall since last year at 3.1%. Is that bad? Well, no, not really. Most people think of Cost of Living goes up between three and four percent annually. And in 2007 the CoL rose by 4.1%, which is greater than in both 2004 and 2005, both of which were higher than 2008 to date.
In 2006, the most recent year for which data is available, the poverty rate for families was lower than it’s been since 2002, and for families with a female head of household it was lower than since 2004.
Gross Domestic Product continues to rise at a steady level.
If the U.S. is still producing at a consistent rate; if prices are rising at normal levels, and slower than in recent years; and if poverty rates are lower than recent years, does that sound like an impending depression to you? Sure, we have some problems, which a little research will show isn’t unusual. The housing market has distress in the sub-prime area, something like six percent of the total housing market. And energy prices, particularly gasoline, are rising rapidly. But in constant dollars, gasoline prices still haven’t reached the level of the 80s crisis.
None of that stops Barack Obama from trying to scare people into voting for him by exaggerating data about the economy.
The economy and global warming have something in common: Experts and authorities are deeply divided on both issues, although you would never know that through media accounts. There simply is no consensus among scientists on whether Man causes global warming, or on whether the U.S. is headed for a recession.
It seems that Barack Obama may be the Al Gore of Economics, shouting “the sky is falling, the sky is falling,” when it is demonstrably untrue.