Economic illiteracy

• Article
• Comments ()
• Click-2-Listen

By

The president is out on the hustings. He is exhorting steadfastness on the war. He is booming the economy. He will be getting hoarse quite soon. The reason is simple. He is trying to reason with the unreasonable.

On the matter of the war his opponents' rejection of reason is demented. There is no alternative to facing down the terrorists and the nihilists in the Middle East. They attacked us here and will do so again and again unless they are defeated -- and for many of them that means death. They have transcended the kamikaze pilots of World War II to become a kamikaze movement. There is no alternative to defeating them.

On the matter of the economy, the president's opponents not only reject reason, they reject an abundance of evidence that the economy is vigorous and on course to healthy growth. On the war his opponents gin up a host of spurious arguments and faulty data. On the economy the data is overwhelmingly against them and as for spurious arguments they have very few. This economy is in a period of growth and there is no alternative argument to growth save for those made by the diehard disciples of the late professor Thomas Malthus (1766-1834), prophet of scarcity and no growth.

Yet gloom over the economy is pumping from every smoke stack of the Kultursmog. During the 2004 presidential election, when the economy had already been growing strongly for a year, 36 percent of the citizenry had been persuaded that the economy was in recession. Now a year later, with growth nearing 4 percent for the past 10 quarters, 43 percent of the citizenry believe we are in recession. Unemployment has dropped from 5.5 percent to 5 percent. In the past 16 months 3.5 million jobs have been created. Stocks are on the way up. The Fed has taken strong measures to squelch inflation and seems to be succeeding with no damage to healthy growth. Still with practically every economic announcement the coughing, wheezing voices of the Kultursmog predict economic danger.

Brian S. Wesbury, one of the most infallible students of today's economy, laments in the Wall Street Journal: "During a quarter century of analyzing and forecasting the economy, I have never seen anything like this. No matter what happens, no matter what data are released, no matter which way markets move, a pall of pessimism hangs over the economy." Whereupon he cites the auspicious data and their gloomy explications: Bond yield up? Housing market imperiled. On Monday, housing market weakens? The housing bubble is about to burst. On Tuesday, the housing data strengthens? Bad news, the Fed will raise interest rates.

How do we explain the unreasoning response to all this good news? How do we prevent the president from growing hoarse in defending a perfectly defensible economic vigor? Allow me to offer this explanation. Republicans in power worry Democrats. If the Democrats presided over an economy as robust as this, there would be no apprehension in the Kultursmog. That brings us to the heart of the matter. The media are not dominated by liberals. They are dominated by Democrats.

Actually there are no true liberals out there nowadays. For many decades those who were pleased to call themselves liberals in America were civil libertarians of various degrees of libertarianism who believed in state management of the economy and in inflicting moralism into every disagreement. When President Bill Clinton said "the era of big government is over" he was merely acknowledging the confusion into which American liberalism had collapsed. A liberal today is merely a Democrat.

Democrats, certainly all who identify themselves deeply as Democrats, worry about George W. Bush in the White House. In this they are sincere. Mr. Bush frightens them. Of course, Ronald Reagan frightened them too. In fact, it is instructive to note that the very same things that worried them about Reagan worry them about Mr. Bush. Both are seen as stupid, overly religious, overly patriotic, simple. The concern our Democrats have about the economy is heartfelt. I do not think anything can be done to cheer them up. Certainly improvement in the economy is not going to cheer them up. What could be done? If growth were to rise from 4 percent (third-quarter growth has just been revised up from 3.8 percent to 4.3 percent) to 5 percent they would only fret about inflation or perhaps the rape of the environment. And do not try to cheer them up with a hearty Merry Christmas. They suffer some bugaboo about that too. The best course is to avoid all serious discussion with them. Talk to them about the New Deal or the New Frontier. Remind them that Chelsea Clinton is almost old enough to run for president, and she has never been accused by an independent counsel of lying.

R. Emmett Tyrrell Jr. is founder and editor in chief of the American Spectator, a contributing editor to the New York Sun, and an adjunct scholar at the Hudson Institute. His latest book is "Madame Hillary: The Dark Road to the White House."