- The Washington Times - Wednesday, October 1, 2003

So much economic disinformation comes out of the network news shows that they should start their broadcasts with this warning: “Beware, you may not be getting the full story in this report.”

Take last week’s news about incomes and poverty. What they reported was largely accurate as far as it went, but what they left out gave viewers a distorted picture of the true nature of poverty and household incomes in America today.

Yes, the number of people below the poverty income level rose last year as a result of a number of factors. The economic slump between 2000 and 2002 was the chief reason. (Divorce is a big factor in rising poverty, though this is rarely mentioned in these stories.)

But it wasn’t reported that the number of poor in 2002 was still below average poverty levels of the past 20 years.

Nor did the networks point out that last year’s 12.1 percent poverty rate (up from 11.7 percent in 2001) was still below the 15.1 percent rate in 1993.

The poverty number falls and rises with the economic cycles, but over the long term poverty has been falling in America — especially over the past decade.

Also unreported was the remarkable fact that the poverty rate was the same as it was last year for whites, Latinos and Asians. The big increase was among blacks — rising from 22.7 percent to 24.1 percent — which sent the overall rate up by four-tenths of 1 percent.

The Census Bureau numbers also told us the median household income fell last year. OK, incomes fall when the economy declines and unemployment rises, but this is a moving number, and that was last year’s news.

The good news story this year is that incomes have been rising, thanks to the Bush tax cuts. And that has increased consumer spending, which has produced two big improvements:

(1) Retail sales are up by eight-tenths of 1 percent in August alone, following a 0.9 percent increase in July.

(2) That’s fueling faster economic growth — 3.3 percent in the second quarter and an estimated 4 percent to 5 percent growth in the July through September third quarter.

There were other strong economic reports last month that did not get even a mention on the network news shows: Home sales rose to another record level in August. Single family home sales increased 3.4 percent to 1.15 million homes. Previously owned home sales rose by 5.5 percent.

So we have rising incomes, higher retail sales, the continued boom in housing, increased economic growth and the Fed’s pledge it will keep interest rates low for sometime to come.

This has kept the Conference Board’s index of leading economic indicators — the measure of how the economy will perform over the next half year or more — rising for four straight months.

Job creation, as always, remains the one lagging statistic to show any significant improvement. Businesses wait until they have enough evidence of higher sales and orders before hiring more workers. In the interim, they rely on increased overtime or temp workers.

But there are signs the job picture will be improving. The welcome story in this year’s economy is higher earnings, and with annual economic growth rising to 4 percent or more, layoffs and jobless benefit claims have been declining.

The Democratic presidential candidates have been having a field day pounding President Bush for the 6.1 percent unemployment. Their mantra, which gets repeated over and over again on the campaign stump, claims this is the worst jobless crisis since Herbert Hoover — with no disagreement from network news editors who gleefully include this line in all their reports.

The truth is of course that we have had 6.1 percent unemployment many times since the Hoover administration and many economists once viewed that rate as full employment.

“In reality, today’s 6.1 percent unemployment rate is the same as it was in 1994 or 1987 or 1978 — years in which nobody pretended to see any similarities with the Great Depression,” says economist Alan Reynolds.

My own belief is that more Americans are working than the Labor Department’s monthly business payroll survey finds. They are small business entrepreneurs, often working independently under contract to larger firms, which the payroll survey misses.

The network stories uniformly focus on manufacturing jobs that have been moved overseas, and that is certainly true. What they do not report is a deeper, structural change that has been going on for decades: the ability through new technology to make things faster, cheaper and better with a lot fewer workers.

All Americans benefit from this change through lower prices at home and beating the competition abroad. We benefit in another way, too, over the long term: New technology inevitably produces more jobs to develop, sell, ship and promote these products, which is why total U.S. employment is the highest it has ever been in our history.

Donald Lambro, chief political correspondent for The Washington Times, is a nationally syndicated columnist.

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