Are the Democratic delegates crazy to think we're in a depression?
At the Democratic convention last week, James Pethokoukis had some fun asking delegates economic questions:
I asked 24 of them whether the economy was in an expansion, a recession, or in a depression. The results are stunning, I think, given that on the same day I took the informal survey, the Commerce Department reported that the economy grew at a revised 3.3 percent annual pace in the second quarter. The numbers:
1) 12 percent said "expansion"
2) 25 percent said "recession."
3) 63 percent said "depression."
Jimmy P. seems to see this as evidence of the economic illiteracy of the Democratic delegates. The ill-informed answers he got to a question about tax rates offer some backing for this view. Even with questions being raised about that 3.3% growth figure, we certainly aren't in anything even approaching a 1930s-style Great Depression.
But I do wonder if we'll eventually look back at the Oughts as an economic lost decade, sort of like the 1970s. There were some good growth quarters in those days, too (16.7%, in the second quarter of 1978, was the high point--the economy was a lot more volatile back then). But on the whole it was a time of prolonged economic stagnation and distress. Which is true of the current decade as well (in fact, growth has been even slower so far in the '00s than it was over the course of the 1970s).
What we're going through is an economic episode much longer and more significant than a standard-issue recession. It started with the stock market collapse of 2001-2002, was temporarily shoved aside by the housing bubble, but is now back and may stick around for a while. It's not a Depression. But it may be a depression.
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1
I don't think the Democrats are crazy for thinking we're in a depression, but I don't think they're particularly honest about it either.
I think this election the Democrats are trying to scare you into voting for them over the economy, and Republicans are trying to scare you into voting for them over foreign policy and military issues.
I think getting a spin free/honest answer from a Democratic delegate is about as likely as getting a spin free/honest answer from a Republican delegate about are we safer today than we were 8 years ago. For them there is something to be gained from spinning the answer in a light favorable to your cause.
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2
The fact is that we are economically less secure as a nation and also militarily less able than we were 8 years ago.
Look at all of those CDOs, CDSs, MBSs, and the the horrible shape our financial house is in looking at debt-to-income and in terms of unemployments and trends. Economically, we are less secure. Not a depression, unless you just lost your job.
Then look at our ineffectual response to Russia, being stuck in Iraq and our inability to control (or at least influence) Iran, Syria, and China. We are militarily less secure.
Then look at oil and energy policy. Nuff said.
Speaking of.Justin,
How about some elucidation on what both sides believe in terms of energy policy? Are the two sides really that far apart? Sounds like everybody is advocating the kitchen sink method...drill, nuclear, wind, solar, natural gas/hybrid cars....why doesn't Congress just do it already?
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