The New York Times’ Rose Colored Glasses On The Economy


The New York Times is carrying a front-page article today entitled “Why So Glum? Numbers Point To A Recovery.”  It is but the latest example of how The Times has turned into an propaganda instrument of the Obama administration.

Floyd Norris, the article’s author and the chief financial correspondent of The New York Times, argues that the American economy:

appears to be in a cyclical recovery that is gaining strength. 

According to Floyd Norris, it is time to uncork the champagne – happy days are here again!  I think that I will keep my champagne on ice for awhile.

Let us suppose for the moment that last month’s job increase figure is a harbinger of an improving employment picture and that early signs of increased consumer spending will continue.  How long will it take to regain the job levels at the start of this recession, when the unemployment rate was about 5%?  According to  the “Joint Statement of Timothy F. Geithner,
Peter R. Orszag, and Christina D. Romer Before the Committee on the Appropriations, U.S. House of Representatives”:

the unemployment rate is likely to remain elevated for an extended period.  The forecast projects that in the fourth quarter of 2011, the unemployment rate will be 8.9 percent, and that by the fourth quarter of 2012, it will be 7.9 percent.

That projection is coming from the Obama administration’s own economic experts – hardly a cause for optimism.  Remember that Obama had promised us that his stimulus program would guarantee an unemployment rate at its worst not to exceed 8%.  We are still mired at 9.7%.   And that does not even consider the much higher rate of underemployment facing many Americans.

However, there is a far more significant reason for the glumness that The New York Times wants so badly to dispel.  With trillion dollar deficits out in the future as far as the eye can see, we are headed for bankruptcy.

The head of the Congressional Budget Office, Doug Elmendorf, said yesterday that the nation’s fiscal path is “unsustainable,” and the problem “cannot be solved through minor tinkering.” The public debt is projected to rise from $7.5 trillion at the end of 2009 to $20.3 trillion at the end of 2020 based on present budget assumptions.

New taxes and/or drastic spending cuts will be necessary to stem the tide.  The current head of the Federal Reserve Ben Bernanke said in a speech on Wednesday that the government must cut entitlements or raise taxes:

These choices are difficult, and it always seems easier to put them off — until the day they cannot be put off anymore

Guess which course the spend-happy Democrats will pick if they feel they have to?

Former Federal Reserve Chairman Paul Volcker, a top economic advisor to Obama, knows where things are headed. He said earlier this week that a value-added tax may be necessary.  Unfortunately, that’s a great way to kill jobs.  Just look at Europe where VAT taxes are prevalent.

Welcome to Obama’s European-style socialism.

Like the captain of the Titanic, the chief financial columnist of The New York Times does not see the iceberg ahead.