Donald Luskin at WaPo is apparently in the Phil Gramm camp, saying that the country has a lot of nerve bitching about the economy, and that it's really not so bad. In general, I actually agree, but with that rather crucial caveat that things are likely to get a whole lot worse before they get better. How much worse, nobody knows, but that's why we worry. A paragraph of the article which sums up the gist:
Things today just aren't that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression -- or exaggerated Depression comparisons.First, companies which own or guarantee $5 trillion dollars of mortgage debt are more than "trouble spots". Remember when Bernanke said that certain housing markets are "frothy"?
I'd like to focus on one particular statistic he cites:
Here's another one not to be too alarmed about: Obama is flat-out wrong when he frets on his campaign Web site that "the personal savings rate is now the lowest it's been since the Great Depression." The latest rate, for the second quarter of 2008, is 2.6 percent -- higher than the 1.9 percent rate that prevailed in the last quarter of Bill Clinton's presidency.
Here's a graph of the personal savings rate (from the St. Louis Fed):
Pretty fair guess that that spike is from the rebate checks. Anyway, Obama might get the exact statistic wrong but he gets the idea right. The personal savings rate has dropped steadily since 1980. People don't have money to save anymore.
People can use truthful statistics to lie, simply by selecting noise points. Luskin needs to get a more complete data set. Or he's a liar.
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