links for 2007-11-10
Prince Alwaleed on Citigroup

Can We Retire Bob Herbert?

Yes, it is yet another edition of why oh why can't we have a better press corps. This time it is Bob Herbert who should be retired and sent to doing something socially useful:

Recession? What Recession?: If it looks like a recession and feels like a recession.... “Quite frankly,” said Senator Charles Schumer, peering over his glasses at the Fed chairman, Ben Bernanke, “I think we are at a moment of economic crisis, stemming from four key areas: falling housing prices, lack of confidence in creditworthiness, the weak dollar and high oil prices.” He asked Mr. Bernanke, at a Congressional hearing Thursday, if we were headed toward a recession.

An aide handed the chairman his dancing shoes, and Mr. Bernanke executed a flawless version of the Washington waffle.... With all due respect to the chairman, he would see the recession that so many others are feeling if he would only open his eyes. While Mr. Bernanke and others are waiting for the official diagnosis (a decline in the gross domestic product for two successive quarters), the disease is spreading and has been spreading for some time...

This is simply wrong: We may fall into a recession in the near future--odds are 50-50. We might be in a recession right now--but probably not. We almost surely were not in a recession in July-September. Ben Bernanke won't say whether we are headed for a recession because he does not know.

Herbert goes on:

Bankruptcies and homelessness are on the rise. The job market has been weak for years. The auto industry is in trouble. The cost of food, gasoline and home heating oil are soaring at a time when millions of Americans are managing to make it from one month to another solely by the grace of their credit cards. The country has been in denial for years about the economic reality facing American families. That grim reality has been masked by the flimflammery of official statistics (job growth good, inflation low) and the muscular magic of the American way of debt: mortgages on top of mortgages, pyramiding student loans and an opiatelike addiction to credit cards at rates that used to get people locked up for loan-sharking...

This is at most one-quarter true. The job market has not been as strong as the unemployment rate suggests, but it has not been extraordinarily weak. Inflation has been low--in 2002, we were scared that it was going to go too low. The problem is not that middle America's incomes have been falling since 2000: the problem is that middle America's spending has been rising rapidly while incomes have not.

And then there is:

In an interview after the hearing, Representative Hinchey discussed the disconnect between official government reports and the reality facing working families.... [T]he most popular measure of inflation, the Consumer Price Index, does not include the cost of energy or food, “the two most significant aspects of the increased cost of living for the American people.”

Yes, it does.

How has the New York Times managed to pick Bob Herbert out of the 75 million liberal adults in America? It is a mystery.