Times Warns Economy "Will Worsen Before It Gets Better"
Is the Times talking a good economy down again?
Friday's paper led with Edmund Andrews' "Fed Chief Warns Of Worse Times In The Economy - No Interest Cut Seen."
The Times was the only major paper to find Federal Reserve Chairman Ben Bernanke Congressional testimony worthy ofits lead slot. Bernanke did tell Congress growth was likely to "slow noticeably," but that recent economic data "continued to suggest that the overall economy remained resilient in recent months."
The Times and Andrews boiled that ambivalent message down to a gloomy headline and this baleful prediction:
"Ben S. Bernanke, chairman of the Federal Reserve, told Congress on Thursday that the economy was going to get worse before it got better, a message that received a chilly reception from both Wall Street and politicians.
"On a day when stock prices swung wildly, the dollar hit another new low against the euro and further signs emerged from retailers that consumers are growing more cautious about spending, Mr. Bernanke warned that the economy was about to 'slow noticeably' as the housing market continues to spiral downward and financial institutions tighten up on lending.
The Times even used the "worse before better" phrase as the jump page headline - "Bernanke Warns the Economy Will Worsen Before It Gets Better," implying the economy is lousy now, which is not what Bernanke said, as Andrews himself reported:
"Despite all these worrying signs, Mr. Bernanke noted that the economic data since the Fed reduced interest rates last week 'continued to suggest that the overall economy remained resilient in recent months.'"
"With oil prices approaching the symbolic threshold of $100 a barrel, the world is headed toward its third energy shock in a generation. But today's surge is fundamentally different from the previous oil crises, with broad and longer-lasting global implications.
"Just as in the energy crises of the 1970s and '80s, today's high prices are causing anxiety and pain for consumers, and igniting wider fears about the impact on the economy.
"Unlike past oil shocks, which were caused by sudden interruptions in exports from the Middle East, this time prices have been rising steadily as demand for gasoline grows in developed countries, as hundreds of millions of Chinese and Indians climb out of poverty and as other developing economies grow at a sizzling pace.
"'This is the world's first demand-led energy shock,' said Lawrence Goldstein, an economist at the Energy Policy Research Foundation of Washington."
Mouawad moralized about American profligacy, hinting we should adopt the big-government policies of Europe. (Mouawad hasplayed the same pro-regulation riff before, contrasting "French resolve and American abandon" on energy efficiency.)
"While demand is growing fastest abroad, Americans' appetite for big cars and large houses has pushed up oil demand steadily in this country, too. Europe has managed to rein in oil consumption through a combination of high gasoline taxes, small cars and efficient public transportation, but Americans have not. Oil consumption in the United States, where gasoline is far cheaper than in Europe, has jumped to 21 million barrels a day this year, from about 17 million barrels in the early 1990s."