Reviewing some economic news of the past few weeks:
1. The price of oil has fallen by ten bucks a barrel – from roughly $58 to $48 — ever since Goldman Sachs analyst Arjun Murti predicted it was heading for $105.
2. The U.S. Treasury announced that April tax receipts were astonishingly strong, leading experts to predict this year’s budget deficit has been overestimated by at least $50 billion.
3. Last month’s surging exports and employment (previously called a “soft patch”) mean the perfectly respectable 3.1 percent first quarter GDP growth is soon to be revised upwards towards 4 percent. So, while earlier reports said the pace of economic growth over the past 8 quarters had been running at a mere 4.3 percent pace (which gave Paul Krugman a “whiff of stagflation”), it was actually a bit better than that.
For Democrats planning to rehash Senator Kerry’s 2004 nonsense about the economy to gain Congressional seats next year, all this goods news is very bad news indeed. Whenever reality goes against their theories, however, the Dems can count on The New York Times to “interpret” the news in imaginative ways.
Last Sunday, New York Times writer Daniel Gross warned of “The Perfect Storm That Could Drown the Economy.” I naturally assumed he must be writing about some other country, but apparently not. Mr. Gross presumably reads the sort of news we just reviewed. Yet he somehow sees in these same tea leaves “many obvious and worrisome portents” that could lead to a “major recession” or even a “full-blown crisis.” In fact, Mr. Gross imagines “some [U.S.] imbalances are eerily reminiscent of conditions that helped touch off recent economic crises: Mexico in 1994, Asia in 1997, Russia in 1998 and Argentina in 2002.” “What’s more,” he adds, “a recovery would be comparatively slow in coming.”
I long ago stopped expecting New York Times reporters and columnists to accurately report the economics news. But you’d think they might at least try reading the economic news.