This is the Song of Polly Anna, as sung by the “Don’t Worry, Be Happy” Chorus, or whistled while passing graveyards:
Verse #1: “Unemployment is down to 4.1 percent, lowest in 17 years. 1.5 million new jobs created since I took office.” (Contributed by the Tweeter in Chief.)
“Don’t be fooled by low unemployment numbers,” says The Hill, not exactly a fringe publication, of the latest report. Candidate Trump actually had it right when he ridiculed the government reports as lipstick on a pig, or, perhaps more to the point, cosmetics on a corpse. The numbers are curried and combed, annualized, seasonally adjusted, revised and updated not to reflect reality, but to replace reality with a shimmering vision of 1950.
Case in point: the latest report estimates that just last month, 968,000 American workers left the workforce. While some of these people are elderly, students or disabled, their numbers have been swelled by people who could be working, who want to work, but have given up looking for work. Thus it is true that the number crunchers somehow massaged the unemployment rate to a 17-year low, primarily by counting as unemployed only those people actively looking for work. Meanwhile the number of people not in the work force, and thus not counted in the calculation, has reached 95 million, its highest level in 40 years.
Verse #2: The stock market has had a one year rally, has reached its highest valuation ever, “because of me,” says the Chief Twit.
The stock market has been on a tear since March 6, 2009, when it hit a low of 6626 and began the drive for 23,000 and above. I forget who was president in 2009, but I’m pretty sure it wasn’t the Twitterator. For most of that time, skeptics have been pointing out that stocks are hideously over-valued, with the market acting more like a casino in which traders gamble other peoples’ money on their expectations of what other traders are going to do. Now, traditional analysts such as those working for Goldman Sachs, Bank of America, the Federal Reserve and 83 per cent of fund managers are joining a swelling chorus of advice for investors that can most succinctly be summed up as: RUN!
Call it a correction, a contraction or a crash, a major stock market disaster is inevitable and imminent, and when it comes, it will be interesting, although useless, to know who the Twit Monger is going to blame.
Verse #3: The Gross Domestic Product has just hit a new, three-year high, is growing at a seasonally adjusted, annualized, inflation-adjusted, combed and curried rate of three per cent, described by the Great Twitipator as GREAT GDP numbers.
The gross domestic product is the government’s guess about the total value of goods and services that changed hands in the country in a given month. The number has been rising constantly since somewhere in the Middle Ages, when I think Conan the Barbarian was president. In the Song of Polly Anna, three per cent growth of the economy is great news, especially when you consider that it occurred right after the impact of three hurricanes!
The thing is, everything that is bought and sold is counted in the GDP, whether or not the purchase is a new car, or a car to replace the one destroyed in the flood. Everything spent to recover from the hurricanes counted as if it was a healthy expansion of the economy, not a desperate clawing back to normalcy after a catastrophe.
Another thing is, the GDP makes no distinction between things bought with cash and things bought with a credit card. It makes a difference. A guy driving a 1978 Ford F-150 pickup may well have more net worth in his paid-for vehicle than a guy driving a brand new Ferrari who owes the bank more than it’s worth. But you have to look at a separate government report, issued on a different date in a different place, to find out that in the month the GDP managed maybe three per cent growth, consumer debt rose by 6.6%. That would be twice as fast. And it puts us consumers pretty much where we were just prior to the 2008 crash — maxed out.
But the song of Polly Anna goes on and on, growth without end, prosperity without end, amen, amen. So why aren’t you singing?