Temple of Gloom

Jimmy P. at the DNC—I keep hearing a lot of this sort of pessimism, both in the speeches and among the delegates: "America is facing its greatest economic challenges since the Great Depression." Really. That's a pretty big stretch given that we've only had one quarter of negative economic growth in the past year, unemployment is still below 6 percent, incomes were growing briskly from 2003-2007, and productivity has averaged more than 2.5 percent a quarter during the past year and a half. Some perspective, people!

And why go back to the Great Depression, anyways? For a really bad economic climate, just go back to 1980, the last year of the Carter administration. The Misery Index (unemployment rate plus inflation rate) was 20.8. Today, the MI is at 11.3. (We were also at the start of a productivity slowdown that took a generation of smarter tax, regulatory and monetary policy to help turn around.) By the way, a new forecast from a respected group of University of Michigan economists predicts the economy will grow 2.6 percent in the first half of 2009, 3.3 percent in the second half, and 3.6 percent in 2010. But that doesn't fit into the gloomy meme here in Denver.