Slow Recovery

Boyes highlights the mistaken notion that the current slow recover is an aggregate demand issue. He first wonders how Thomas Friedman comes to this conclusion and I might add to Boyes excellent analysis a review of Friedman's profession and professing. Friedman is a journalist with a great deal of experience in the middle east based upon his work their in the 1990s. I would argue that Friedman is an excellent example of Sowell's argument that the intelligensia (media and otherwise) take a major role in the formation of public opinion. Friedman has a background in writing and has developed a skill set that employees powerful metaphor to advance his arguments. Note that he sees his role as shaping public opinion rather than reporting the news. An excellent example of his ability to use metaphor in a powerful way is this recent appearance on the News Hour.

Friedman is the first segment

Watch the full episode. See more Nightly Business Report.

Transcript is here:

http://www.pbs.org/nbr/site/onair/transcripts/how_to_fix_economy_friedman_and_mandelbaum_111003/

Note in his analogy Washington DC is the booster rocket for the economy. Clearly Friedman has a goal or agenda here far greater than reporting and his commitment to government intervention and steering the economy is reflective of the ideology of the elite.

But back to the point, is Friedman correct in arguing that aggregate demand is weak. Well, he is 70 per cent wrong, as Bob Higgs points out:

People, please look at the data. They are conveniently available to one and all at the website maintained by the Commerce Department’s Bureau of Economic Analysis, the outfit that generates the national income and product accounts for the United States.

According to these data, real personal consumption expenditure recovered from its recession decline by the fourth quarter of 2010. Continuing to grow, it now stands (as of the most recent data, for the second quarter of 2011) even farther above its pre-recession peak.

Real government expenditure for consumption and investment (this concept does not include the government’s transfer spending, such as unemployment insurance benefits and social security benefits) is also running higher than its pre-recession level.

http://hnn.us/liberty_and_power/articles/141753