It's a Recession - Not a Catastrophe

Then again, if Obama were to tell the truth, he wouldn't be scaring the hell out of people. Liar!

PRESIDENT Obama, writing in The Washington Post, said, "By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression." But how would we know if and when this crisis is really more "deep and dire" than others?

Many may believe we're in the worst recession since the Great Depression, if only because politicians and the press keep repeating that claim. But we need to compare some facts to discern whether this recession is (or will be) "worse" in some sense than those of 1973-75 or 1981-82.

Congressional Budget Office Director Douglas Elmendorf told the House Budget Committee that if the economy is still contracting by mid-year, then this recession will be longer than the 1981-82 and 1973-75 downturns, each of which lasted 16 months. Yet this recession was quite mild until last September. And the severity and human discomfort of downturns can't be measured by their duration.

A wise adviser to President John Kennedy, Arthur Okun of Yale, devised the "misery index" to gauge the pain of economic crisis - a measure that simply adds together the unemployment rate and the inflation rate. It hit 22 percent in June 1980, during an inflationary recession that preceded the Fed's disinflationary squeeze of 1981-82. The misery index was nearly as bad in January 1975, at 19.9 percent.

Assuming inflation was close to zero this January, the misery index would have been roughly the same as the unemployment rate, or 7.6 percent. By this standard, we have a very long way to go before the economy feels nearly as miserable as it did in 1975 or 1980.

Pelosi Says Birth Control Will Help Economy

Jesus help us. These people are making our financial policy. This from Drudge:

Speaker of the House Nancy Pelosi boldly defended a move to add birth control funding to the new economic "stimulus" package, claiming "contraception will reduce costs to the states and to the federal government."

Pelosi, the mother of 5 children and 6 grandchildren, who once said, "Nothing in my life will ever, ever compare to being a mom," seemed to imply babies are somehow a burden on the treasury.

The revelation came during an exchange Sunday morning on ABC's THIS WEEK.

STEPHANOPOULOS: Hundreds of millions of dollars to expand family planning services. How is that stimulus?

PELOSI: Well, the family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children's health, education and some of those elements are to help the states meet their financial needs. One of those - one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government.

STEPHANOPOULOS: So no apologies for that?

PELOSI: No apologies. No. we have to deal with the consequences of the downturn in our economy.