Frolicking With the Bears

Here’s hoping that everyone had a happy weekend. After all the dreary economic news that arrived on Friday, it couldn’t have been easy.

Just a day after the government quietly revised its estimate of the gross domestic product’s growth in the first quarter down to a mere 1.9 percent, a report released Friday by the Bureau of Labor Statistics showed that the economy added a meager 69,000 jobs in the past month, the smallest total in two years, and an increase in job-seekers pushed the unemployment rate up to 8.2 percent. The more telling U6 rate, which includes people forced into part-time work and those still “marginally attached to the labor force,” rose from an already staggering 14.5 percent to 14.8 percent. Oh, and the Leading Economic Indicators declined this month, too. Throw in another slew of stories suggesting that Europe is on the verge of economic implosion, China’s growth is rapidly slowing, and the emerging of economies of India and Brazil are also feeling sluggish, and it was enough to send the Dow Jones down by 274.88 points, with similar carnage on the other boards leaving the stock markets down for the year.

Even the peppiest cheerleaders in the press didn’t try to pretend that it wasn’t completely awful. Some reports alleged that the increase in job-seekers indicated some optimism, however brief and futile, and several added a few perfunctory from the eternal optimist Mark Zandi of Moody’s Analytics blaming it all on the weather, but that was the best they could do. The Hill, a publication that prefers to accentuate the positive when reporting on the economy in the age of Obama, even quoted an unnamed White House official who described the jobs report as an “Oh sh*t moment.” The elision is The Hill’s, so we’re not entirely certain what the unnamed official was saying, but it can’t be good.

Gloom and doom has long been the default mood here, so we welcome the company, but it’s nonetheless unsettling to see such unabashed despair in the popular press. Worse yet, no one seems to be sincerely hopeful that anyone has a solution that will avert further decline if not utter collapse. There’s talk both here and abroad about another round of “quantitative easing,” but after the gazillions of dollars, euros, yuan, and whatnot that have already been printed up in the past few years there is no reason to believe that it will have any positive effect in the short term and every reason to believe that it will have catastrophic effects in the long run. The necessary reforms of entitlement programs and public sector compensation seem to be politically untenable, both here and abroad, as people everywhere seem to be as intent on defying economic reality as the politicians they have elected.

Americans might still choose another path, and what most seemed to alarm the press about Friday was a general consensus among the chattering class that it had been a good day for Mitt Romney. Should the current trends continue into November, and no one seems to have a good theory about why they won’t, the Obama campaign won’t even be able to continue making its conspicuously modest claim that at least we’re making some progress. We expect the president will say that it’s not his fault Europe’s over-taxed, over-regulated economy collapsed under the weight of its lavish entitlements and bloated public sector, but it won’t be Romney’s fault, either, and the Republicans should be able to point out the rather ironic nature of Obama’s excuse.

— Bud Norman