The way some people in the mainstream media are talking about the stock market and economy these days, you’d think it was 1929 rather than 2007.
This kind of extreme pessimism is unwarranted.
Just this morning, for example, we got a Goldilocks jobs increase of 92,000. Wall Street was expecting 130,000, but actually private payrolls increased 120,000, while the government lost 28,000 jobs. That can’t be all that bad.
Meanwhile, the unemployment rate is 4.6 percent, where it's been bobbing about for many months now at a near historic low. Moreover, non-management wages are 3.9 percent above a year ago. This is well ahead of the inflation rate. It means the wallets of American workers are gaining real ground in real purchasing power.
Once again, the education gap figured prominently in the unemployment statistics. If you’re armed with a bachelor’s degree or higher, your jobless rate stands at 2.1 percent. But if you didn’t graduate from high school, your average unemployment rockets up to 7.1 percent.
As for all the gnashing of teeth over corporate and mortgage loans, capital markets are absorbing the credit backup. Stocks posted strong gains the last two days and the long awaited market correction is currently tallying a 4-5 percent loss—quite mild by historic standards. Year-to-date the Dow is still up 8 percent and 20 percent higher than one year ago. All this comes despite a constant Democratic barrage of threats over higher taxes and trade protectionism.
Down in Washington, government shutdown rumors have started trickling out from House Republican members like Minority Whip Roy Blunt. This is because Bush will veto $22 billion dollars of Democratic overspending on appropriations, in addition to all the tax hikes chronicled in today’s Wall Street Journal by editorialist Kim Strassel. It is my hope that President Bush and the GOP congressional minority hang tough on the tax and spend issue.
So, while the mainstream media peddles its flimsy “sky is falling” narrative, the reality is a 13,400 or so Dow, along with rising wages and a 4.6 unemployment rate, point to a prosperous nation. These are the key barometers. The Bush boom continues.
No one should buy into this 1929 scenario. It’s not happening.