Monday, January 24, 2011

The New Rosy Economy: Smoke & Mirrors

Ah, the conservative-led national press... They're going to prove a point, whether it's based on objectivity or not. AP published a bombastic article this morning with the wildly optimistic headline: "Poll: Hiring plans top layoffs by most in 12 years." Wow... just after Repubs took control of the House. Just like that, everything is looking rosy again!

First, a poll is nothing but opinion, based on nothing but opinion. Strike one!

Second, the results of the poll are based on a mathematical equation that amounts to a bunch of bunk. The conclusion that "economists are more hopeful about overall economic growth, the job market and demand for companies' products and services by many measures than they have been since the start of the Great Recession" surrounds this madness:
"The quarterly survey includes the views of 84 economists for private companies and trade groups who are National Assn. for Business Economics members. The data are reported by broad industry group. [typo: great writing there, kids!] Many results are expressed as Net Rising Index, or NRI—the percentage of panelists reporting better outlooks minus the percentage whose outlook is bleaker."
In other words, the number of economists who saw hiring by their firms increasing over the next six months was 42%, compared with 7% who expected to lay off workers. The NRI of 35 was the highest in the 12 years that the question has been asked. Huh? Strike two!
And finally, buried in the sixth paragraph is this little caveat: "However, more layoffs were expected in the transportation, utility, information and communications sectors." Oh, those tiny little industries? Strike three!

Always it's "tomorrow" when things are going to get better... I wonder when it will ever be "today" that there is marked improvement in unemployment.