Talking Ourselves Into a Depression

There are a couple of forum posts at Fox (I know that already makes it unpopular with anyone who disagrees about this) that articulate my thoughts about the state of the economy and how we got here. I've included the links to the full article, but it's pretty much standard fare.

First: http://foxforum.blogs.foxnews.com/2009/03/16/sheppard_depression/

Since Lehman Brothers declared bankruptcy on Sept. 15, the Obama-obsessed media, realizing a financial crisis would help the Democrat presidential candidate defeat John McCain, have been continually depicting economic conditions as being the worst since the Great Depression.

I think anyone worth their political salt saw the opportunity when, for whatever reason, people believed in Obama more than McCain about the economy. I have very little idea on what grounds that happened, but from a political strategist's standpoint it doesn't really matter and I can appreciate the need to capitalize on the opportunity. Case in point, instead of reassuring us as he ought to be doing, he continued to capitalize on that worry to get funding for pet projects through the House and the Senate - which he could have done anyway given the democratic majorities - but the political genius was that he did it while the American people were convinced that the majority of Americans wanted the second stimulus - and maybe more stimulus after that, too. 

Continued from the same post above:

So has candidate, president-elect, and President Obama — that is until a few days ago, when he mysteriously declared things are “not as bad as we think.”

It is unclear which “we” the President was referring to, as for approaching six months he has told Americans that the world is close to coming to an end.

Now, half of them believe it. Talk about your inconvenient self-fulfilling prophecies.

On Wall Street, all you have to do to keep money in is keep confidence up. Overinflated gas prices this past summer were an excellent example of that. Everyone believed they'd make money if they put money into it, so they put money into it. But when the President starts telling you things are bad, you stop putting money in, and everybody who has money in loses it. It's a simplistic way to view it, but not too far from reality. 

I think the following forum articulates this idea of a capitalizing on an opportunity best. I'll include a few paragraphs, though i recommend the whole thing: http://www.foxnews.com/politics/first100days/2009/03/16/obama-team-adopts-mccains-optimism-economy/

"Stubborn."  "Out of touch." "Incapable of understanding" the economic crisis. That's how Barack Obama and his presidential campaign team described John McCain last year when the Republican candidate famously said "the fundamentals of our economy are strong."

But now President Obama and his advisers are adopting similar rhetoric as they try to build public confidence in an economic turnaround. 

"Of course the fundamentals are sound," Obama economic adviser Christina Romer said Sunday. The administration is now keeping the focus on "all the fundamentally sound aspects of our economy," Obama said Friday.

White House Press Secretary Robert Gibbs said Monday that there's a "definitional difference between sound and strong," and that the president is still trying to "strengthen" the sound aspects of the economy.

The rhetorical shift is just the latest in which Obama has shown strains of the views and policies of the man he defeated in November, even though in some cases he once criticized those views.

In the case of the economy, analysts note that Obama is trying hard to tamp down the gloom-and-doom rhetoric he used in the weeks following Inauguration Day.