Wednesday, July 02, 2008

The Great Media Depression

According to the Business and Media Institute:

The economy consumes the nightly newscasts. Broadcast networks report that America’s finances are “like a house of cards.” ABC, CBS and NBC even hyped similarities to the Great Depression more than 40 times in the first four months of 2008.

Today’s journalists are making repeated connections to the largest economic crisis in modern times – often with the phrase “not since the Great Depression.” Only a few of those comments explained the differences between today’s economy and the nation’s darkest economic years, or bothered to note that America is not in a depression.

MP: Before we (and especially the media) get too carried away about comparing today's economy to the Great Depression, consider the chart above (click to enlarge) that shows the annual unemployment rate from 1929 to 2008. Between 1930 and 1940, the jobless rate averaged 17.1%, which is way, way above anything we've seen since, and far, far above today's jobless rate of 5.5%.

See related article by John Stossel "Dire News from My Colleagues."

24 Comments:

At 7/02/2008 7:57 AM, Anonymous Anonymous said...

The news media is having huge financial troubles of its own. This may be magnifying our current economic situation as nearly depression-like in their minds, at least.

 
At 7/02/2008 9:07 AM, Anonymous Anonymous said...

Saw you on ABC 12's Newsmaker program. I work there in the Engineering Department but most of my job is monitoring what we air. The doom and gloom emitted from the news division makes me wince so I try to mentally filter it. Still, I wonder if the FED should raise interest rates and raise them hard to pop the commodities bubble?

 
At 7/02/2008 10:22 AM, Blogger rufus said...

American Economy for Sale:

It's estimated that the ethanol mandate is saving American motorists $35 Billion/Yr at the pump. It's, also, employing 268,000 Americans.

The Price for Rick Parry, and the Republican Governors, to sell it down the River? $100,000.00 from Pilgrims Pride, evidently.

I think some laws might have been broken, here.

Despicable.

 
At 7/02/2008 12:18 PM, Blogger randian said...

It's estimated that the ethanol mandate is saving American motorists $35 Billion/Yr at the pump.

Estimated by whom? Does that estimate include hidden subsidies? Quite frankly, I find this unlikely.

 
At 7/02/2008 12:52 PM, Anonymous z said...

Is a blog devoted to alternative fuels where we should look for impartial information on the benefits of alternative fuels?

 
At 7/02/2008 2:18 PM, Anonymous Anonymous said...

Rufus,

One also needs to consider what diversion of corn to ethanol is doing to feedstock prices:

http://www.missourifarmertoday.com/articles/2008/06/19/news/feed.txt

When farmers are feeding broken cookies to their hogs, hey there's a problem, Virginia.

 
At 7/02/2008 2:39 PM, Blogger Marko said...

rufus said...
American Economy for Sale:

It's estimated that the ethanol mandate is saving American motorists $35 Billion/Yr at the pump. It's, also, employing 268,000 Americans.


Couple good answers to this:

What, you don't think American motorists pay taxes, that pay for the subsidies?

What, you don't think that drilling more oil, building more refinery capacity, making more nuclear power plants, and turning coal into liquids will also create jobs?

I have read that just drilling in ANWR would create over 700,000 jobs across the United States.


This whole thing is a great example of how Bush Derrangement Syndrome can actually become a self fullfilling prophecy. Talk down the eonomy so badly that people lose confidence and move their investments from equities to gold and commodities - which creates a bubble, which feeds back and hurts the eonomy and puts normal folks out of work (perhaps, eventually). Go Media, Go!

 
At 7/02/2008 2:58 PM, Blogger juandos said...

Yes rufus what credible source is making those alledged pronouncements?

Why is what Gov. Perry did supposedly a, "bad thing"?

What were the rest of the citizens doing in the meantime? Sitting on their collective hands?

 
At 7/02/2008 2:58 PM, Blogger Marko said...

rufus said...
American Economy for Sale:

It's estimated that the ethanol mandate is saving American motorists $35 Billion/Yr at the pump. It's, also, employing 268,000 Americans.


Couple good answers to this:

What, you don't think American motorists pay taxes, that pay for the subsidies?

What, you don't think that drilling more oil, building more refinery capacity, making more nuclear power plants, and turning coal into liquids will also create jobs?

I have read that just drilling in ANWR would create over 700,000 jobs across the United States.


This whole thing is a great example of how Bush Derrangement Syndrome can actually become a self fullfilling prophecy. Talk down the eonomy so badly that people lose confidence and move their investments from equities to gold and commodities - which creates a bubble, which feeds back and hurts the eonomy and puts normal folks out of work (perhaps, eventually). Go Media, Go!

 
At 7/02/2008 3:03 PM, Anonymous Anonymous said...

Marko,

Unfortunately for the media, saying it does not make it so. Agree that this definitely looks like Bush derangement syndrome.

Rufus,

There are some excellent points suggested by my fellow bloggers on the issue of ethanol to which I would add the following:

Paul Krugman on ethanol:

http://economistsview.typepad.com/economistsview/2007/01/paul_krugman_th_1.html

Europe is also highly mixed in regard to ethanol:

http://www.businessweek.com/globalbiz/content/apr2007/gb20070427_164153.htm

There are many well-reasoned arguments against corn ethanol on energy, environmental and economic grounds. You appear to be the last holdout on ethanol on this blog. While that certainly attests to strength of character and single-mindedness, it might also suggest that a reappraisal is in order. It is often useful to debate one's self in these cases.

Most of us are finding the subject a bit of a hobby horse.

 
At 7/02/2008 3:12 PM, Blogger Mari said...

You are comparing apples and oranges...

In 1930's unemployment is not measured the same way as it is today.

Do you have any comparison of apples to apples?

 
At 7/02/2008 3:38 PM, Blogger K T Cat said...

Rufus got some great pub out of his comment. Can I get some, too if I say something unbelievably stupid?

I pick the Dolphins to win the Super Bowl next year!

There. Was that stupid enough?

 
At 7/02/2008 3:44 PM, Blogger juandos said...

"Rufus got some great pub out of his comment. Can I get some, too if I say something unbelievably stupid?"...

Oh so cruel kt cat, but funny, really, really funny...:-)

"In 1930's unemployment is not measured the same way as it is today"...

O.K. mari, I'll bite, just how was unemployment measured back then?

 
At 7/02/2008 4:53 PM, Blogger rufus said...

Iowa State Study on Ethanol's Effect on Gasoline Prices

Another study was done by Branchi at Merril Lynch. They concluded that ethanol was holding gasoline prices down by 15%.

Another dead giveaway would be the rapidity of Diesel Price Increases compared to Gasoline Price Increases.

 
At 7/02/2008 4:57 PM, Blogger rufus said...

I should have mentioned that we use 144 Billion Gallons of Gasoline/Yr in the U.S.

Multiply 144 Billion by the middle of Ia State's range ($0.35) and you would come out at about $50 Billion.

 
At 7/02/2008 5:11 PM, Blogger juandos said...

Thank you for the link rufus...

Interesting...

BTW let me ask you this, what if some other state had a major interest in winter wheat instead of corn like Iowa does and there was a similer study done that refuted (just remember its a thought experiment) this study, would you believe them?

I'm NOT at all denigrating the contents of this study or even remotely claiming that Iowa State Univeristy is presenting a loaded paper but one does have to wonder even a little bit...

 
At 7/02/2008 5:21 PM, Blogger rufus said...

Ah, Juandos, they asked for a link; I put up a link. I'm convinced, not by this study, but by a couple of years studying this, and my own common sense.

1) We're using 600,000 Barrels/day of ethanol, and

2) despite, oil, diesel, nat gas, coal, propane, and every other energy source in the world surging, the oil companies can't raise the crack spread an inch above break-even on gasoline.

 
At 7/02/2008 5:52 PM, Blogger juandos said...

rufus says: "I'm convinced, not by this study, but by a couple of years studying this, and my own common sense"

O.K., I can buy into that..

Then again what does your common sense tell you about the following: ETHANOL VEHICLES A HEALTH HAZARD

Or this: Gasoline Additives Fuel High Prices and Environmental Problems

rufus, I don't know if ethanol is as dangerous as full fledged gasoline but I do know one thing from personal experience, E-85 vehicles in the Rockies just didn't have the power to move very well...

 
At 7/02/2008 6:33 PM, Blogger rufus said...

Juandos, Jacobsen looked at "ozone," but ignored CO which, it seems, is also very active in creating smog.

He did one of those "famous" computer models, kinda ala Hansen; but, in the real world when a 6.7% blend of ethanol was introduced into S California gasoline the smog levels dropped, dramatically. The same thing happened in E. Wisconsin, Connecticut, and NY City.

While we're on the subject of Stanford, did I mention that a recent study there found 1.2 Billion Acres of abandoned, fertile land, worldwide. At 500 gallons/acre how much would that be?

 
At 7/02/2008 8:51 PM, Blogger OBloodyHell said...

> It's estimated that the ethanol mandate is saving American motorists $35 Billion/Yr at the pump.

... and costing them how much at the supermarkets? Pfeh. You'll have to provide more info than a random rah-rah-rah report for ethanol to make it sound like it was ever a good move.

> At 500 gallons/acre how much would that be?

Zero, if the NeoLuddite EcoDoom twits get their way.

And you still haven't convinced me that the growing of corn actually uses sufficiently less energy than it takes to produce that ethanol that it actually pays for itself.

 
At 7/02/2008 11:42 PM, Blogger rufus said...

Give me time.

:)

Oh, here's a neat website to browse around for Information on the effect of Ethanol on Food Costs.

 
At 7/03/2008 8:48 PM, Blogger OBloodyHell said...

> Oh, here's a neat website to browse around for Information on the effect of Ethanol on Food Costs.

That's the same people who did this one (I think you, or someone else, put it forth):

Political Donation Buys Ethanol Attack?

Granted, they're just repeating the HC, but it's not like they are asking any obvious critical questions of the issue -- like "So they expressed a concern to the governor, and the governor agreed? BFD." This is hardly evidence of collusion or manipulation.

So I'm left to wonder how critical they are when something challenges their position with opposing data.

 
At 7/06/2008 8:25 PM, Blogger juandos said...

"Juandos, Jacobsen looked at "ozone," but ignored CO which, it seems, is also very active in creating smog"...

Well rufus I'm afraid you might be in error regarding which is worse creator of smog...

CO tends to be a stable molecule where as ozone is a very active molecule relatively speaking, so Jacobsen was right to look at the ozone component...

Regarding California, Wisconsin, Connecticut, and New York city, Jacobsen noted that those places were already using bouquet gasoline blends so adding or subtracting ethanol for them is an entirely different story...

Regarding food shortages due to diverted corn supplies, that will happen and that will pass I believe rather quickly as farmers adjust to the market conditions...

One must also remember that one reason for the price spike in food is not only the costs of moving it has gone up but a weak dollar isn't helping either...

"I mention that a recent study there found 1.2 Billion Acres of abandoned, fertile land, worldwide"...

So who are you going to attempt to talk into moving to Mugabe Land and farm those fertile but abandoned acres?...:-)

 
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