Bradly Schiller on President Obama’s fearmongering regarding the economy,
Mr. Obama’s analogies to the Great Depression are not only historically inaccurate, they’re also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren’t likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fearmongering can trigger a political stampede to embrace a “recovery” package that delivers a lot less than it promises. A more cool-headed assessment of the economy’s woes might produce better policies.
As consumer confidence erodes it wouldn’t be surprising to see spending decline and savings increase. So, if the President’s rhetoric does have an impact on consumer confidence then President Obama’s scare rhetoric could be making the economy worse to the extent that it reduces consumer confidence. The question though is how much impact does the President of the United States’ statements have on consumer confidence?
Still, that aside one of the things that many complained about regarding President Bush and his administration was their almost hostile attitude towards being intellectual and reality based. President Obama was supposed to change that. Yet what we get are statements that are not based on facts. We are treated to rhetoric based on fear in an effort to get legislation passed. Oh well I guess being reality based and intellectually honest is a bit much to ask of any politician.
Via Greg Mankiw.