Perceptions About the Economy: What are People Thinking?

This weekend I watched my favorite groups of business news programs on Fox News on Saturday. During the program I was astonished to hear that a recent poll showed that six out of ten Americans believe we are worse off now economically than we were five years ago.

Five years ago? Are we talking about the summer of 2002? Give me a break. At that time:

* We were still recovering from the effects of September 11th as people were emotionally and economically devastated.

* The Federal Reserve were still cutting interest rates in order to spur confidence in the economy.

* Headlines in publications said things like "Terrorist Attacks, Interest-Rate Cuts, Recession Set Stage for Interesting 2007."

* Unemployment rates were roughly an entire percent point higher than it is today (4.8 percent today versus 5.7 in 2002, approximately 16 percent higher than today).

So why does such a negative view of the economy exists? Because the media makes a living off of bad news, which is a phenomenon I have discussed here, here, and else where. With all of the criticisms people can have for George Bush, a weak economy isn't one of them. But that won't matter when the elections come in 2008, because voters won't be told about the real economy that exists.