The New York Times editorial board saw nothing but economic gloom past, present and future in its outlook for 2008.
A January 2 Times editorial was not at all optimistic about the new year and the economy, mocking President George W. Bush and foretelling doom.
“As 2008 begins, house prices are still skidding, bank losses are still mounting, oil is again flirting with $100 a barrel and consumers are buying less as prices rise,” the editorial said. “To many, the wheels appear to be coming off the economy. To others, including President Bush and his aides, the economy is fundamentally sound and resilient.”
The Times accused Bush of being in denial about the pending disaster of the U.S. economy.
“Given that record, it is no surprise that Mr. Bush is now refusing to acknowledge the seriousness of the problems he has helped create. Americans don’t need more denial,” the editorial said. “They need an unvarnished appraisal of the nation’s economy – including the politics and ideology that has driven it to this point.”
The Times dismissed more than four straight years of job growth, low unemployment and strong economic growth. For an “unvarnished appraisal,” readers might turn to economists, as opposed to journalists and politicians.
Brian Wesbury and Robert Stein, economists with First Trust Advisors L.P., issued an optimistic outlook December 31, citing healthy productivity as an underlying advantage for the U.S. economy.
In the Times editorial, the board mentioned a slowdown but didn’t use the textbook definition of a recession to indicate “the wheels appear to be coming off the economy,” which would be two consecutive quarters of negative economic growth as measured by gross domestic product (GDP).
The front page of January 2 Times Business section was not as harsh, but assessed a slowdown as a possibility.
“But conditions suggesting a slowdown have been taking shape: The labor market cooled last year, creating new jobs at roughly half the rate of 2006,” Peter S. Goodman and Vikas Bajaj wrote. “Wages grew slower than inflation during the last two months. Early indications suggest Americans were relatively thrifty during the holiday season.”
Other print business media admitted there are risks out there but were not as pessimistic that the economy is heading toward inevitable destruction.
“With no bottom in sight for housing and a credit crunch continuing to grip mortgages and financial markets, the risks of a U.S. recession in 2008 have definitely risen,” a front page article in the January 2 Investor’s Business Daily said. “But most economists still expect the expansion to at least limp along for a seventh straight year.”
The January 2 USA Today predicted the five-year bull market on Wall Street would live on for a sixth year in 2008. An article by Adam Shell suggested the stock markets have already priced in the bad news and the only way to go is up. Other reasons given to be upbeat: relief from central bankers on interest rates, foreign capital investment, the strength of other economies in the world, historical economic cycle data, and an election year.
An article by Scott Patterson in the January 2 Wall Street Journal was also optimistic, predicting five things to look for in 2008:
1. Stocks rally.
2. The housing market stabilizes.
3. Consumer spending remains solid.
4. Corporate profits accelerate.
5. Economic growth accelerates.
“In the third quarter of 2007, gross domestic product, a measure of the nation's total output, rose 4.9%, its strongest pace of growth in four years,” Patterson wrote. “After an expected fourth-quarter hiccup, the economy could pick up the pace again, helped by robust growth in exports.”
