Are We In A Depression Or Am I Just Depressed?

       Sunday, September 15, 2008, I was reading the Washington Post and found an opinion entitled, “Quit Doling Out That Bad Economy Line”. It was written by Donald Luskin. Basically, Mr. Luskin says America’s economy is fine and Barack Obama is wrong when he says we are headed for a Depression. The American economy is nothing like it was in the Great Depression, Luskin contends, and he wants people to quit saying that the American economy is bad!

      Luskin admits that he is an advisor to John McCain, but says that has nothing to do with his analysis and criticism of Obama, because McCain doesn‘t listen to him (?).

      Actually, I do not believe everything I read, however, I do read just about anything, including Mr. Luskin’s opinion piece. Being a Pragmatist, I always consider the source of the information and whether or not it has been reliable in the past.  Also, I am always intrigued by the credentials of a writer, credentials that qualifies them to be published in the Washington Post and me not to be published there.

      Mr. Luskin in the Chief Investment Officer of a Consulting Firm; I can only assume that he makes a living telling other people how to spend their money. From this, I gather that if America is in a Depression and no one has money to spend, Mr. Luskin would be out of work. Therefore, it appears to me that Luskin has a conflict of interest relative to his analysis of whether or not America is in a Depression; it would appear to be to his economic advantage to convince the American people that the economy is fine and we are indeed not headed for a Depression.

      My own research of the source indicates that Mr. Luskin was born in 1954, and all that he knows about the Great Depression of 1930, is what he has read about it (and I have no way of knowing the integrity of Mr. Luskin’s sources). My own expertise about the Great Depression comes from having lived through it. Though I was young at the time, youth can understand hunger and the angst of families who are out of work and their home is being foreclosed. As a child you can vividly experience the lack of material things and you can also recognize that it is relative unimportant to your own life, if everyone else that you know must do without the same things that are lacking in your life.

      Reality, according to Luskin, is that the US economy grew at an annual rate of 3.3 percent in the last quarter. Unemployment figures are up, Luskin admits but “None of this, however, is the cause for depression . . .”

     With all due respects, whether unemployment is the cause or effect of depression, if you just happen to be the person unemployed with no potential for employment to support your family and your home is being foreclosed, as far as those unemployed workers are concerned, we in a depression.

     Mr. Luskin condemns and belittles Barack Obama’s contention that the percentage of home foreclosures today is the greatest since the Great Depression because “there is no consistent data on foreclosures going all the way back to the Depression”. Mr. Luskin’s nasty criticism of Sen. Obama’s statement does not ring true to me, when I read that over one million homes in America are in foreclosure and I discover that my neighbors are moving out the their houses and leaving them because they owe more for their home than it is worth. There is a sinking feeling in my stomach, when I wonder if perhaps my neighbors were reading Mr. Luskin’s economic advice when they purchased their homes.

     Monday, the day after Mr. Luskin’s opinion appeared in the Washington Post, the headlines of the newspaper read, “Markets Tumble on Wall Street Shakeup”.

     “Stocks plunge in early trading on Lehman Brothers bankruptcy and takeover of Merrill Lynch: repercussions are felt around the world.” Normally, I consider the Washington Post news a reliable source; they have a long record of being right. Personally, I feel a Depression coming on.

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