March 5, 2008 Terkel

By no means am I an economist. I am not qualified to write this article. That’s why this post is merely a paraphrase of an article I read last night in Forbes, written by Rich Karlgaard, which said we don’t need to worry about going into a recession for three reasons.

1) This is an election year. Therefore all we hear about in the media are the bad things that candidates will improve upon if elected. The sub-prime mortgage crisis. A receding economy. Mr. Karlgaard made the point that there has been $150 billion already written off in the sub-prime mortgage mess. Standing alone, this number makes jaws drop at coffee shops nationwide. But this number, when taken into context, makes up about 1% of the $13.86 trillion that is the GDP of the United States . In other words, it doesn’t hurt the economy as much as we might be led to believe.

2) The incompetence of business journalists. Mr. Karlgaard told the truth about business journalists. He said they are mostly failed sportswriters. He went on to make a pathetic pitch about how Forbes writers are great, and then went on to say that it takes a lot to be a business journalist. You need great communication skills. The ability to ask CEO’s tough questions. Great business sense. An insatiable attitude towards research. Most of those that possess these skills go into business themselves or get a job consulting. Very few chose the low pay of a business journalist. This, Karlgaard argues, thins the pool of talent, which lowers the quality of information reported.

To support that claim, just on the way to work my carpooling accomplice informed me of how the New York Times, arguably the most respectable publication in the world, ran a front-page story on an author who produced a stunning memoir about an impoverished upbringing. A week later it was realized that the memoir turned out to be fiction after the author’s sister called in to say the stories were untrue, and that author was in fact from a suburb of Los Angeles.

3) Statistics. Tying the 70% disapproval rating of our President with the 70% of Americans who believe our economy is heading towards recession, Karlgaard said that it was too much of a coincidence to not take a look at.

Are we going into a recession? There are people much more qualified than I am to answer that question. Even the experts aren’t certain. But I thought I’d share these points with you because it defies what is now conventional thinking, serving as a reminder that there are always two sides to the coin.