Case in point. From today's Mid-week briefing:
Former Labor Secretary Robert Reich says the problem with the economy isn't consumers living beyond their means but that their "means didn't keep up with what the growing economy was capable of producing at or near full-employment." Translation: Pay no attention to the growing national and personal debt. Spend! Spend! Spend! Mr. Reich, you're nuts.And this is Reich's original. And this is how it begins:
Today’s most important economic news: U.S. household debt fell for the seventh straight quarter in the first three months of 2010 as Americans continued to respond to the recession’s fallout.Yea, pay no attention to national and personal debt. It's all in there. Right.
But like all economic news, its significance depends on where you’re standing — whether you’re a typical American or someone at the top.
The common wisdom is that excessive debt-financed spending was one of the causes of the recent recession, so the news that household debt is dropping is being celebrated by business cheerleaders as reason to believe we’re on the mend.
And then Reich goes on to debunk that "common wisdom."
Personal debt rose, he says, because the only way for a "typical American" to keep up with the demands of the economy, at a time when median income was dropping, was to borrow. That "keeping up with the demands of the economy part" is what translates into "Spend! Spend! Spend!" by the way. Note, however, that it's part of the problem.
The bad news is about consumers paring back their debt and reducing personal spending - 70% of the economy is consumer spending, he says.
So now we get to the braintrust's source:
It’s also a bad omen for the future. The cheerleaders are saying that for too long American consumers lived beyond their means, so the retrenchment in consumer spending is good for the long-term health of the economy. Wrong again. The problem wasn’t that consumers lived beyond their means. It was that their means didn’t keep up with what the growing economy was capable of producing at or near full-employment. A larger and larger share of total income went to people at the top.So anyone want to explain to me how the braintrust got from this to their assessment of Reich?
Other than they're completely wingnut crazie.