Friday, February 15, 2008

The Bias of Economic Reporting

I regularly watch Kudlow & Company on CNBC. The host, Larry Kudlow, has been involved in economics and politics for decades and his show is a reflection of his experience. What I enjoy the most is his optimistic outlook that is backed up by common sense data and graphics that make sense. In my last post I discussed the alarmist mentality surrounding foreign investments in the U.S., Kudlow pointed out on tonight's show that 25% of our GDP is currently in exports. In my post I'd indicated that foreign investment in our assets isn't a bad thing and that the current trend is actually a part of the natural business cycle. I was pleased to hear Kudlow reinforce that. Kudlow indicated that while the building industries and retail are taking a beating right now.... exports, railroads, and "smokestack" industries are gaining ground. The ebb and flow. Most news sources are discussing the economy as if the sky is falling yet the most dependable and frequently used economic indicators prove otherwise. The current state of the economy is one of stagnation. A product of the economy catching up to the anti-inflationary actions taken by the Fed. Kudlow suggests that the first round of fed cuts late last year are just now affecting the market. If Kudlow (and his panel) are correct, we can expect an economic jump start within the coming months and leading out of the Spring. The bottom line here is that we as consumers should seek multiple sources of information to base our economic decisions. Some news sources present information in a biased manner. At the end of the day it is wise to remember that television news still has a responsibility to be entertaining. Sometimes the effort leads to sensationalism. Kudlow is one of the least sensational (and probably least viewed), but his fact based insight into the economy is reassuring and very informative. BTW, the best book I've read lately that really describes the business cycle is "Mad Money - Sane Investing in an Insane World" by Jim Cramer. Give Kudlow & Company a chance on CNBC at 7pm, you'll enjoy it. I'll end with a Kudlow quote, "Kudlow and Company aims to be right on business, right on America, and right on the Money. We believe that free market capitalism is the best path to prosperity."

1 comment:

JJ said...

C'mon someone leave me a comment! This blogging stuff isn't easy and I could use some feedback.