Fear Factor

While I might quibble with a few of his points, I think Larry Kudlow is generally right that fears of economic catastrophe right now are overblown. He’s especially right when he says that Democrats have "adopted pessimism as their national pastime, and want us to believe we’re already in a long and deep recession."

Now, no matter what opinion polls say, it’s not entirely clear that we actually are in recession. It’s not something that’s decided by popular vote. There’s a technical definition — two consecutive quarters of negative growth — and right now, we have nothing definitively indicating that such a downturn has indeed occurred. That’s not to deny the possibility of a recession entirely. But the CBO, for example, in their most recent economic forecast, put it this way: "Although CBO’s projections do not show the slowdown in economic growth becoming severe enough to meet the economic definition of recession, the risk of a recession remains elevated." So there’s cause for concern; but for the most part, the country need not have a heart attack.

Additionally, I think Kudlow’s idea about the Democrats having adopted an attitude of pessimism is exactly right. And it’s worth remembering that they do so in large part because their policies require it. They’re selling policies that rely on the notion that free markets, individual responsibility, and choice don’t work, so stoking economic fears isn’t just a matter of mood or opinion — it benefits them politically. The liberal agenda plays on economic fears, because, in large part, it’s those fears that that keep interest in anti-market policies afloat.