The Future Looks Terrible, the Present Looks Good

...which is a direct result of the MSM being a conveyer of doom and gloom.

Carpe Diem has a post today that shows this graph.


It's the Intrade betting line on second quarter Gross Domestic Product (GDP). 110 days ago, the dominant bet was that it would be shrinking. Now the dominant bet is that it will be growing. When all you get is bad news, the distant future almost always looks worse than it really turns out to be. Economist, author, actor, bon vivant and all around good guy Ben Stein provided a nice summary of the situation. Here's a tidbit.

But how bad is it, really? The economy isn’t at its best. Oil prices are painfully high, foreclosures are really hurtfully high, job growth in many areas is sluggish or worse, and a sector of the credit markets is extremely weak. But over all, it’s not all that bad.

According to the June 2008 economic indicators from the White House Council of Economic Advisers, here is where we stood at the end of June:

There has not been one down year for the G.D.P. in this decade. There has not been one down quarter, in inflation-adjusted terms, since 2001.

It's worth reading the whole thing. A brief syunopsis: the economy is so huge that the numbers bruted about by the MSM may seem big, but in terms of the overall economy, they're not. It's an issue of scale. Here's the numbers:

The size of the overall US economy:
$14,000,000,000,000

If we suffered defaults on 2% of all mortgages, we would lose:
$120,000,000,000

Removing some of the zeros so it makes some sense to an individual, it's like losing $1200 when you earn $140,000. I wouldn't want to do that on a regular basis, but it's not that bad of a loss.

The MSM tells you we're doomed and when you look far enough into the future, you think you see a trainwreck. The politicians react to this and rush about suggesting this stimulus package or that bailout, all of it using borrowed money. When the future is close enough to reliably predict it, things don't look so bad.