This intervention is what Vince Reinhart means by controlling the narrative, and it was downright brilliant:
WSJ (4/18 ’09): Volcker: ‘We’re in a Great Recession’
… while the current downturn isn’t like the Great Depression of the 1930s, “we’re in a Great Recession for sure.”
In fact our situation is much, much worse than in the 1930s, but it’s going to take considerable mental work to figure this out for ourselves.
Say at Year 0 an index stands at 100, then at Year 1 it stands at 1 and at Year 2 it stands at 2. How will the MSM report this? Year 1 saw a 99 percent decline, while Year 2 saw a 100 percent resurgence. Recovery has been achieved.
Don’t laugh. The trend line of, for example, investment in commercial real estate came pretty close to that pattern and happy stories abounded. Now at Year 3 the MSM is breathlessly hoping for 2.1 and worrying about 1.9. That is, the recovery is “fragile,” but nobody doubts the reality of something called the recovery. I can confidently assert that we’re stuck with that “recovery” for the next twenty-two years or so. Therefore I think it’s a good idea to just give up and re-brand the quarter century of long depression that must follow on from the Panic of 2008 as the “Great Recovery” 
For much of yesterday Google’s top biz story was …
Reuters (2/27): Warren Buffett’s enthusiasm for U.S. could boost markets
“The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential … remains alive and effective.” / He also forecast a recovery in the housing market “within a year or so” and that “America’s best days lie ahead.”
This factitious honey-nut pabulum was headed by a (rather dated) super sized head shot of the ORACLE looking especially sincere and avuncular. It’s a picture perfect example of the communications principle that if you can win the heart, you own the ontology. This goes back to Keats’ identifying beauty (or a reasonable facsimile thereof) with truth; or equivalently, in the context of America’s positive thinking tradition, to Rhonda Byrne’s Law of Attraction. A less noticed piece from Wednesday provides an interesting contrast …
CNBC (2/23): Warnings Aplenty From the ‘Father’ of Securitization
This article didn’t have any particular narrative, just a series of disjointed concerns the interviewee would like policy-makers to consider. Few people know the name Lew Ranieri as compared to Warren Buffet, and his most significant point was buried deep in the video embed, not even making it to the text. That was Ranieri’s opinion that the US housing market is very close to losing its image as an investment vehicle. He foresees significant further declines in house prices if residential real estate were to become “just housing.” Now for those of us who realize that there’s enormous amounts of agencies being held by banks as Basel III Tier 2 capital, we can see that he’s warning of the real possibility that the load on the 10 ton truck could well shift going around the next curve.
Where the CNBC interview provoked thought, the Reuters puff imposed feelings. It’s instructive to note how appeals to emotion migrate to the front pages and the top of Google pages over appeals to the brain, even in the business section.
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John-
I guess my eyes weren’t quite open when I started reading your post this morning. As I was reading Buffett’s quote, instead of seeing “America’s best days lie ahead”, I saw “America’s best lies lie ahead”. I of course rubbed my eyes and went back and reread it.
Now that I’ve had a chance to think about it though, my version was probably the better one. A friend said to me, “Of course the government is lying to us. There would be panic in the streets if they told us the truth”. Maybe he’s correct, but I think that’s because there’s been a pattern of lying that allowed things to get to where they are.
L sent me a list awhile back of reports issued by ASU’s Jay Butler that went back through the S&L crisis in Phoenix. The housing market was horrible in those days, but it never sounded like it when you read Butler’s reports. When I heard him talk in 2006 however he kept saying how this downturn wasn’t near as bad as that one, which was awful.
I suspect that when the economy finally really improves, politicians will want to take credit for leading us out of the dark and will refer back to this as “The Greater Depression”. In the meantime, they will keep trying to portray this as a “recovery”.
The truth is available for those who are willing to look a little, but for those who just read the headlines, I’m afraid they will be more willing to believe Buffett than Volckner or Ranieri.
The MSM was been falling all over itself all weekend spreading rose petals before their favourite Sage:
NYT (2/26): “As Berkshire Improves, Buffett Sings Praises of U.S.”
http://dealbook.nytimes.com/2011/02/26/after-strong-2010-buffett-looks-to-more-deals/?src=dlbksb
Igor’s anti-spam word was “bunker,” which must be a comment on the 11AM weather forecast here
http://www.weatheroffice.gc.ca/city/pages/ns-40_metric_e.html
I’ll have to suggest “debunker” for next time
“Truth” is a four letter word for the main stream media and government. Right now that “truth” is that the US government is actually bankrupt.
John, as always your ability to blend Blake with something as base as Warren Buffett is still amazing intellectual alchemy. I am in awe, your mind works like a young Russian gymnist on the balance beam, even if nothing else does. Remember we view Warren as “that other Buffett guy” down here in the land of sunshine, and consider Warren far less authoritative on important topics.
While I agree with you that the entire concept of “recovery” is problematic these days, I still think we are far from those 1930s years, when the public policy initiative of FDR to fight deflation in agriculture was, for the first time in history, to pay folks NOT to raise grain or cattle. That policy then ran smack into the dust bowl years. With over half of all Americans employed on “the farm” at the time, and our citizens obviously then more dependant on local farm production for merely staying alive, a worse scenerio now is hard to imagine, even with the help of Fannie, Freddie and Frank. With enough policy blunders it is possible I suppose. Extended unemployment payments have already blunted the natural, and I would argue healthy, migration historically occuring from places of high unemployment to those with a more congenial labor market within the US. Alas, as long as they can get assistance, my fellow Floridians refuse to take the bus to North Dakota, despite our State’s far higher unemployment rate and higher cost of living..But on balance, even 3 years into this “crisis”, the diseases of obesity are what mostly trouble Americans recieving food assistance, not starvation.
The good news for humanity, if not to the xenophobic unionists here, is that the global Gini coefficient has fallen from .66 in the mid-1980s to around .61 in the mid-2000s, and with the BRICs expansion it has likily dropped further since. We may be in the opening act of a play that ends with pack cannibals, but I doubt it still. Great to read you again, I love the new “Doom”.
old mike -
Thanks again for the kind words. The New Doom is still very much a work in progress, but our crack admin team is working overtime to improve the user experience.
They recently installed a “search” window at the upper right of the Doom page that does a pretty efficient job of picking stuff out of the site.
Some of the navigation is broken, for example the link at the bottom to get to the second page worth of posts tagged with “Charts and Graphs”. But you can manually add to the URL to get there as follows:
http://housingdoom.com/tags/charts-and-graphs/page/2/
Also, for example, if you search on “Fannie” the “older entries” link at the bottom of the page of hits isn’t presently working, but you can add the page number to the ***inside*** of the URL to get older entries like this:
http://housingdoom.com/page/3?s=fannie
There was a programming issue with the pagination which has been resolved. In addition, we have added pagination to the search page.
Thank you John for providing the correct URLs – they made it easier.
I just successfully navigated to “page 2″ from the Doom main home page, a category, a tag, a month and a search. All seem to be working fine. Thanks!
By the way, the text “To prove you’re a person (not a spam script), type the …” is about half obscured by the “Message:” input window presently (I’m using Firefox). Seems there’s always something to keep the rabbit’s tail short!