IS THE ECONOMY GOOD NEWS OR BAD? AND THE ANSWER: BOTH

Better sit down and brace yourself. There's an economic trend in progress. It's bad. Real bad. What trend? Makes no difference.

Let's take employment. "U.S. Economy Adds 400,000 Jobs Last month; Reports Spurs Fears," declaimed the New York Times a short time ago. Some economic naif might consider job growth to be good news, I know I always have. To the cognoscenti, though, it is a frightening omen. High employment might inspire the Federal Reserve to raise interest rates once again, the Times worried.

Back in March, as unemployment fell to its lowest 30-day level since the early 1970s, the Times grumped that the Fed would surely have to raise rates now, "since its efforts so far have done little to slow the economy."

Talk about a record of shame: Failure to slow the economy!

Reporting on record employment in the early stages of the new year, one TV network talking head warned, "Things may not be as rosy as they seem" because low joblessness might inspire workers to expect higher wages. You probably thought higher wages for workers was a good thing. Novice!

Later, when employment expansion seemed to be slowing somewhat, that was bad too: "March Job Growth Eased Decisively, Stirring Concern," the same New York Times warned.

One force at play in these follies is, of course, the simple desire for bad news, which in turn makes good headlines. The sentiment that disaster is a great story while normalcy is boring animates not just the media, but also Congress, where public hearings and members' statements enthusiastically embrace that day's sky-is-falling economic line.

The fact that such a line is always available reflects a central truth about economics: Almost any economic development is both good and bad good in some ways, bad in others. An expanding economy reduces unemployment, but at some point it risks inflation. A strong dollar makes consumer goods cheaper (reducing inflation), but makes American products less competitive. Not only does a change in one direction in any economic variable -- interest rates, commodity prices, trade balance -- creates its own pros and cons, it also creates the possibility that policy-makers will throw the machine into reverse, producing exactly the opposite pros and cons. (Too vigorous growth, for example, will lead the Fed to tighten the reins and risk recession.)

If you're determined to concentrate on the cons, there is always a full panoply to choose from. On the other hand, relentless emphasis on the good news in any set of economic statistics -- the general approach of whoever happens to be in the White House -- can be just as fatuous as relentless emphasis on the bad news, and somewhat more dangerous.

In case you haven't noticed, perhaps 95 percent of economic doomsday edicts turn on phrases like "could lead to," "might cause," "analysts warned of possible" -- after all, most of the hard economic news has been good for nigh on half a century now. But sometimes it makes sense to risk today's good news to avoid tomorrow's bad news. That unpleasant but necessary job is generally left to the Federal Reserve Board, and now when chairman Alan Greenspan even orders a cheeseburger, the world stops breathing in order to detect the tone of his voice and whether he'd like to go for the super size.

Federal Reserve worship is an additional factor that distinguishes economic coverage from the normal journalists' preference for bad news. The Fed is a big, impressive, mysterious organization with power and the freedom to act, making it an entity increasingly rare in Washington. A large fraction of economic gloom stories turns on speculation that this or that trend may cause the Fed to more interest rates this or that direction.

For journalists the Fed provides that useful device, the narrative. Network editors like to imagine that Washington is a sort of master control room of the type found in James Bond movies, where awesomely powerful figures sit before huge panels and radar screens, turning dials that control the course of human events. It seems that few, however sophisticated, can avoid resorting to that sort of imagery every now and then.

That image is about as realistic as the one that has the president of the United States, sometimes in cohort with the secretary of state or the secretary of defense, seated in front of a similar set of panels and radar screens, while manipulating foreign affairs.

Thanks to a number of factors that seldom see the light of day our national economy has gone along swimmingly in recent years, with numerous explanations -- almost all of them wrong offered by both the party in power and the party that wants what the other party has. If your party now occupies the White House, you quickly assign this to the fact the economy is right on track, but if your party happens to be momentarily on the outs, there is always the explanation that when your people were in charge they accomplished things that enabled today's good times to roll right in. This guarantees that whatever is happening is the result of whatever someone did sometime or other.

If the general propensity is to find the cloud for every silver lining, an occasional bizarre shaft of sunlight will pierce the gloom. My nominee for the economic headline of the year, thus far, also comes from the New York Times: "Israelis View a Battered Economy as Motivation for a Peace Effort."

Seen in that light, may all the world's nations be blessed with economic collapse.

~Jack Stapleton of Kennett is the editor of Missouri News and Editorial Service.