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Floyd Norris, NYT financial correspondent, asks (economically): Why so glum?

I’m back, thinking about the blog and various sundries in life.

What caught my attention on this Thursday was Floyd Norris’ column in The New York Times. The company gave it prime online real estate, at least when I saw it.

His thesis, which has caveats, revolves around more hiring, better consumer spending and the fact that the recession is, most likely, over in the country.

As he wrote:

Why is good news being received with such doubt? Why is ‘new normal’ the currently popular economic phrase, signifying that growth will be subpar for an extended period, and that the old normal is no longer something to be expected? It is possible, of course, that I am wrong and the prevalent pessimism is correct.

Or as he described it on his blog:

My Friday column, arguing that the economy is doing much better than most of the commentators say it is, was posted this afternoon, and has generated more e-mail than I am used to getting.

I’ve covered meetings with economists and understand the trends they follow.

What I think Norris overlooks, though, is the huge gap between the economic data statisticians use to gauge financial well being and the view from the streets, whether that perspective is urban, suburban or rural.

As in: Many people, I would argue, judge the economy on how they’re doing financially and the experiences of their neighbors, relatives, friends and people they meet.

So, when Norris talks about the recession – in pure technical terms – as being over, does he realize that many people in the country cringe because adequate hiring to bring the unemployed back into the working ranks often lags behind?

As in: Optimism is good and always needed. But optimism with blinders can shield you from reality.

One interesting note: A copy editor – or someone – has changed the online headline.

The original, which still can be seen on the top of your browser: “Why So Glum? History Points to a Strong Recovery.”

The revised headline in the story: “Why So Glum? History Points to a Recovery.”

Actually, by definition, recoveries always take place after recessions. If they don’t, then what you have is pure failure. 

So, this edit on the headline doesn’t make sense because pointing to history really has nothing to do with an economic recovery. History, though, can point to a strong recovery.

It looks like the revised headline is now: “Why So Glum? Numbers Point To a Recovery.”

Norris’ also misses the fact that Washington state economists pointed out late last year during their annual meeting – that all recessions are unique.

I have seen more job listings in recent months. Of course, that is a good thing.

But when I talk with people about how their jobs are going – or their job searches – I hear news that is less than enthusiastic.

Certainly, there are some employees in the country who have not been touched by the recession in a dramatic way. I’m happy for them.

But the story is different for millions of unemployed or underemployed.

Banks are under pressure from federal regulators not to loan dollars out as they once did during the go-go halcyon days of a few years ago.

You know, when irrational exuberance existed and many people thought that real estate values always increased (or seemed to do so) at high percentages.

A review of news articles also shows that, well, things continue to be tough.

Commercial buildings remain empty, including downtown Seattle’s Columbia Tower whose owners have missed a mortgage payment, The Seattle Times reported.

In the Seattle area, there’s the possibility of a strike by garbage drivers – and as KOMO/4 reported, about 1,600 people applied online to replace those drivers should they leave their jobs.

Norris asks why the White House has not yet taken on a more rosy view of the economic numbers.

While he took into account some partisan differences in his piece, he failed to hit the big target coming up: The mid-term elections.

If the White House plays up the economic data saying that the recession has officially ended, but average people are still struggling with mortgages, health bills or getting loans, what do you think is going to be the political narrative in the weeks before November?

These days, people are waiting to see what the next week or month brings.

In Norris’ blog, he writes about how he’s been receiving more email about this topic than he usually does. It’s easy to see why.

The view from the streets (the ordinary ones, of course) is important to keep in mind.

Uncertainty remains for many people. Many of us remember the words of U.S. officials – whose words sounded nice at the time but ring hollow now.

Norris used the example of Federal Reserve Chairman Ben Bernanke hailing the subprime mortgage crisis as “contained.”

I think many people remember when the idea that the economy’s fundamentals are “strong” prompted sharp questions.

Here’s another example: After I left my previous job in March 2009, I attended a nonprofit housing seminar on how to avoid foreclosure.

It’s safe to say that I was not in that situation. But I wanted to know the various possibilities of what might surface in the months after someone leaves a full-time job.

A very-knowledgeable woman, who once worked at an East Coast bank, ran the seminar. She gave helpful tips, prodded us to think and offered helpful tips.

One interesting note: Had I actually been a working journalist at that time, I would have been barred from attending the meeting.

She asked whether people were behind in their mortgages. Hands went up.

Some people who attended once worked for the banking and financial industry.

Another thing that surprised me: One guy, who raised his hand when asked whether he was behind on his mortgage, fell asleep during the presentation.

The teacher, who used humor to convey ideas, spotted him and said something to the extent of: “I told you guys not to sleep in my class!”

By the way: Falling behind on your mortgage and going to sleep in a seminar on how to avoid foreclosure ought to be avoided, if possible.

The meeting also was helpful because trying to get clarity, at that time, from banks and the federal government on mortgage modification options was elusive.

I sincerely hope the people from that meeting are doing well these days.

My point in all of this: The view from the ground can be vastly different than the data – which is often weeks or months old – that some economists or statisticians rely on for a big-picture analytical fly-over.

Those conclusions can get picked up by national journalists, who write or talk about them but soon encounter sharp questions from ordinary people.

Norris also neglects to take into account – at least in a significant way – that hiring lags behind the end of a recession.

In other words, people are glum because adequate hiring at good wages has not arrived. That is how many people view economic health.

I understand the metrics used in determining economic health or gross domestic product, including goods and services produced during a certain period.

But for many people, it’s the view and fact as to whether their neighbors or friends are being hired and whether there’s enough work when they are employed.

The flow of capital in a responsible way is another indicator that ordinary people use.

Norris might have been on better footing, journalistically at least, had he waited a few months after a more confident view from the ground had floated up to the data counters.

Mainstream journalists once overlooked the power of new technologies and how they would transform the information industry and open doors for more people to enter the content pool.

In a similar way, Norris’ piece shows that a gap in understanding the glum factor with the U.S. economy exists.