From the “absurd and nutty file”

Of all the statistics pouring into the White House every day, top economic adviser Larry Summers highlighted one Friday to make his case that the economic free-fall has ended.

The number of people searching for the term “economic depression” on Google is down to normal levels, Summers said.

Searches for the term were up four-fold when the recession deepened in the earlier part of the year, and the recent shift goes to show consumer confidence is higher, Summers told the Peterson Institute for International Economics.

Summers continued the administration’s push-back against critics of President Barack Obama’s handling of the recession, defending the economic stimulus package against Republicans who have tried to paint the program as a failure because it hasn’t stemmed the unemployment rate. [...]

I argue the situation that searches for the terms ‘economic depression’ is a fallacy for a gauge of the real health of the American citizen and of the economy.

It is human nature to desire knowledge when one is scared or confused by any situation, be it swine flu, nuclear war, or economic disasters. Pick any topic and at the on set of pain the desire to understand it is peaked. Then comes a period of complacency and acceptance of what caused that pain.

The number of individuals in the United States facing economic hardship of their own is still increasing, and by some measures is actually increasing rapidly as in the rapid rise in foreclosures and credit card default rates which stand at record levels.

We also know that the unemployment situation measurement (U-6) which measures people working at distressed levels and/or hardships (those working part time for economic reasons) is now nearly 17% and probably much closer to 25% based on my own ‘open eyes’. This means that more and more people are being cut from full time to part time and the number of individuals having to take on additional jobs to make enough money to pay the bills is increasing significantly.

For Larry Summers to claim that the number of Google searches gives him insight into how well his economic team is doing is actually an insult to those in the ‘real world’ struggling who may not even have time anymore to sit on Google and do searches, or to those who have had to cut their cable/Internet service to cut expenses, or to those who are holding yard sales all over America selling everything that is not nailed down to raise more money.

Their are a slew of metrics one can use to measure and/or gauge just about any condition in life. Sometimes, however it requires one to apply logic and the human mind in order to process the data to arrive at a rational interpretation, something we call ‘independent thought‘ which appears to be deteriorating in this world of ours.

The Internet age has brought to the human species a whole new set of metrics in order to measure many snapshots of life at any given moment. As a person who works extensively in public safety I can attest to the public sentiment right now that the H1N1 (swine flu) has become pushed back in the human mind to the place where worrying about next weeks soccer match for little Johnny or the spot in the mind where one keeps thoughts about what they will have for lunch the next day. Even while the H1N1 is still being projected by those in the medical community as being a full blown pandemic and the possibility that the vaccine may not be effective (or even ready in time) for the wave 2 to arrive in the fall and winter.

We have become a people of ’5 minute’ attention spans. Tell me everything I need to know in 5 minutes while I’m getting the kids ready for school because no one wants to spend (or can’t spend) any more time than that to understand what is happening in the world. People are concerned about what the 5 minute headlines are for that day only.

Complacency is another human characteristic that can’t be accurately gauged for a meaningful conclusion of a situation or event. As everybody is busy trying to make ends meet and raise a family there is simply no time for allocating too many brain neurons to worry about something for too long. We watch our 5 minute podcast of the news, we may be scared about something for a little while and then take it upon ourselves to learn more about it… but it quickly turns to being complacent about it and then it falls back to the  corners of the mind where next weeks food shopping list lays.

Just because someone may have a short attention span and has become quickly complacent of a situation does not mean it has improved. Actually, history has shown us that complacency has been one of the worst human traits we have. It is what puts people into dangerous situations thinking that something won’t affect them.

What I’m attempting to discuss here goes well beyond stock market analysis. But, if we are to apply metrics of Internet searches to economic recovery then we should also understand a little about human behavior before making the claim that Larry Summers is attempting to make that the economy is improving simply based on a computer generated metric of Google searches. It requires human thought to analyze it and put it into context.

Most human beings have an infinite capacity for taking things for granted

– Aldous Huxley 1894-1963, English novelist

.

Recent Posts:

• Taxpayers to the Rescue of Afghanistan Banking Crisis?
• Economic Data and Earnings Schedule for September 2 2010
• Christina Romer Makes a Final Recommendation Before Leaving To Teach Keynesian Economics
• Homebuilder Hovnanian (HOV) Reports Dismal Quarter
• Auto Sales Data for August 2010
• Stock Market Rewind – September 1, 2010