Most of you know what happened to former Senator Phil Gramm when he said that the nation was in a "mental recession". In case you weren't paying attention, shortly thereafter he resigned as a co-chairman of the McCain campaign.

There is no doubt that parts of the economy are hurting, not least our home values. But despite the political flak he took, Gramm had a serious point.

Reporting bad economic news (and not reporting good news) is the economic equivalent of "if it bleeds, it leads."

My friend Brian Wesbury says that hearing we're in or near recession can not cause recession. I'm less sanguine, but Brian's far smarter than I am, so I'll take his word for it.

However, moving away from the pure economics, I believe that mainstream media intentionally reports economic news in as bad a light as possible in order to help Democrats. It will be very interesting to see how economic reporting by the NY Times, Washington Post, and the major broadcast news networks changes after the election. I guarantee it will change much more rapidly than the economy changes.

So as we think about whether we're in a "mental recession" or a real one, I would offer you for your intellectual food for the day the following article by the chief economist of the Federal Reserve Bank of Dallas and his senior economics writer.

The article is titled with the rhetorical question "How Are We Doing?" The authors suggest that the answer is basically "Much better than the media would have us believe, especially in a long-term view."

Please see "How Are We Doing?", The American, July/August Issue
http://www.american.com/archive/2008/july-august-magazine-contents/how-are-we-doing