Is there any excuse for McCain's gaffe about the economy's strength?

Commentary about business and finance.
Sept. 17 2008 11:51 AM

"The Fundamentals of Our Economy Are Strong"

Is there any excuse for McCain's gaffe?

Read more about Wall Street's ongoing crisis.

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When industrial production decreases, the economy may not be fundamentally sound.

When the nation's three major automakers, some of the largest remaining manufacturing entities, report sales declines of more than 20 percent and beg the taxpayers for loans, the economy may not be fundamentally sound.

The litany of bad news has to be weighed against good news, of course.

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When gross domestic product grows at a 3.3 percent annual rate despite weathering a series of shocks, the economy may be fundamentally sound.

When inflation shows signs of moderating and the prices of important commodities return to more reasonable levels, the economy may be fundamentally sound.

When exports rise 20 percent from year-ago levels, the economy may be fundamentally sound.

When $3.5 trillion is parked in money market mutual funds and corporations have vast piles of cash sitting on their balance sheets, it's an indication that money remains available for investment and consumption, and that the economy may be fundamentally sound.

On the whole, however, a reasonable observer would have to conclude that, on balance, the fundamentals of the U.S. economy are less than sound. And even John McCain has recognized his mistake. After a day of withering criticism, he abandoned his previous position. Now he's calling the situation "a total crisis."

With research assistance from Slate interns Sophie Gilbert and Abby Callard.

Daniel Gross is an editor and columnist at the Daily Beast.