The statistical mirage of an economy on-the-mend continues to grow, this time with a pseudo-statistic from the Institute for Supply Management. The ISM reported yesterday that its non-manufacturing index for April rose to 52.0, from 49.6 in March. The usual bunch of dartboard-trained 'economists' supposedly had 'expected' a much smaller increase, to 49.8, so the jump to 52.0 was being heralded as relatively good news ' news suggesting that perhaps the most dire economic scenarios may not be playing out as imagined. However, we would suggest that readers take these numbers with a grain of salt, since the non-manufacturing sector, particularly banking and real estate, are not what they seem to be. Consider this: How many bankers or realtors do you know who have gone on the dole? We could count perhaps two dozen realtors as personal friends, and although most of them would tell you that business has been pretty tough, as far as we know, none has filed for unemployment compensation. To the contrary, rather than throwing in the towel, they all seem to be working twice as hard to make half as much as they did in boom times. That's undoubtedly true for many others who until recently formed the backbone of American prosperity: hedge fund managers, financial planners, mortgage brokers and consultants of all stripes. Beating the Draw So how bad would things have to get before the $150k-a-year consultant starts weighing the pros and cons of giving up? You can do the math yourself, since weekly unemployment checks max out at around $350. The decision itself would depend on the individual, but one imagines that the economy would have to be in ruins before a guy who was making $150k a year comes to believe he can't beat a $1,400-a-month draw. Unfortunately, there are no
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