Our Christmas morning was leavened with some good cheer in the form of a New York Times editorial on the economy. The point seemed to be that the economy now isn’t as good as it was in the late 1990s. “Corporate profits have been phenomenal during the recovery, but are mostly being used to enrich shareholders, not to create jobs and pay higher wages – or to lay the foundation for robust employment by investing in plants and equipment,” the Times whines. The Times claims that “during the current recovery, wages have lagged inflation by 0.3 percent for 80 percent of the work force, generally defined as non-managers. To add insult to injury, the decline has occurred even as Americans have set records for productivity. That means Americans are working harder, but taking home less.” The newspaper goes on to complain that “people are gloomy,” and concludes, “would they be so gloomy if they were making some real money?”

We speak of this as “good cheer” because it brought a smile to our face and a Christmas chuckle to our lips. First, because a lot of that job-creating in the late 1990s that the Times is so nostalgic for was a bubble that popped when some of the Internet companies went out of business and when the Bush Justice Department started enforcing the law against officials at companies like WorldCom and Enron. Second, because it takes a certain audacity and skill to write a gloomy editorial about the fact that shareholders are being enriched. If the stock market and corporate profits were plummeting, do you think the Times would be writing upbeat editorials? Not as long as President Bush is still in office. Nope, you can look forward to gloom about the economy from the Times editorialists all the way through 2008, no matter what the underlying economic news is.

The key point that needs to be made in respect of the economy today is that America has become an ownership society, in which more than half of American households own stocks, either directly or through their pension funds or mutual funds. Enriching the shareholders, in other words, the concept that the Times so scorns, is enriching most of us with wealth that we then use to create jobs or buy things, which creates more jobs. It’s not a zero sum game between enriching shareholders and helping ordinary Americans – the ordinary Americans are the shareholders. Which is why they aren’t as gloomy as the Times imagines. There are ways to expand the pool of shareholders – by allowing private investment accounts as part of Social Security, for instance. But the Times stands athwart that change. And the paper backs onerous laws, like Sarbanes-Oxley, that have the effect of keeping more companies in private hands, discouraging them from going public. That also acts to shrink the pool of shareholders.

If the Times editorialists want to find some non-gloomy Americans, they can try reading their own paper, which featured a Christmas article reporting that “back-to-back holiday vacations – half the time in a cold climate, half in a warm one – are not such an unusual undertaking these days among the affluent and restless. Given that the year-end vacation period for private schools is often two weeks, an endless stretch in the same resort for some families, many people have been squeezing two trips into that window: one week in St. Barts, if you please, and a second in Aspen.” Gloomy, indeed.