Tuesday, December 22, 2009

Economic Recovery Not Exactly As Advertised


The economy in the U.S. expanded in the third quarter at a slower pace than anticipated as companies curbed spending and cut inventories at an even faster pace, reductions that have set the stage for acceleration in growth.

The 2.2 percent increase in gross domestic product from July through September compares with a 2.8 percent gain previously reported by the Commerce Department in Washington.

And that 2.8% was actually down from the initial estimate of 3.5%.  My, how things look less rosy as the actual data comes in!

Ace of Spades posts this humorous treatment:

Obama's Huge Unprecedented 3.5% Growth Rate Revised Down to Equally Huge and Equally Unprecedented 2.2%

As I expected, the number was revised down. First to 2.8%, which is exactly what I thought it would be revised down to, but now again down to a mere 2.2%.

3.5% wasn't really gangbusters in the first place, but o, did they prance with it like a dog with a tennis ball in its mouth."

The NYT spins a lot here. The headline the article that 3Q is weaker than thought, but don't actually address the downward revision until the eighth paragraph.

Instead they choose to begin:

The nascent economic recovery was weaker than expected in the third quarter, the government said Tuesday, held back by slow business construction and dwindling inventories.

While the results tempered some of the enthusiasm about the speed of economic renewal, analysts still foresee steady, and stronger, growth in the fourth quarter, as exports rise and an improved jobs market encourages consumer spending.

...and then they bore you for the next five paragraphs with insdery-stuff about the housing market.

You know -- exactly how they used to play Bush's good growth numbers, pretty much, just the opposite. First, start out with some broad generalizations warning of "storm clouds on the horizons," then yap about some less grabby numbers for a while, and then note that Bush's initial 3.1% GDP quarterly growth was revised up to 3.8%, after the audience had been successfully lost.

Ah, you can always count on AoS to liven things up!  But yeah, it is pretty amazing how things go in opposite directions depending on who's in the White House, isn't it?

On a more serious note, Hot Air adds this:

The third-quarter growth looks a lot more anemic than advertised by the Obama administration, especially when one considers the gimmicks that temporarily boosted its performance.  Most troubling is Commerce's poor performance in analyzing economic conditions.  If they're so incompetent as to miss this figure by 37% (1.3 from 3.5 is slightly over 37%), then clearly they need some fresh talent.  If they got pressured into stating overly cheerful numbers, it's something else entirely.  That would be something Congress should investigate … if we had an independent Congress at all.

Which we don't.  Elections have consequences...

Anyway, now is a good time to review the
three components of GDP:

Look, you can try to cover up 10% unemployment all you want with a phony GDP number of 3.5%, you can go out there and say you saved the economy, but there are no jobs.  Obama is gratified, but by his own benchmark his economy is still failing.  Now, let me see if I can put this GDP number into context for you, 'cause it's phony.  It is a fake number.  Gross domestic product needs to be understood as the sum of three things:  consumption by consumers, investment by business, and spending by government, CIG.  Consumption, investment, spending by government.  So they say the total GDP went up 3.5%.  But was there any new consumption by consumers?  No.  Was there any new investment by business?  No.  Was there spending by government?  Yes.  That's the G.  The increase is in G, spending by government. 

So, even if the GDP numbers rose, is it really a sign of recovery (or a positive thing at all) if the only increase was the amount of federal spending?


It's smoke and mirrors.  That's all Obama's got.  He's just trying to string along as many suckers as possible, gaining control of whatever he can along the way while the suckers are still drinking the Kool-Aid.  At some point the game will be up for good, but if he's grabbed too much power for the liberal Left by that point, it won't matter since no one could do anything about it.  That's why we've got to stop the runaway train now, and blowing a hole in this kind of slanted 'news' is a big part of that effort.

There's my two cents.

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