January 31, 2007

4th Quarter ‘Advance’ GDP Growth (3.5%) Beats Original Expectations, Then Beats Upwardly Revised Expectations

Filed under: Economy,Taxes & Government — Tom @ 2:03 pm

Funny how that keeps happening.

Geez, do I really need to comment on presumptively negative this report by the Associated Press on 4th quarter GDP is (BEA announcement here)?

I’m guessing that the unbylined report is from my AP “buddy” Martin “Crummy Economy” Crutsinger (previous discussions of his handiwork are here, here, and here), and that he had this negative adjective-laced report already drafted last night (Update — It’s by a new name to me, Jeannine Aversa):

The economy snapped out of a sluggish spell and grew at a faster-than-expected 3.5 percent pace in the final quarter of last year as consumers ratcheted up spending despite a painful housing slump.

The fresh snapshot of business activity, released by the Commerce Department Wednesday, underscored the resilience of the economy; it has managed to keep on moving despite the ill effects of the residential real-estate bust and an ailing automotive sector.

The economy’s performance in the October-to-December quarter, which followed two quarters of rather listless activity, exceeded analysts’ forecasts for a 3 percent growth rate.

The economy opened 2006 on a strong note, growing at a 5.6 percent pace, the fastest spurt in 2 1/2 years. But it lost steam during the spring and late summer. It grew at a 2.6 percent pace in the second quarter and then a weaker 2 percent pace in the third quarter. The fourth-quarter’s rebound ended the year on a positive note.

For all of 2006, the gross domestic product (GDP) increased by 3.4 percent. That was an improvement from a 3.2 percent showing in 2005 and the strongest showing in two years.

Just a few weeks ago, the “experts” were predicting GDP would come in at about 2.0%. Then they looked at the Christmas retail and the December ISM manufacturing and non-manufacturing reports and scrambled to up their estimates to 3.0% or so. Today’s announcement even beats the revisions, and I believe (crossing fingers) that February and March adjustments to GDP (technically known as “preliminary” and “final” — the first release is referred to as “advance”) will end up moving it closer to 4.0%.

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UPDATE: Here are the last 30 years of GDP growth for context (years better than 2006 are in bold), and which party, based on which president’s budget was in effect during most of the year involved, is “responsible” for that year’s result (you can see these results by going to this BEA link and selecting the appropriate date range and the “annual” option):

GDP1977to2006withResp

GDP1977to2005BWvs2006

To be clear on the party ID, it has to do with whose budget was in effect during most of the year involved. So Ford’s last budget was in effect during most of Carter’s first year (1977; actually through Sept. 30 of that year), Carter’s last budget during Reagan’s first year (1981), Bush 41′s last budget during Clinton’s first year (1993), and Clinton’s last budget during Bush 43′s first year (2001).

To explain in words what the Better/Worse comparison means — 15 years of the 29 years leading up to 2006 had GDP growth greater than 2006′s preliminary 3.4%; Republican administration-passed budgets were in effect during 8 of those 15 years. 13 of the past 29 years had lower GDP growth; GOP admin-passed budgets were in place during 8 of those 13 years.

Carnival Barking (013107)

Filed under: News from Other Sites — Tom @ 1:45 pm

Newshound’s 59th on Ohio Politics is here (this was done in advance; so I sure hope it’s there! it’s still pending as of 2 PM 8 PM 9PM — now it’s up!!).

Boring Made Dull’s 31st on Econ and Social Policy is here.

Five Suburbia Myths on the Environment and Transportation

Filed under: Economy,Environment,Taxes & Government — Tom @ 9:48 am

Read ‘em and reap (link may require registration; HT Instapundit):

1. Americans are addicted to driving.

Actually, Americans aren’t addicted to their cars any more than office workers are addicted to their computers.

….. Some claim that Europeans have developed an enlightened alternative. Americans return from London and Paris and tell their friends that everyone gets around by transit. But tourists tend to confine themselves to the central cities. Europeans may enjoy top-notch transit and endure gasoline that costs $5 per gallon, but in fact they don’t drive much less than we do. In the United States, automobiles account for about 88 percent of travel. In Europe, the figure is about 78 percent. And Europeans are gaining on us.

2. Public transit can reduce traffic congestion.

….. We have to be realistic about what transit can accomplish. Suppose we could not only reverse transit’s long slide but also triple the size of the nation’s transit system and fill it with riders. Transportation guru Anthony Downs of the Brookings Institution notes that this enormous feat would be “extremely costly” and, even if it could be done, would not “notably reduce” rush-hour congestion, primarily because transit would continue to account for only a small percentage of commuting trips.

3. We can cut air pollution only if we stop driving.

Polls often show that Americans think that air quality is deteriorating. Yet air is getting much cleaner.

4. We’re paving over America.

How much of the United States is developed? Twenty-five percent? Fifty? Seventy-five? How about 5.4 percent? That’s the Census Bureau’s figure. And even much of that is not exactly crowded: The bureau says that an area is “developed” when it has 30 or more people per square mile.

5. We can’t deal with global warming unless we stop driving.

What should be done about global warming? The Kyoto Protocol seeks to get the world to agree to burn less fossil fuel and emit less carbon dioxide, and much of that involves driving less. But even disregarding the treaty’s economic costs, Kyoto’s environmental impact would be slight. Tom M.L. Wigley, chief scientist at the U.S. Center for Atmospheric Research, calculates that even if every nation met its obligation to reduce greenhouse gas, the Earth would be only .07 degrees centigrade cooler by 2050.

* * * * *

.07 degrees centrigrade (.13 Fahrenheit) after decades of the draconian measures envisioned by Kyoto? Please — Certain politicians stifling themselves for a few years would accomplish THAT.

He’s Tired, and Has a Right to Be

Filed under: Taxes & Government,US & Allied Military — Tom @ 6:18 am

God help us if he and those like him ever decide they’re too tired, or that it’s not worth it, to continue.

Line of the Day: WSJ on Why Supply-Side Econ Works

Filed under: Economy,Taxes & Government — Tom @ 6:13 am

In a subscription-only editorial smackdown of Virginia Senator James Webb:

Class warriors like Mr. Webb often forget that the capital gains tax is voluntary. Investors can defer paying the tax for years by holding on to their stock. This creates what is called the “lock-in effect” that deters an efficient allocation of investment capital.

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- Jan. 13, 2006 — Voodoo Schmoodoo

Great News, But I Doubt That It’s the Last Word

Filed under: Business Moves,Taxes & Government — Tom @ 6:08 am

From All Headline News (HT The Liberty Papers):

Santa Clara, CA (AHN)-In a landmark ruling in favor of bloggers and cyber journalists, a Santa Clara County Court defended the First Amendment rights of online journalists to protect their confidential sources, effectively giving web journalists the same protections afforded to traditional print journalists.

Apple Inc., had issued subpoenas to online tech journalists, including the publisher of AppleInsider.com and PowerPage.org, over reports the company claimed “violated California state trade secret law” which divulged so-called confidential information about not-yet released Apple products. Apple claimed the journalists were not entitled to First Amendment protections similar to those afforded to their print counterparts.

However, a California court disagreed, ruling against Apple and in favor of the defendants, who were represented by legal counsel from The Electronic Frontier Foundation (EFF). Apple was ordered to pay all legal costs associated with the defense, including a 2.2 times multiplier of the actual fees, bringing the total to about $700,000.

The ruling was hailed by web journalists and EFF staff members as a legal victory in the battle to defend and protect the rights of online journalists.

Great news, but this was a county court, so hold the end zone dance. I will be very surprised if Apple doesn’t appeal.

British GDP Growth, In Context

Filed under: Economy,Taxes & Government — Tom @ 6:03 am

BBC reported last week that the UK’s economic growth for the fourth quarter of 2006 was 0.8%. That is a very good quarter, as European countries don’t annualize each quarterly result — so the 0.8% would be the equivalent of the US reporting 3.2% (annualized) quarterly GDP growth.

That the best quarter the Brits have had in 2-1/2 years. The US has had several quarters better than 3% during that time, and an overall growth rate of well over 3%.

Compared to much of old Europe, though, the UK is a star, routinely beating out France and Germany in economic growth. Each has struggled in recent years to get above the 2% annual growth threshold, though it appears that 2006 will be somewhat better than that in both countries.

Today’s GDP report for the 4th quarter in the US will be released this morning. While the UK is gushing over 3%, we’ll be only mildly impressed at our number, which is expected to be about the same or slightly better.

Positivity: Dog Reunites with Family after Six Years

Filed under: Positivity — Tom @ 5:58 am

From St. Louis:

1/28/07-ST. LOUIS

Cujo was a frisky 7-year-old when he sneaked out of his owners’ south St. Louis yard in July 2000. Now, thinner and grayer and with a tale that would be fascinating if only he could tell it, the golden retriever is back with the Barczewski family.

“It’s a miracle,” Noreen Barczewski, 41, said at Friday’s reunion. “We found him!”

Six years and a side trip to Columbia can do a lot to a dog, but it was unmistakably Cujo. There was the heart-shaped patch of white on his forehead, the white fur on his toes, his manner of greeting people by rubbing against them cat-style.

Cujo’s homecoming was orchestrated by Dirk’s Fund, a golden retriever rescue group that has found homes for more than 900 dogs in the past decade.

After slipping away from home, Cujo somehow ended up 120 miles in Columbia in the home of an elderly woman. When the woman entered a nursing home, the dog was sent to the Central Missouri Humane Society in Columbia.

Bob Tillay, president of Dirk’s Fund, spotted the dog by then renamed Willy on an adoption Web site and arranged to have him brought to St. Louis.

“Sweet old man! He knows how to sit and shake,” the Web site cooed.

The dog’s ears were so infected he couldn’t hear. His coat was so matted he had to be shaved. And Dirk’s Fund paid to have some cysts removed.

The group eventually took Cujo/Willy to a nursing home in Clayton, to serve as a pet for residents. But things didn’t work out the dog needed a yard where he could run off the leash and his picture went up on the Dirk’s Fund Web site.

A week ago, Noreen Barczewski’s brother-in-law, Michael Barczewski, went to the Web site on a fluke. He’d been looking for a dog to adopt and saw the picture of the old dog with the white heart mark and white feet. Michael and his wife, Gail, had been the original breeders of Cujo. He recognized the dog immediately, and the reunion followed within days.

Now 13, Cujo had never been forgotten by the his original family especially Kayla, who was just 4 when the dog disappeared. Kayla insisted on hanging the retriever’s red felt Christmas stocking each year, confident he’d someday come home.

“I had something in my heart,” the fourth-grader said Friday, patting her pet’s soft golden coat, “and I knew he wasn’t gone.”