October 31, 2009

USAT Headline Calls 3Q GDP Growth ‘Torrid,’ Ignoring Article Source’s Suggestion ‘Not to Get Carried Away’

usatodayDoes the self-described “Nation’s Newspaper” — er, make that the nation’s second newspaper — have a MoveOn mole as a headline writer?

The paper’s headline at its report on Thursday’s government announcement that the nation’s Gross Domestic Product (GDP) came in at an annualized 3.5% after four consecutive quarters of decline was not only over the top. Its message went directly against an admonishment by an economist quoted in Paul Davidson’s underlying report, which was to not “get carried away by the really strong number.”

Many commentators, while gratified that GDP growth occurred, have cautioned that the growth was influenced heavily by government programs that either have already run their course with debatable long-term impact (i.e., Cash for Clunkers), or are probably not going to last much longer even if extended (e.g., the first-time homebuyers’ credit), simply because the government is running trillion-dollar annual deficits and can’t afford them.

Get a load of the story’s headline, and how it contrasts with Davidson’s generally pretty good reporting (bold is mine):

Economy grew at torrid 3.5% rate in 3Q; stocks jump

News that the economy grew at a 3.5% pace in the third quarter, its best showing in two years, sent stocks soaring Thursday.

…. The growth in GDP, fueled by government-supported spending on cars and homes, was the strongest signal yet that the longest, deepest downturn since the Great Depression is ending.

But a second report out Thursday showed the number of people claiming jobless benefits for the first time dropped only slightly in the latest week, evidence that the labor market remains weak.

…. Many economists believe that while the recession that began in December 2007 is history, the third-quarter spurt was largely fueled by government incentives and industry trends that will fade, leaving a wobbly economy.

“Don’t get carried away by the really strong number,” says economist Patrick Newport of IHS Global Insight. “The economy is still losing jobs and it’s still fundamentally weak in a lot of places.”

…. Newport …. says (that) almost half the growth stemmed from a rise in consumer spending that was juiced by the government’s expired cash-for-clunkers program, which ended in August.

“Torrid” was not a word that was frequently applied to the U.S. economy during the Bush presidency, even though several quarters came in above 4% as originally reported (the government has since done a comprehensive adjustment that reduced some of them to below 4%). This Google News Archive search on ["torrid GDP "economic growth"] (typed exactly as indicated between brackets) covering 2007, a year when both second- and third-quarter growth came in above 4% before that comprehensive adjustment, returns 61 results, with very few of them directly relating to the U.S. economy.

Cross-posted at NewsBusters.org.

Celebrating, and Capitalizing, on Our Misery

Filed under: Economy,Taxes & Government — Tom @ 1:28 pm

ap_obama_pelosi_reid_090203_mnDemocrats are now admitting that they like their POR (Pelosi-Obama-Reid) economy.

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Note: This column went up at Pajamas Media and was teased here at BizzyBlog on Thursday. Go here and here for BizzyBlog specifics on the third quarter GDP report.

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The economy, as measured by growth in the nation’s Gross Domestic Product (GDP), finally grew again in the third quarter. That bit of decent news only papers over an otherwise dreadful situation.

Of course, compared to the alternative, the positive GDP report is welcome. Barring drastic subsequent downward adjustments, it brings an end to the recession as normal people define it. Whether it concludes the recession as determined by the National Bureau of Economic Research (NBER), which was inexplicably allowed to hijack the dictionary and substitute their arbitrary judgment as to what an “official” recession is decades ago, is anyone’s guess.

NBER’s alleged experts “determined” that the current recession really began in December 2007, during a quarter when the economy grew at an annualized 2.7%. The NBER-defined recession somehow continued during the second quarter of 2008 while GDP was growing at an annualized 1.5%. If the group ultimately declares that the recession ended during the past quarter, it will be the first time it has done so while the economy was shedding so many seasonally adjusted jobs (768,000, or almost 0.6% of the workforce, pending possible adjustments).

While GDP is up, many economic metrics that matter more to the average person are down, so much so that it’s probably fair to say that the economy as most Americans experience it is still shrinking. This explains why, despite the “it’s not that bad” hymn the choir known as the nation’s establishment press continues to sing, the Conference Board’s Consumer Confidence Index fell sharply in October, and is below where it was in September 2008.

The most obvious problems are soaring unemployment and growing underemployment.

The seasonally adjusted unemployment rate in September was 9.8%. Even that horrid figure, which Christina Romer of President Obama’s Council of Economic Advisers expects not to change much between now and the end of 2010, masks how bad things really are. That’s because many potential workers are dropping out.

If you compare the sum of the civilian labor forces of all 50 states and the District of Columbia at this Bureau of Labor Statistics table as of September 2009 to a year earlier (separately calculated here), you’ll find that the workforce shrunk by almost 600,000. Take out Texas, and the shrinkage is almost 900,000. Perform the same operation on this seasonally adjusted table (again shown here), this time comparing September 2009 to July, and you’ll see a decline of 351,000 in just two months (almost 400,000 if you again take out Texas). Meanwhile, during the past year the nation’s 16-and-over population has increased by almost 2 million. It’s clear that a lot of people who would prefer to be working have taken themselves out of the job market, thus disappearing entirely from the government’s jobs analyses.

This trend has already twisted the impact of official state and local employment reports. In Ohio, for example, the seasonally adjusted unemployment rate dropped from 10.8% to 10.1% in September. Big deal; the change occurred not because more people found work, but because more people dropped out.

Beyond that, those who are still working are on average working less and taking home less. The average work week, at 33 hours, is at a record low. The government’s September index of real average weekly earnings was down 1.9% from December.

One quarter of positive GDP growth hardly makes up for all of this. That there is a palpable sense of misery permeating this economy, and that it is not dissipating, is undeniable.

Now that this malaise has arrived and appears likely to remain in place for a while, many members of the Democratic Party are glad it’s here. That’s because they believe that the currently awful economy will help them pass government-controlled health care and other elements of their statist agenda.

I’m not saying it, they are, up to and including the President himself:

The bad economy is good for President Obama and Democrats as they try to reinvent the health care system with scant Republican support.

Congressional Democrats …. say that economic insecurity and high unemployment stoke public support for their proposals to guarantee insurance for millions of Americans.

….. “(Washington Congressman James McDermott said that) in 1993, we were talking about the uninsured as ‘them.’ Now it turns out this is for us. When a bank like Washington Mutual in Seattle lays off 3,000 people, they lose health insurance. Millions of people with insurance are asking, ‘What if I lose my job?’ ”

Mr. Obama is doing everything he can to highlight this sense of insecurity as he tries to persuade people with insurance that his proposals would help them. Worries about insurance are “keeping more and more Americans awake at night,” he said last month.

The fate of health legislation may hinge on whether those anxieties trump concerns about the effects of the Democratic proposals.

Barney Frank, sensing a historic power-enhancing opportunity, is doing his part to capitalize on the widespread economic stress. Recently on MSNBC, the Massachusetts congressman said that in regards to the nation’s financial system, “…. we are trying on every front to increase the role of government in the regulatory area.” This comes from a guy who for the past year has stood idly by while the Federal Housing Administration has proactively (I would argue deliberately) repeated the mistakes that sent Fannie Mae and Freddie Mac over the cliff to the tune of what will ultimately be hundreds of billions of bailout dollars.

Thus, the very people who over a year ago brought about what I have since July 2008 been calling the POR (Pelosi-Obama-Reid) economy now want to capitalize on it to enact their power-hungry, commerce-crippling agenda.

Beltway Democrats’ detestable, ghoulishly opportunistic and barely disguised euphoria over how bad it is for so many of us is enough to make you wonder if they set out to create this mess in the first place. The way they are now attempting to take advantage of it lends strong credence to that belief, almost to the point where you don’t really need to wonder any more. After all, if taking down the economy wasn’t their original goal, you would expect that they’d be reacting very differently now — and they’re not. Our national nightmare is Rahm Emanuel’s and his party’s dream come true.

NYT’s Zeleny Again Involved in Obama Story Scrub

NYTlogoWithPaper2009Bloggers and their readers have “joked” about the New York Times being the official house organ of the Obama White House. Maybe it’s not a joke.

Earlier this month (as seen at NewsBusters; at BizzyBlog), several bloggers caught the Times making significant changes to its initial coverage of Chicago’s humiliating loss of its bid to host the 2016 Summer Olympics, and of President Obama’s involvement in that loss. The first Times report by Peter Baker was fairly harsh, questioning the President’s judgment in getting involved, while citing his slipping poll ratings.

After Times organ grinder — er, reporter — Jeff Zeleny got a hold of the story, most of the harshness went away, as did Baker’s original story. All of a sudden, at the same URL, there was no reference to tarnished presidential prestige. A dismissive assertion that the embarrassment “would fade in a news cycle or two” appeared. There was also a mention of Obama’s 25-minute meeting with Afghanistan General Stanley McChrystal that was not in the original. The reference to falling poll numbers also disappeared.

Well, the Times has just pulled a similar stunt in its coverage of President Obama’s Wednesday night/Thursday morning visit to Dover Air Force Base. Once again, Jeff Zeleny is involved. Here’s a screen grab from Ed Morrissey’s 10:12 a.m. yesterday post that described the details (top portion of NYT’s search result page originally shown at Hot Air was omitted to conserve space; the Times’s revisions were originally noticed by Greyhawk at Mudville Gazette and NiceDeb at her place):

HotAirPostOnNYTdoverVisitRevision1009

Actually, Morrissey caught the Times in mid-scrub. A search on the same words (in quotes, to filter out articles containing some of the words) now comes up empty. How convenient.

For those who think the title of Morrissey’s post is unfair, I would suggest that the more important matters to pursue are, first, why the Times seems to be making a habit of scrubbing instead of preserving original on-the-scene reports, and second, why it appears to feel compelled to clean them up, almost invariably to make Obama and his administration look better.

In a real sense, it matters little whether the ultimate cause of these memory-hole treatments is actual White House pressure, a perceived need to stay on the administration’s good side to retain access, or simply a bunch of apparatchiks like Jeff Zeleny voluntarily carrying out what they think is their duty to present Dear Leader in the best possible light. The result is the same: slanted, biased, prettified pseudo-journalism.

If the Times is concerned about why its daily circulation is over 7% below that of a year ago and has dropped to 923,000 from 1.038 million just two years ago, it could start by asking itself how throwing away first drafts of history can possibly be considered legitimate.

Cross-posted at NewsBusters.org.

October 30, 2009

White House Blog Whines About Edmunds’s C4C $24K/Car Claim, Ignores Current Consequences

cry-baby-cartoonWe’re just going to have to get used the fact that we’re long past the point where we should expect dignity and stick-to-the-facts restraint from this White House. Going after its critics is something the previous Bush 43 administration should have done more, but on the rare occasions when it did, it conducted itself and framed its language appropriately.

Such is clearly not the case with the current bunch, which more and more looks like a collection of thin-skinned crybabies than the occupiers of the highest administrative perch in the land.

One of the latest examples comes from Macon Phillips at the White House blog. In a post that, except for the presence of expletives, reads more like something you might find at a far-left blog than as a thoughtful riposte, Phillips chooses to go after Edmunds.com, a leading car information and valuation site, for daring to claim, as noted yesterday by NewsBuster Julie Seymour, that the government spent about $24,000 for each incremental Cash for Clunkers sale while the program was in place.

Here are some excerpts from Phillips’s 12:20 p.m. October 29 post, including one assertion (bolded by me near the end) that he should have known better than to have made:

Busy Covering Car Sales on Mars, Edmunds.com Gets It Wrong (Again) on Cash for Clunkers

On the same day that we found out that motor vehicle output added 1.7% to economic growth in the third quarter – the largest contribution to quarterly growth in over a decade – Edmunds.com has released a faulty analysis suggesting that the Cash for Clunkers program had no meaningful impact on our economy or on overall auto sales. This is the latest of several critical “analyses” of the Cash for Clunkers program from Edmunds.com, which appear designed to grab headlines and get coverage on cable TV. Like many of their previous attempts, this latest claim doesn’t withstand even basic scrutiny.

The Edmunds analysis is based on two implausible assumptions:

1. The Edmunds’ analysis rests on the assumption that the market for cars that didn’t qualify for Cash for Clunkers was completely unaffected by this program.

In other words, all the other cars were being sold on Mars, while the rest of the country was caught up in the excitement of the Cash for Clunkers program.

…. 2. Edmunds also ignores the beneficial impact that the program will have on 4th Quarter GDP because automakers have ramped up their production to rebuild their depleted inventories.

Major automakers including GM, Ford, Honda and Chrysler all increased their production through the end of the year as a result of this program, which will help boost growth beyond the third quarter. The actions of private market participants, who would not increase production if they didn’t think demand for their product would be there through the end of the year, is a far better indicator of market dynamics – and one that Edmunds.com conveniently ignores.

Geez, Macon, a week earlier, an unbylined Associated Press report told us what the real results of the increased production you celebrate have been (bold is mine):

Spending on customer incentives like low-interest financing and rebates soared in October among auto manufacturers, according to the auto research Web site Edmunds.com, as carmakers seek to clear out old inventory that piled up after the Cash for Clunkers program ended.

Automakers ramped up their production in recent months in response to the wildly successful clunkers program. Now that sales have leveled off, inventories have piled up again and automakers are eager to clear dealer lots, Edmunds said. Luxury models and trucks are being discounted “particularly heavily,” Edmunds Senior Analyst Jessica Caldwell said.

General Motors Co. has been particularly aggressive in its incentive spending, offering zero-percent financing on several models.

I suppose the White House will now start going after Edmunds for reporting actual market observations. Or perhaps it will “suggest” that the wire service look elsewhere for “more reliable” car-market info. Or perhaps the AP will do so on its own to avoid making waves.

In terms of the current business situation — In a normally functioning vehicle market, manufacturers would be getting continued and more reliable market feedback on sales results and customer reactions not distorted by government largesse, and would be in better position to adjust their production levels to what’s happening out there on this planet, in this country. Instead, what appears to have happened is that the automakers, likely misled to an extent by an establishment press that touted C4C’s supposedly wild success (perpetuated by AP above) — and perhaps in the cases of government-controlled General Motors and Chrysler, pressure to ramp up recalls of laid-off employees — were temporarily transported to the Obamulan galaxy. In this unfamiliar faraway fantasy world, where actions appear to have no financial consequences, they interpreted the C4C’s results as a false signal that the vehicle market might be recovering more permanently and fired up the production lines. Now, having returned to earth, their heavy reliance on incentives strongly indicates that such is not the case.

If Macon’s analysis is reflective of the thought processes higher up the White House’s food chain, our economy is in the hands of people who are spending way too much time in another world that isn’t the one the rest of us are experiencing on the ground.

But getting back to fundamentals — Clearly, it’s not enough for Phillips to dispute the Edmunds analysis, which is of course subject to scrutiny like any other. From a position of perceived power as a de facto administration spokesperson, the White House blogger clearly made it a point to ridicule and disparage Edmunds, sending a clear message to anyone else considering dissenting from what the White House wants have framed as the conventional wisdom that they will be subjected to similar treatment.

This AP search on “Edmunds” (showing only the incentives-related item), meaning that the “Essential Global News Network” hasn’t deigned to take notice of Phillips’s heavyhandedness. How convenient. Way to speak truth to power and stand up for the little guy, AP.(/sarcasm).

The best establishment press coverage of the situation I found was at the Detroit News. Writer David Shepardson did a good job of analyzing the arguments, but dodged the issue of White House ridicule and intimidation.

If something like this had come from Bush 43′s White House, the cries of “stifling dissent” from the establishment media would have been loud and long. Though others have picked up the story, their coverage is far more muted compared to what we would likely have seen just a year ago.

Top image was obtained at this link.

Cross-posted at NewsBusters.org.

Health Care: The ‘We Do What We Want, Bleeeeep You’ Congress

Filed under: Economy,Health Care,Taxes & Government — Tom @ 9:16 am

Jefferson Airplane/Starship guitarist Paul Kantner is the original source of the cleaned-up quote. He sent it to Rolling Stone, which published it in its original form in 1978 after Dave Marsh’s largely scathing review of the band’s “Earth” album in March 1978.

Kantner’s quote is my post title because it’s what Nancy Pelosi and the radicals running Congress are telling the American people. Unlike Kantner, who was declaring that he and his legion of musicians would pursue whatever they defined as artistry, Rolling Stone be damned, Nancy Pelosi and her crew’s “Bleeeeep You” declaration wishes to foist their twisted, statist version of a health care system on all Americans — the public’s clear opposition, and the measure’s obvious unconstitutionality, be damned.

This IBD editorial describes it:

A 1,990-Page Medical Monstrosity

Speaker Nancy Pelosi’s cry in unveiling the House’s massive reform bill might as well have been “Viva la health care revolution!” America never voted for change like this.

Just as most congressional Democrats refused to listen to the angry public at town halls in the summer, Speaker Pelosi was not interested in ordinary Americans attending the outdoor rally on the West Front of the Capitol, where she and her fellow House Democrats rolled out their 1,990-page monster health reform bill on Thursday.

YouTube recorded someone not on the RSVP list being refused entry and asking a staffer why the announcement of legislation that will radically affect the lives of all Americans isn’t open to the public. “Because that’s how we’re handling this event,” she told him.

Truth be told, most lawmakers are excluded too. As the Hudson Institute’s Hanns Kuttner noted on the National Review Web site, you would have to devour 221 pages a day to have read this life-changing legislation in its entirety before it comes to a vote, promised for before Veterans Day, Nov. 11.

Weeks after its unveiling, new tricks are still being discovered within the Senate health bill. Kaiser Health News’ Julie Appleby reported Thursday that, despite claims the bill will limit what those in the lower and middle income groups will pay for health insurance, “The fine print shows that, over time, the premium costs could rise well beyond those caps.”

The reason for this, Appleby explains, is “the cost of coverage would shift from a percentage of income to a percentage of the premium, no matter how high the premiums go.” This will be a big, unpleasant surprise for the working middle class.

Washington Post columnist Harold Meyerson on Wednesday revealed that the Senate bill’s excise tax on “Cadillac” plans “targets a lot of Chevy plans as well.” The tax follows a formula based on the consumer price index plus 1%. But if medical costs and insurance premiums rise significantly higher than the CPI — a near sure thing — a lot more plans get taxed.

Reminiscent of the Alternative Minimum Tax, a measure to soak the rich will end up drowning Joe Sixpack.

…. What similar horrors await detection within Nancy Pelosi’s 1,990-page behemoth? Time will tell, but it may take a lot more time than the 13 days House Democrats are giving America to digest this revolutionary proposal.

…. Both the House and the Senate are set to wreck the greatest health care system in the world — unless those now taking it for granted raise a ruckus, and fast.

Positivity: FOCUS conference ‘Made for More’ to be held in Orlando

Filed under: Positivity — Tom @ 8:53 am

From Orlando, Florida:

Oct 29, 2009 / 04:39 pm

The Fellowship of Catholic University Students, a college campus outreach program focused on bringing students to Christ through Bible studies and personal relationships, will host a national conference over the holidays in Orlando, Florida.

FOCUS hosts a national conference every two years, and past conferences have attracted in excess of 3,000 students. Featuring live music from acclaimed Christian recording artists, Eucharistic adoration,
breakout sessions, a comedian and a variety of speakers.

Students will have the opportunity to hear music by Matt Maher, a contributing artist for Life Teen, and Matthew West.

Conference attendees will also hear talks by Fr. Benedict J. Groeschel, CFR, founder of the Franciscan Friars of the Renewal; Archbishop of Denver Charles Chaput; FOCUS founder Curtis Martin and three professors from the Denver-based Augustine Institute. Author and speaker Matthew Kelly, whose message of living God’s will by becoming the best version of yourself was inspired by the Second Vatican Council’s universal call to holiness, will also speak at the conference. ….

Go here for the rest of the story.

A Reality-Based Look at 3Q09′s GDP (Plus IBD Update)

Filed under: Economy,Taxes & Government — Tom @ 12:09 am

Anyone still operating under the illusion that Thursday’s GDP report showing an annualized growth rate of 3.5% during the third quarter is anything to get excited about, or represents anything remotely sustainable, needs to read and digest Karl Denninger’s take (or I should say takedown) at the Market Ticker (HT to previous post commenter baqueronman).

Do read the whole thing.

Denninger gets to a GDP contraction of almost 1.5% after subtracting the impact of Cash for Clunkers (-1.6%), the increase in government purchases of goods and services (-2.37%), and the inventory build-up (-0.94%).

I disagree with the direct impact of his second item, which I think is half of what he claims (Uncle Sam’s purchases of goods and services are about 15% of GDP, not 30%, even though his tax burden is 30% or more). I’m also not ready to dismiss the inventory situation as a legitimate element of growth, if it reflects taking levels back to where they have to be to serve customers; to the extent they might be based on overoptimism, that would be a problem.

If you take away what I think is the correct government effect (-1.18%) and ignore inventories, you’re left with a positive 0.66% (3.5-1.66-1.18) — and you still wouldn’t be done. From that you would have to subtract an unquantifiable amount of personal consumption supported by the $8,000 homebuyer credit and the massive increases in transfer payments we have seen, especially in Social Security, before you could begin to approximate privately-driven GDP in this going-statist economy. That effect would certainly send that version of GDP into negative territory.

Some of the Market Ticker tabulator’s concerns about data quality (remember today’s report is Uncle Sam’s “advance estimate”) indicate that we could see a bit of a reduction in today’s reported number by the time it gets finalized just before Christmas. If so, that would make GDP net of artificial stimulants even more negative.

But Denninger’s biggest and most important point is that declining incomes can’t support future growth, and in fact point in the opposite direction:

Forward the big problem is the deterioration in personal income. You can’t spend what you don’t have without credit creation, and that’s fallen off a cliff. The Fed’s credit reports continue to come in with huge contractions – this should not surprise, as demanding that banks lend to people who are seeing their income shrink is into the realm of pure idiocy.

…. You cannot have an economic recovery when on a q/o/q basis real disposable income is contracting at a 7.4% annual rate and worse, the spread between nominal and real income is widening, indicating that mandatory purchases such a(s) food, energy and health care – are increasing.

Not to mention the fact that the administration and Congress are intent on vastly increasing the cost and/or availability of the second and third items. Perhaps, if we’re lucky, we’ll still be able to eat.

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UPDATE: IBD’s take

In late July, economist J.D. Foster of the Heritage Foundation put it succinctly: “This is no longer an experiment in economic policy. The results are in: Keynesian stimulus does not work.” This GDP report doesn’t change that conclusion a bit.

If that’s so, our only hope going forward is the private economy. Though hindered by massive government intervention in housing, banking and industry, it’s still the most resilient in the world.

Businesses and households have cut spending to the proverbial bone. Now they’re reaping the first benefits of all that pain.

Yes the “pain” has been felt by businesses and business owners, but it’s been worse for those thrown out of work, and those who are working less than they want to.

The immature collection of crybabies in the Obama administration wants to keep blaming Bush 43 for why we are where we are. That’s obviously false; it’s been their POR (Pelosi-Obama-Reid) Economy since the summer of last year. Even if the administration’s “it’s Bush’s fault” lie resonates with some, it has a limited shelf life. At some point, for those whose don’t get it, it may remain Bush’s fault for causing, but it will be this administration’s fault for failing to fix, and in fact making it worse.

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UPDATE 2, Nov. 3: Comprehension-impaired folks not worthy of linkage are conveniently misinterpreting the above narrative as proof that the stimulus “worked.”

ROTFLMAO — What are we going to do, go into hundreds of billion more in debt every quarter in a never-ending quest to keep GDP positive, regardless of the long-term consequences? Even if we wanted to (Paul Krugman at the New York Times is apparently among those who would do this, saying that “he stimulus was far too small given the scale of our economic problems”), it’s NOT sustainable.

The point of course is that the real, non-steroid-treated economy either barely grew or contacted a bit.

October 29, 2009

Latest Pajamas Media Column (‘Celebrating and Capitalizing on Our Misery’) Is Up

Filed under: Economy,Taxes & Government — Tom @ 12:06 pm

ap_obama_pelosi_reid_090203_mnIt’s here.

I want to go on record thanking PJM for expediting its review of the column so that it is appearing only hours after the third-quarter GDP report was released.

The column addresses the relative unimportance to the average person of today’s positive GDP news, given that the metrics affecting people more directly (unemployment, real income) are decidedly heading the wrong way, and appear destined to do so or remain in a funk for quite a while. Such is the nature of the POR (Pelosi-Obama-Reid) Economy we have endured since June-July 2008.

As its title indicates, the column also deals with how Democrats are reveling in the country’s misery. If you think I exaggerate, read the column, especially my conclusion about what it implies about who is responsible for how we got to this point, or go here to the official Obama administration house organ.

The column will go up here at BizzyBlog on Saturday afternoon (link won’t work until then) after the blackout expires.

3Q09 GDP Report Thread: The Recession Ends, The POR Economy Continues (Update: An Annualized +3.5%)

Filed under: Economy,Taxes & Government — Tom @ 8:23 am

Related New Post, Oct. 30 — “A Reality-Based Look at 3Q09’s GDP (Plus IBD Update)”

__________________________________________________________

So we’re finally here.

The government will shortly announce that the third quarter went positive, bringing an end to the recession as normal people define it.

As of Wednesday afternoon, Goldman Sachs was predicting that gross domestic product (GDP) growth for the third quarter would come in at an annualized 2.7%, ending a string of four straight quarters of contraction. The consensus of others, according to CNNMoney.com, was a positive 3.2%.

Whether it brings an end to the recession as determined by the National Bureau of Economic Research (NBER) is an open question. My guess is that it will. Based on the justifications NBER used to date its beginning of the recession in December 2007, it probably shouldn’t. After all, 768,000 seasonally adjusted jobs were lost during the quarter at a very consistent clip.

The report will be here at 8:30 (longer-term link here).

UPDATE: The number is an annualized +3.5%. In actual non-annualized terms, The POR (Pelosi-Obama-Reid) Economy’s 3.8% four-quarter dive has been partially offset by roughly 0.9%. That leaves us roughly 2.9% in the hole since the POR Economy began in June of last year. It’s a start; given the horrid employment situation and the size of the hill left to climb, hold the champagne, and even hold the beer.

UPDATE 2: It is encouraging that the GDP growth components are all positive, but sustainability is questionable. The personal consumption component (+2.36%) is the largest. I believe it was likely driven by increases in transfer payments such as food stamps, unemployment benefits, and Social Security. It certainly wasn’t stoked by increases in income for people still working, because that, as measured by average weekly earnings, is down 1.9% since December.

The private domestic investment component (+1.22%) went positive after three unprecedentedly awful quarters where it went down a non-annualized 4%. That it came back a non-annualized 0.3% after falling for so long (5.3% non-annualized over the past seven quarters) is more of a relief than a cause for joy. At some point, companies have to replace dying equipment, cars, computers, etc., whether they like it or not.

A related Pajamas Media column will go up either later today or sometime tomorrow. Update: It’s here; the BizzyBlog tease is here.

UPDATE 3: A sober-up — I realize that data collection wasn’t up to today’s levels, but a look at the 1930s tells us that positive GDP growth doesn’t end a recession (or in that case, depression) as people feel it. You’ll see that growth during the mid-1930s was great (assuming FDR wasn’t cooking the books), but persistently high unemployment lingered until World War II. In the 1930s, FDR created a high-wage, high-unemployment economy that grew. The POR Economy as seen right now in its formative “recovery” stage is shaping up to be a flat-wage (or worse), high-unemployment economy that somehow grows. We’re supposed to be impressed?

One thing such an economy does is play into the statist agenda, as you’ll see in the PJM column when it appears.

UPDATE 4: GDP-related quote of the day, from the BBC

“It’s good to have the economy growing again,” said Brian Bethune, economist at IHS Global Insight.

“But we don’t think that rate of growth is sustainable because it is distorted by all the government stimulus.

“The challenge here is to get organic growth – growth that isn’t helped by fiscal steroids.”

It will be a surprise if this appears in a U.S. establishment media publication.

Mr. Bethune makes an excellent point that is reinforced when you look at the history previous recoveries.

In the six quarters that began in 1Q1983, the private investment component of GDP growth was huge (top set is total GDP growth, and the bottom is the private investment component):

5.1 9.3 8.1 8.5 8.0 7.1 3.9
2.20 5.87 4.30 6.84 7.15 2.44

You see the same thing but to a lesser degree from 3Q2003 to 4Q2004, which of course is because the Bush tax cuts were not as robust:

6.9 3.6 2.8 2.9 3.0 3.5
2.28 2.32 0.35 2.79 0.88 1.40

In this context, 3Q08′s private investment component of +1.22% in the first quarter of an alleged recovery is middling at best, and needs to come in much higher in future quarters if sustainable growth is to occur.

Alan ‘GOP Wants You To Die Quickly’ Grayson ‘Apologizes’ a Month Later for Vicious Sept. Sexist Insult

GraysonOnGOPdieQuicklyHealthCare090In late September, Florida Congressional Democrat Alan Grayson earned attention and apparently fawning support from the far left by describing the Republican Party’s health care plan, as “1. Don’t get sick; 2. And if you do get sick, 3. die quickly.”

Grayson’s supposed apology for these over-the-top remarks on the House Floor — remarks that would surely have earned him censure and relentless media coverage had he been a Republican criticizing a Democrat — consisted of saying, as paraphrased by Clay Waters of NewsBusters, that his “remorse was not for Republicans, rather for the dead …. comparing the existing health care system to the Holocaust.”

This is from a guy whose party has several go-to health care “experts” and others (e.g., Zeke the Bleak Emanuel, John “Sterilize The Water Supply” Holdren) who advocate what Sarah Palin correctly characterized as “death panels.”

Little did we know that in September, Grayson made himself a House ogre with his floor remarks, he hurled a grievously sexist and offensive insult at a senior Federal Reserve adviser. Wait until you see what he called Linda Robertson on the apparently syndicated but apparently lightly heeded Alex Jones show (relevant audio begins at about 0:35 of the 1:43 YouTube video; Warning – Objectionable language follows):

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October 28, 2009

SOSAD (Same Old Song And Dance) News of the Day

Filed under: Taxes & Government — Tom @ 7:23 pm

At the WashTimes — Obama’s already far worse on this front than Bush 43 ever was, and rapidly approaching a Clintonian level only nine months in:

During his first nine months in office, President Obama has quietly rewarded scores of top Democratic donors with VIP access to the White House, private briefings with administration advisers and invitations to important speeches and town-hall meetings.

High-dollar fundraisers have been promised access to senior White House officials in exchange for pledges to donate $30,400 personally or to bundle $300,000 in contributions ahead of the 2010 midterm elections, according to internal Democratic National Committee documents obtained by The Washington Times.

One top donor described in an interview with The Times being given a birthday visit to the Oval Office. Another was allowed use of a White House-complex bowling alley for his family. Bundlers closest to the president were invited to watch a movie in the red-walled theater in the basement of the presidential mansion.

The re-renting of the Lincoln Bedroom awaits.

Lickety-Split Links (102809, Morning)

Filed under: Lucid Links — Tom @ 8:26 am

We obviously don’t appreciate what Dear Leader is doing for us (the link’s headline and text have since been modified):

APconsumerConfidenceDrop1009jpg

We’re just supposed to be happy that the economy is probably growing, though jobs are still going away. I suspect we’ll learn tomorrow at 8:30 a.m. that the government’s portion of Gross Domestic Product is what’s doing most or all of the growing.

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This (saved here in graphic form) must all be some kind of misunderstanding …. right? Note at the very bottom of the story that it is purportedly from the Associated Press.

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I’m also sure that Barney Frank didn’t really-really mean it when he said the following on MSNBC:

Relevant portion of transcript (at the 1:00 mark):

Frank: …. The right wing took control of the government and ruined it. They gave it a bad reputation. Now that we are trying on every front to increase the role of government in the regulatory area, we run into this public opinion that says, “Hey, those are the guys who screwed up Katrina.” So the frustration is that they’re benefitting from their own incompetence.

It’s frankly too bad for Mr. Frank that his revisionist history is a load of rubbish. We haven’t had a “right wing-controlled government” since about 1991, when Bush 41 abandoned his “no new taxes” pledge. Proof that Bush 43′s was not a “right wing-controlled government” is here.

October 27, 2009

Top 25 Newspapers’ Year-Over-Year Circ Drop Is ‘Largest in Decade’

newspaper_X_225Note: I have preserved the underlying details at this post for future reference.

It’s a variation on the old riddle, “What’s black and white, but read all over?”

If you change one word and add two others, the answer to the resulting question — “What’s still mostly black and white, but red all over?” — would be, based on just-released information about their daily circulation, “every one of the nation’s top 25 newspapers turning in comparative numbers.”

The figures come from the newspaper industry’s Audit Board of Circulations (ABC), and cover the April-September 2009 time period.

Here are a few paragraphs from Michael Liedtke’s coverage of the carnage at the Associated Press, which depends largely on newspaper subscription fees for its lifeblood. Note the “so far” reference in Liedtke’s third paragraph:

Circulation at newspapers shrank at an accelerated pace in the past six months, driven in part by stiff price increases imposed by publishers scrambling to offset rapidly eroding advertising sales.

Average daily circulation at 379 U.S. newspapers plunged 10.6 percent in the April-September period from the same six-month stretch last year, according to figures released Monday by the Audit Bureau of Circulations.

It’s the largest drop recorded so far during the past decade’s steady decline in paid readership – a span that has coincided with an explosion of online news sources that don’t charge readers for access. Many newspapers also have been reducing delivery to far-flung locales and increasing prices to get more money out of their remaining sales.

The latest decline outstripped a 7.1 percent decrease in the October 2008-March 2009 period and a 4.6 percent decline in last year’s April-September window.

I will be taking a more detailed look over a longer term at the situation later, but a few things stick out noticeably in the Top 25 Daily and Sunday lists found at Editor & Publisher:

  • Only one daily paper, the Wall Street Journal, with a +0.61% increase compared to April-September 2008, showed a year-over-year increase. Every other daily listed that has a change recorded (three don’t), shows a decline of 5% or more. 15 of the 22 reporting a change had a decline of over 10%.
  • On the Sunday side, the results were only slightly better, and still horrid. Only the Arizona Republic, at -0.87%, got close to holding last year’s circulation. The New York Times’s 2.66% drop was the runner-up. Seven of the 24 papers reporting changes sank by more than 10%.
  • Speaking of the Times, its daily circ plunged 7.28% to 928,000 copies. After holding its own during the preceding six months largely as a result of transforming itself into a shameless soapbox for candidate/President Barack Obama, ABC’s most recent results brought the Times below the million mark for the first time in a very long time with a convincing thud.
  • USA Today’s 17% drop, and its accompanying fall from the first-place perch now occupied by the Wall Street Journal, was relayed to parent company Gannett’s employees and the general public earlier this month. According to Gannett, this is largely due to travel industry cutbacks in free papers provided to hotel guests. However, the Journal has pointed out that it has made inroads into some of the very hotels that represent USA Today’s bread-and-butter revenue source.

Papers which one thought might have bottomed out after steep declines in several previous reporting periods were still among the worst performers this time around. Examples (from the Daily list):

  • The Los Angeles Times, which was over 1 million subscribers not that many years ago, fell 11.05% to 657,000. LA blogger Patterico can give you dozens and dozens of reasons why.
  • The Boston Globe, the supposedly premier paper in all of New England, fell 18.48% to 264,000. That’s less than four filled-up Gillette Stadiums.
  • The San Francisco Chronicle dived by 25.82% to 252,000.

What may be the biggest shock is a paper that is no longer on the list.

The Atlanta Journal-Constitution did not make the top 25. A year ago, it was at 275,000. Since the currently reported circulation at the Number 25 St. Petersburg Times is 240,000, that means that the AJC, after a string of previous double-digit drops, decline by at least another 12.7% (35,000 divided by 275,000). Atlanta is the country’s ninth-largest metro area.

That the four grievously biased papers identified in the three previous paragraphs are among the serially worst performers especially supports the notion that while the Internet and technology in general have clearly been factors in the print industry’s decline, bias in its various forms — leftist slants, annoying PC language, and the suppression of stories that don’t fit the conventional “wisdom” template — have also contributed to the accelerating decay in many instances. Simply put, they don’t get it, and they’re paying dearly for it.

Image was found at Memebox.com.

Cross-posted at NewsBusters.org.

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BizzyBlog Update, April 27, 2010: Advertising Age’s coverage of the circ news makes an important point about the WSJ’s performance –

And for anyone following the fortunes of newsprint, even that picture renders conditions a bit on the rosy side. As permitted by Audit Bureau of Circulations rules, The Journal’s paid circulation report includes subscriptions to its paid website. Excluding 407,002 such electronic subscriptions, up 14.4% from a year earlier, the core print paper actually saw paid circulation decline 2.4%.

Info Collection: Top 25 Daily and Sunday Papers for April 1 – September 30, 2009

Preserved here below the fold for when Editor & Publisher links go behind their subscription wall, and in case Burrelle’s ultimately doesn’t publish its analogous Top 100 list:
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From the UK: A Confirmation of What Has Intuitively Been Known

Filed under: Immigration,Taxes & Government — Tom @ 11:32 am

From the UK Telegraph (HT Belmont Club via Instapundit):

The huge increases in migrants over the last decade were partly due to a politically motivated attempt by ministers to radically change the country and “rub the Right’s nose in diversity”, according to Andrew Neather, a former adviser to Tony Blair, Jack Straw and David Blunkett.

He said Labour’s relaxation of controls was a deliberate plan to “open up the UK to mass migration” but that ministers were nervous and reluctant to discuss such a move publicly for fear it would alienate its “core working class vote”.

Note that none of this has been motivated by anything relating to making the UK a better place to live, work, chase your dreams, and/or raise a family. It has had everything to do with retaining and perpetuating power.

Leaders like Tony Blair may (emphasis may) have been so out of touch that they believed this effort wouldn’t fundamentally change the nature of their country. Many of those under him knew better, and either didn’t care or actually wanted that change.

Let’s call this what it is: Deliberately allowing large numbers of people into your country who won’t share and are even hostile to your country’s values, legal structure, and traditions — enough that their presence swings elections and ultimately alters those things for the worse — is nothing less than incremental treason.

Though there’s no smoking gun (yet), imperfect but largely valid analogies to the situation in the U.S. are pretty obvious to those with open eyes.