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)”

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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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