January 2, 2010

True Then, True Now

Filed under: Economy,Taxes & Government — Tom @ 10:49 am

Via JFK, and Scott Brown, Massachusetts US Senate GOP candidate:

Brilliant.

Memo to Paul Hackett: Did you notice the party identifications in the vid? That is how you do an honest ad when you like something someone from the other party is saying. What you did in 2005 wasn’t honest. If you had done it right, things might have turned out differently. Thankfully, they didn’t.

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UPDATE: From Brown’s web site — Hist stands on the issues.

Economic Rebound? What Economic Rebound?

flatlineAn AP writer’s year-end wrap-up epitomizes the year’s biased reporting on the economy.

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Note: This column went up at Pajamas Media and was teased here at BizzyBlog on Thursday.

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After the fact: Geez, everything is on YouTube somewhere. I just located the Breaking Away scene the column refers to, and my 30 year-old memory of it isn’t quite the same (/surprise). It’s actually stronger, in that Dave (Dennis Christopher) intervenes while Dad (Paul Dooley) is in a dispute with customer who wants a refund, where I thought that Dave had actually given out the refund first and Dad found out a little later. I’m glad the YouTube captures Dad’s wake-up after the incident, which made him physically ill to the point of being bedridden:

Thus, I have made the edits in Paragraph 3. Wouldn’t it be cool to have the car that’s the subject of the dispute today, when GM was a real company and not a ward of the state?

Anyway, on to the column.

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Last week, the Associated Press’s Jeannine Aversa announced the top ten business stories of 2009, according to an AP survey of newspaper editors.

Not surprisingly, the top story involved the economy. Incredibly, the editors apparently framed it (or maybe the AP framed the survey question for them) as, “Recovery from Great Recession.” Further, Aversa later described the result as “Economy’s Fall — and Rebound.”

This result brings to mind a scene in Breaking Away, a truly underrated movie. In that scene, the story’s lead character Dave (played by Dennis Christopher) begins a brief stint helping out at his father’s (Paul Dooley) used car dealership. It’s brief because when an unhappy buyer returns his vehicle, Dave quickly gives him agrees with the customer that he should get his money back. Dad’s incredulous response when told is, “Refund? REFUND?

My adverse reaction to Aversa’s description of 2009′s economy is similar to that of Dave’s Dad: Rebound? REBOUND?

Her assertion is objectively false. You haven’t “rebounded” until you’re back to where you were. Even if economic growth for the fourth quarter comes in at 4% as some predict, the economy won’t even be 40% of the way back from where we were before the recession as normal people define it (“a decline in GDP for two or more consecutive quarters”) began.

More fundamentally, there’s the “little” matter of whether the recession is really over.

As normally defined, the answer of course is simple, which is why we should prefer objective standards for these types of things. The third quarter’s positive annualized growth of 2.2% does indeed mean that the recession ended after four quarters of negative growth that began in July 2008.

But the normal definition is not the one the press has been using. Aversa, AP, and most of the rest of the press have spent the past year telling us that the recession began in December 2007 because the supposedly apolitical academicians at the National Bureau for Economic Research subjectively ignored their own evidence and said so. Now all of a sudden, as seen in this excerpt, Aversa is no longer averse to the normal definition:

After four quarters of decline, the economy returns to growth during the July-to-September period, signaling the end of the deepest and longest recession since the 1930s.

If she were fair, balanced and consistent, Aversa would be waiting for an NBER determination before concluding that the recession is over. Do you think Jeannine’s shifting definition might have something to do with the fact that it helps Dear Leader?

What’s really offensive about Aversa’s piece is that so many of the other top ten stories reveal how utterly ridiculous her characterization of an economy that is in “rebound” really is.

First, there’s Number 2, “Auto Industry collapse.” In November, Chrysler was still collapsing, GM’s year-over-year sales were still declining, and Ford was running just about even. The Japanese trio of Toyota, Honda, and Nissan collectively improved, but total industry sales were flat and not rebounding.

Then there’s Number 3, “Foreclosures Head Higher.” Aversa herself writes that “By the end of the year, a record 14 percent of homeowners with a mortgage are either behind on their payments or in foreclosure.” That situation is getting worse, not better.

Number 5, “Small and Mid-Sized Banks Fail,” is notable because Aversa seems to backtrack on her claim that the recession has ended when she writes that, “The banks have been undone by real estate, construction and industrial loans that soured as the recession has deepened.” Uh, what’s with the present tense?

Aversa also betrays a lack of confidence in Number 8, “Federal Aid for Economy,” when she writes that “Government stimulus programs spur sales of homes and autos but raise doubts about whether the economic recovery can be lasting if federal aid is withdrawn.” What kind of “rebound” is it if it can’t be sustained without Uncle Sam’s not unlimited largesse?

I deliberately saved Number 6, “U.S. Spills Red Ink,” for last. While Aversa dutifully notes the record $1.4 trillion deficit Uncle Sam ran during the past fiscal year, she says it occurred because “financial bailout and war costs soar(ed).” Lord have mercy.

First, as I noted earlier this year, the government began retroactively accounting for the costs of bank, car company, and other bailouts under the Troubled Asset Relief Program (TARP) on a “Net Present Value” basis, thus treating related outlays as “investments” that are not included in current spending. Two non-TARP exceptions to this are Fannie Mae and Freddie Mac, whose bailout costs thus far have exceeded $100 billion. On Christmas Eve, while much of the rest of the nation was engaged in last-minute holiday preparations and enduring weather-related airport delays, the Obama administration said it would provide the two government wards relief without limits.

Second, “war costs” didn’t “soar.” Total defense spending in fiscal 2009 was only $42 billion higher than it was in fiscal 2008, an increase of just over 7%. Even before determining how much of the increase directly relates to the wars, it accounts for less than 5% of the $962 billion jump in the deficit from the previous year’s $464 billion.

Finally, in addressing the deficit, Aversa missed or ignored an important story the rest of the press neglected, one which deserves its own entry on the list. That story is the catastrophic decline in federal tax and other collections that shows no signs of stopping, let alone “rebounding.”

Tax receipts for calendar 2009 will be about $2.04 trillion. That’s down about $530 billion, or 20%, from calendar 2008 (after adding back that year’s stimulus payments). The steepness of the decline in collections in an economy that contracted less than 4%, and where average employment declined by less than 5%, is proof positive that the “going Galt” phenomenon was very real in 2009.

As long as the administration-fostered atmosphere of uncertainty (yet another missed story) prevails, it will continue.

Positivity: Guardsman dad delivers baby before shipping out

Filed under: Positivity,US & Allied Military — Tom @ 7:01 am

From Paducah, Kentucky:

Posted : Thursday Dec 31, 2009 16:35:19 EST

Spc. Mark May sat on the Motel 6 bathroom floor, crying and kissing his newborn daughter as he rubbed her frantically with a towel.

“Breathe, baby, breathe!” he told her.

When Amby Lynn May cried Tuesday morning, it was one of the most beautiful sounds he ever heard, he said.

Amby’s mother, Amber May, 22, of Morehead, wasn’t due to have Amby until Jan. 18. She’d even taken precautions to make sure an early arrival wasn’t imminent. Before agreeing to drive her husband to Paducah to leave with the Kentucky Army National Guard’s 2113th Transportation Company, Amber visited her doctor Monday.

“Everything is fine,” he told her.

The Mays decided to drive to Paducah on Monday because Mark May, a construction and combat engineer, was supposed to be at the Paducah armory at 9 a.m. The unit was home on Christmas leave, but left Tuesday morning for training at Camp Shelby, Miss., in preparation for deploying to Iraq later this year.

Amber May said she felt “crampy” and uncomfortable Monday night, but she attributed it to the chicken wings she ate earlier. It felt nothing like labor had felt with her 20-month-old son, Mark May III, she said.

About 6:30 a.m., Amber said, she realized the cramps had a pattern. They were coming every four minutes.

Thirty minutes later they were every two minutes.

“I thought, ‘Uh-oh, we’re in trouble. We’ve got to get out of here,’” she said.

Mark May assumed his wife was having false labor pains, the same way she had with their son, but packed their belongings anyway.

“By the time he got everything in the car, they were every one minute apart,” Amber May said. “I got in the bathroom, and my body just started shoving. It only took two really good contractions, and there she was.”

Amber cupped the baby’s head. Her husband cradled Amby’s body as she slid the rest of the way out. He handed his wife his cell phone.

“I called 911 and said, I just had a baby,’” Amber May said.

McCracken County Central Dispatch received the call at 7:25 a.m. Mercy Regional Emergency Medical Service Maj. Jeremy Jeffrey was one of those who responded. Mother and baby were doing well, so all the team had to do was cut the umbilical cord and make sure they stayed warm, he said. Amber May even got to hold her baby on the ambulance ride to Western Baptist Hospital.

Mother and baby were recovering well at the hospital Tuesday afternoon. Amby weighed 6 pounds, 5 ounces. She was 18 inches long. At the same time, Mark May was on his way to Camp Shelby. The Army gave him until noon to get on the road. ….

Go here for the rest of the story.