July 16, 2010

Heads, Obama Wins; Tails, Bush Loses: AP’s Inconsistent ‘Recession’ Definition

recessionThere are two different ways of defining a recession. The Associated Press is using one of them to define its beginning, and the other to define its end. Using the former makes George Bush look bad; using the latter makes Barack Obama look good. Imagine that.

The traditional definition of “recession,” which is used as the official metric in the vast majority of countries around the world, is that it is “a decline in Gross Domestic Product (GDP) for two or more consecutive quarters.” Using that metric, the U.S. recession began in July 2008, the first month of the first quarter during which economy contracted, and ended in June 2009, the last month of the final of four consecutive quarters of contraction. Positive economic growth resumed during the third quarter of 2009.

The other definition of “recession” is “a period of economic contraction as defined by the National Bureau of Economic Research (NBER).” For reasons I’ll never understand, but which I believe have their origins in political considerations, the government ceded the “official” definition of “recession” to the NBER several decades ago, moving this metric from the purely objective realm to the clearly subjective.

The NBER says that the recession began in December of 2007. Three months ago, it said that it was unable, based on available data, to declare that the recession has ended, even though nine months had already passed since it did so under the traditional definition. My guess is that the group will declare the recession’s end shortly, and that it will say it ended in the latter part of 2009. But until we hear otherwise, the recession as the NBER defines it is not over, and those who have been using this definition cannot yet defensibly pretend that it is over.

The Associated Press is among those who are indefensibly pretending.

A Google News Archive search on [crutsinger "began in December 2007"] (typed exactly as indicated between brackets) returns 49 examples in which Mr. Crutsinger employed the NBER’s definition of when the recession began.

A Google News Archive search on ["Associated Press" recession "began in December 2007"] (again typed exactly as indicated between brackets) returns roughly 190 examples where the wire service used the NBER’s definition or contributed to reports that did.

There are likely many more similar but inaccessible examples residing behind the AP’s and other media outlets’ subscription walls.

So imagine my surprise (I’m kidding; sadly, this is as predictable as the sunrise) when I found that Crutsinger, in a co-authored report with the wire service’s David Wagner about weakening economic indicators, told readers that the recession ended last year:

Manufacturing cools in June as recovery slows

New evidence of a slowing economic rebound emerged Thursday in reports that manufacturing activity is slowing after helping drive the early stages of the recovery.

Factory output fell in June, according to a government report on industrial production. It was the sharpest monthly drop in a year. And two regional manufacturing indexes sank this month.

Production of automobiles, home-building materials and processed food all fell in June. The data sent stocks falling.

Federal Reserve officials took note of the weakening recovery when they met last month and lowered their forecast for economic growth, according to minutes released Wednesday.

Manufacturing helped boost the economy last year when the recession ended and has since been one of the strongest sectors in the recovery.

Since I don’t think anyone at NBER has whispered this into Martin’s ear, I have to believe that he decided to change his definition of “recession” now that a struggling Democrat occupies the White House.

Since Crutsinger decided to move to the traditional definition of a recession in declaring its end, you might think that other recent AP reports have moved its beginning to July 2008. Don’t be silly.

Keeping the recession’s beginning at the NBER’s December 2007 starting point serves as a subtle but constant reminder to readers that it all began under the eeeeeevil George W. Bush, even though second quarter 2008 growth was positive, and even though tax collections reached a “Supply-Side Stunner” all-time high in April 2008.

That’s why on Friday, just one day after Crutsinger’s “recession has ended” report appeared, the AP’s Christopher Rugaber, in a story covering the sharp declines in job openings reported by the Labor Department, stuck with the NBER’s starting point:

Job openings drop in May as hiring stays weak

Job openings dropped in May from the previous month and layoffs edged up, fresh evidence that employers are reluctant to add workers.

The decline in job openings comes after a sharp rise the previous two months, driven by temporary government hiring for the 2010 census and more openings in the private sector. As a result, the number of available jobs has rebounded since the depths of the recession but remains well below pre-recession levels.

The Labor Department said Tuesday that job openings fell to 3.2 million in May from 3.3 million in the previous month. April’s upwardly revised figure was the highest in 18 months.

The department’s report, known as the Job Openings and Labor Turnover survey, illustrates how competitive the job market is. There were about 4.7 unemployed people, on average, for each job opening in May. That’s down from the peak of 6.3 last November, but is much higher than the 1.8 unemployed per opening when the recession began in December 2007.

Heads, Obama and Democrats win. Tails, Bush and Republicans lose. That’s “journalism” at the Associated Press.

Cross-posted at NewsBusters.org.

Hoover’s Historical Parallel to Obama’s ‘My Policies … Are Getting Us Out of This Mess’

Filed under: Economy,Taxes & Government — Tom @ 4:41 pm

ObamaFunnyMoneyJuly 18: This post has been revised to reflect the fact that the President said that “my policies … are getting us out of this mess” instead of what the Associated Press originally reported (“my policies … got us out of this mess”).

Dick Morris caught on to the main historical parallel two days ago:

Now Obama is trying to sell the unsellable — that the economy is getting better. In Nevada, he said: “But the question is, No. 1: Are we on the right track? And the answer is, yes.” Presumably those who are gullible enough to think they can beat the casino odds in Vegas are ripe for this form of self-delusion, but it leaves the rest of us cold. The fact is that, when asked directly in polls whether the U.S. is on the right or the wrong track, by more than two to one, Americans feel the nation is on the wrong track.

Fifteen million are unemployed and, adding in underemployed, part-time workers and those who have given up looking, the total is 26 million. So Obama’s statements of confidence are a bit like Herbert Hoover’s ritual incantation that “Prosperity is just around the corner.”

Morris wrote this before the President told NBC in an interview that “my policies … are getting us out of this mess.”

Obama is in a very real sense trumping Hoover, who personally believed but falsely claimed that prosperity was close. Obama apparently believes that his policies have already partially accomplished something. Well, okay. His policies have led to higher unemployment; a failure to make a meaningful dent in unemployment after 18 months, accompanied by frightening workforce disillusionment; declining retail sales; record foreclosures; off-the-chart federal deficits featuring unprecedented spending ramp-ups despite a 20%-plus decline in tax collections over two years, where the nation’s true cash deficits are higher than reported; a renewed decline in factory output; and an atmosphere of economic fear and business uncertainty unlike any I have seen in my lifetime, including the late-1970s and early-1980s.

(Sidebar: Note the egotistical “my”; then try to find a former president who so routinely arrogated all of the credit to himself–besides Bill Clinton, who also occasionally engaged in this fetid form of self-aggrandizement; good luck.)

The President shouldn’t be so quick to grab all the credit. This has been a group effort of one party and their three principal leaders whose most visible efforts to take down the economy and keep it there go back just over two years. That’s why yours truly has called it “The POR (Pelosi-Obama-Reid) Economy” since July 2008. The less visible efforts to take down the economy go back to 1993, when Democratic crony companies Fannie Mae and shortly thereafter Freddie Mac began routinely defrauding investors — and ultimately taxpayers in general — by misrepresenting the quality of the loans they securitized, and 1999, when Fan and Fred began opening the loan spigots to clearly unqualified and undeserving borrowers.

This is on them. It isn’t just a mess. What started as a mess — their mess — threatens to turn into the Mother of All Economic Quagmires.

____________________________________________________

UPDATE: Further confirmation that the atmosphere of economic fear cited earlier is real –

The University of Michigan’s preliminary Consumer Sentiment Index plunged to 66.5 for July (the lowest such reading since last August) from 76.0 in June, adding yet another component to a seemingly ceaseless parade of negative economic data.

Consumers are clearly worried about a fragile recovery and still high unemployment.

According to Action Economics (AE), most analysts’ expected a slight drop to about 74.0.

The Obama-protecting Bloomberg via Business Week wouldn’t tell readers how the number changed, or how much it trailed expectations. That’s why the magazine is called Biz Weak around here. I’m tempted to apply the name “Obamaberg” to Bloomberg.

AP Misses Real Eye-Opener in Obama NBC Interview; Obama Claims He ‘Got Us Out of This Mess’ (Modified in Subsequent Post)

UPDATE, JULY 18: This post was based in an Associated Press’s quote of a statement President Obama made to NBC News that “my policies … got us out of this mess.” Subsequent review of the video and transcript of that interview shows that the President really said “my policies … are getting us out of this mess.” I have prepared a follow-up post dealing with this matter and a separate significant omission in the transcript at BizzyBlog and NewsBusters.

What follows are the first three paragraphs from this short AP report on President Obama’s interview with NBC:

APonObamaGettingUsOutOfMess071610

It seems to me that the headline shouldn’t be about voters deciding who’s responsible for this mess (for what it’s worth, pal, voters can and will have their say, but that doesn’t affect who’s really responsible, any more than OJ Simpson’s jury acquittal on murder charges means he really didn’t commit the crimes).

No, the headline should really be the president’s breathtaking claim that he has — already — “got us out of this mess.”

Who knew?

Unemployment is still 9.5%, and it’s only that low because so many people have given up looking for work.

Foreclosures are still at record highs.

Retail sales have dropped by more than minor amounts for two months in a row.

The government’s budget deficit is over $1 trillion for the second year in a row (it’s really over $100 billion worse).

But the President says he “got out of this mess,” and the AP apparently takes it as a given.

Yeah, right.

Cross-posted at NewsBusters.org.

Arizona and Sanctuary Cities: What’s Transparent Is the Authoritarian Double Standard

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

In response to a question from the Washington Times, the el bizzaro Obama/Holder Department of Justice indicts itself:

A week after suing Arizona and arguing that the state’s immigration law creates a patchwork of rules, the Obama administration said it will not go after so-called sanctuary cities that refuse to cooperate with the federal government on immigration enforcement, on the grounds that they are not as bad as a state that “actively interferes.”

”There is a big difference between a state or locality saying they are not going to use their resources to enforce a federal law, as so-called sanctuary cities have done, and a state passing its own immigration policy that actively interferes with federal law,” Tracy Schmaler, a spokeswoman for Attorney General Eric H. Holder Jr., told The Washington Times. “That’s what Arizona did in this case.”

But the author of the 1996 federal law that requires states and localities to cooperate with federal authorities on immigration laws thinks the administration is misreading the statute and that sanctuary cities are in violation of federal law. Drawing a distinction between those localities and Arizona, he said, is “flimsy justification” for suing the state.

“For the Justice Department to suggest that they won’t take action against those who passively violate the law who fail to comply with the law  is absurd,” said Rep. Lamar Smith of Texas, the ranking Republican on the House Judiciary Committee and chief author of the 1996 immigration law. “Will they ignore individuals who fail to pay taxes? Will they ignore banking laws that require disclosure of transactions over $10,000? Of course not.”

The editorialists at Investors Business Daily are justifiably outraged:

The administration said its lawsuit against Arizona was all about the pre-eminence of federal law over state. Now they say city laws pre-empt federal when it comes to sanctuary for illegals. Double standard, anyone?

… So cities such as Los Angeles, Laredo, San Francisco, Austin, Ann Arbor, Cambridge and 133 others, as well as Oregon, can go on ignoring the illegal immigration in their cities, no matter what the cost, because the Feds don’t really care.

… There is one and only one way to make sense of these twists and turns of logic: cynical partisan politics pre-empting all laws.

This is what tyrants do. Depending on whether or not they like a given law, they either selectively enforce it or pretend it doesn’t exist. For all practical purposes, they become the law.

As Michelle Malkin pointed out almost two years ago, locales choosing to be sanctuaries provide de facto hideouts to some of the worst criminals and endanger residents’ safety — sometimes with deadly consequences.

Positivity: Paralyzed man really wanted to live, despite previous comments on medical treatment

Filed under: Health Care,Positivity — Tom @ 9:05 am

From Cambridge, England (underlying UK Telegraph article, “Richard Rudd blinked to save his own life,” is here):

Jul 16, 2010 / 06:11 am

A paralyzed man in England who had once said he would never want to be kept alive were he severely disabled narrowly escaped death when doctors were about to withdraw treatment. Though previously unresponsive and in a “very bleak” condition, he communicated that he wanted to continue to live.

Richard Rudd was paralyzed and brain damaged after being injured in a motorcycle accident last October and suffering subsequent medical complications. Treated in Addenbrooke’s Hospital in Cambridge, England his family thought they knew he would not want to live.

“We said that knowing Richard, there was no way in a million years that he would want to live with his injuries,” his father told the Daily Telegraph. Rudd had told his daughter that if he suffered a severe injury in an accident like a car crash, he “wouldn’t want to go on,” Rudd’s father reported.

Rudd’s father gave permission for treatment to be withdrawn. As hospital staff gathered around Rudd’s bed, they noticed he was able to blink his eyes for the first time in several weeks.

The doctors asked Rudd three times whether he wanted to continue to live. He blinked “yes” in reply to each of their three questions.

“… his doctor asked him three times if he wished treatment to continue, and each time he moved his eyes to the left, the signal for ‘yes’,” Rudd’s father reported.

Rudd was not “brain dead” but had been aware of his situation, the Telegraph reported. In his October 23 accident, a car pulled in front of his motorcycle and the collision threw him 20 feet into a ditch. He could still talk and move his arms immediately after the crash, but after complications in surgery he was brain damaged and completely paralyzed.

“He had severe injuries to his brain and we could not communicate with him. The outcome was thought to be very bleak indeed,” Prof. David Menon, who was in charge of Rudd’s care, told the Telegraph.

“In fact, Richard was in a locked in state where people have relatively normal cognitive processes in the brain but are only able to allow you to know about that by movement of the eyes or eyelids,” he continued, saying “everything changed” when Rudd showed voluntary eye movement.

Though Rudd will require round-the-clock medical care for the rest of his life, he hopes to learn to communicate using his tongue, eyes and facial muscles.

Rudd has two daughters, 18-year-old Charlotte and 14-year-old Bethan.

“His daughters are certainly glad that he’s alive. They joke around in front of him, he smiles and that lifts him for ages,” Rudd’s father said. He added that Rudd’s long-term memory is intact and he can make facial expressions, “but physically he’s gone.”

“It might not be the same Richard that we started out with, but at least he’s still coping because he still smiles when we talk about the past or when he sees his children.”

Rudd’s father said he was glad his son has been given “the chance to survive and to have a say.”

The Christian Institute, based in the U.K., noted that Rudd’s story is echoed in many other severely ill or disabled people who thought they wanted to die but changed their minds.

Go here for the rest of the story.

Federal Tax Collections Have Not Increased; Interest From the Fed is the Reason Year-Over-Year Receipts Are Up

It’s bad enough the federal government’s official budget deficit has topped $1 trillion for the second year in a row, according to the just-released June 2010 Monthly Treasury Statement. But, focusing only on receipts for the moment, a closer look makes it obvious that the situation is even worse than it appears. Don’t expect the establishment press to take any interest in the annoying but revealing details that follow.

Here is what Martin Crutsinger of the Associated Press wrote about federal collections in his Tuesday report on Uncle Sam’s current month and fiscal year deficit:

Through the first nine months of the current budget year, government revenues have totaled $1.6 trillion, up 0.5 percent from the same period a year ago.

True enough, but look at the components:

USTmts0610details

Every major component except corporate income taxes is down substantially. But it’s the last item that deserves some attention. What are these "miscellaneous receipts," and why are they up by so much (take them away, and year-to-date receipts have declined by about 1.8%).

Answer: Over $54 billion of it is from the Federal Reserve. As best I can tell, it represents dividends and interest on TARP lending and investments. This component of miscellaneous receipts is up by a factor of about 2.7 from fiscal 2009′s comparable year-to-date amount of $19.9 billion.

So the only reason receipts are up is that the Fed got into the direct lending and investment business. Tax collections that are indicators of the health of the overall economy are still down from last year, which was in turn down about 18% from the same period in fiscal 2008.

That’s not much comfort, is it?

Cross-posted at NewsBusters.org.