April 28, 2011

IBD Takes Up the Reagan-Obama Recovery Comparison

Filed under: Economy,Taxes & Government — Tom @ 11:45 pm

The Investors Business Daily graphic below pegs the beginning of the Reagan recovery as the first quarter of 1983 instead of the fourth quarter of 1982. The NBER says the 1980s recession ended in November 1982, while the last quarter of actual contraction was the third quarter of that year.

That’s a quibble at this point in comparison to IBD’s overall message, which is the following — The Reagan recovery was outstanding in virtually every way, while Obama’s “Rebound? What Rebound?” sort-of recovery has been unprecedentedly pathetic:

ISSjob_110429

Here is about half of of the related editorial — read the whole thing:

A Tale Of Two Recessions And Two Presidents

It’s been nearly two full years since the recession officially ended, and the economy is still struggling to get off the ground. It didn’t have to be this way.

When the Commerce Department released its estimate for first-quarter growth — a meager 1.8% — President Obama’s chief economic adviser, Austan Goolsbee, at least conceded that “faster growth is needed to replace the jobs lost in the downturn.”

And granted, the economy needs to expand by at least 2.5% just to keep up with growth in the labor force. So at 1.8%, we’re essentially losing ground, a fact that last week’s 429,000 initial jobless claims underscores. But what Goolsbee didn’t acknowledge is that the economy could be growing at a much faster rate, and would be if it weren’t saddled with Obama’s reckless policies.

How do we know this? Compare the two worst post-World War II recessions. Both the 1981-82 and the 2007-09 downturns were long (16 months and 18 months, respectively) and painful (unemployment peaked at 10.8% in 1981-82 and 10.1% in the last one).

What’s dramatically different, however, is how each president responded.

Obama massively increased spending, vastly expanded the regulatory state, and pushed through a government takeover of health care. What’s more, he constantly browbeats industry leaders, talks about the failings of the marketplace and endlessly advocates higher taxes on the most productive parts of the economy.

In contrast, Reagan pushed spending restraint, deregulated entire industries, massively cut taxes and waxed poetic about the wonders of a free economy.

The result? While the Reagan recovery saw turbocharged growth and a tumbling unemployment rate, Obama’s has produced neither.

Sensible conservatives need to hammer the IBD graphic above into Keynesians’ collectivist minds until they beg for mercy and become supply-siders. Why? Because, as the editorial states, we know what works, and we’ve just experienced what doesn’t.

OMG, This Is All He’s Got?

I received the following today in my email box. The subject line is “Big Things.” It’s from Organizing For America, and written by President Barack Obama.

Alleged accomplishments, ALL of which have not occurred — except Iraq, which was already planned by the time he took office — are boxed in red:

OFAobamaLtr042811

Today’s news (here, here, here) demonstrates that the economy is NOT on track. Wall Street is NOT reformed (maybe reshaped, but not improved). Health care is NOT more affordable.

Equal pay for equal work? Such laws have been on the books for decades.

That’s it? He’s kidding, right?

This is supposed to get his base fired up?

Holy moly, is he in trouble.

Well, Here We ALL Are in Greater Cincinnati, in the Land of $4-Plus Gas (UPDATES: All-Time Record Broken, and It Keeps on Going, and Going …)

Filed under: Economy,Taxes & Government — Tom @ 3:48 pm

Unlike on Monday, one station changing its sign isn’t going to change this:

CincyGasChart042811

Never forget: This is what Obama (just “gradually“) and his administration have said they want. Actually, Steven Chu wants the price much higher.

Well, here it is. How’s that hope and change workin’ out?

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UPDATE: Well, in the time it took to grab a late lunch, the local average price crossed the all-time record threshold (once at link, click on the 5-Year version) —

CincyGasPrice5YrsChart042811

Also, I noticed while getting lunch that the Meijer store on US near Fields Ertel Road, a station that is usually pretty aggressive, was carrying regular for $4.16 a gallon. The Sam’s Club across the street was lined up three deep at each pump with people waiting for what may be the last chance in a long time to get it for $3.80.

UPDATE 2: Wow, you can almost watch it go up in realtime. Now it’s pushing $4.10.

UPDATE 3: Make that breaking $4.10 —

CincyGasAabove410

UPDATE 4: Try $4.12, or a nickel increase in 3-1/2 hours —

CincyGasPrices412

Reagan v. Obama Growth Scorecoard Update (Bonus: 1984 NYT Writer Couldn’t Decide If Fantastic Growth Was Good or Bad News)

Filed under: Economy,Taxes & Government — Tom @ 2:05 pm

Lord have mercy, what a wipeout:

ReaganVsObamaGrowth7Qtrs0411

For humor purposes: Here’s what a New York Times writer had to say about the torrid Reagan-Era growth on July 25, 1984, just after the release of 2Q84′s GDP (saved in full from ProQuest as a graphic here; the original readings for 1Q84 and 2Q84 were higher than they ended up being after all comprehensive revisions):

IS the sizzling growth of the economy in the first half of 1984 good news or bad news? Obviously, for the White House, it is the best news imaginable in this election year.

Real economic growth ran at an annual rate of 10.1 percent in the first quarter and 7.5 percent in the second quarter, almost two points higher than the first ”flash” estimate. In terms of final sales – the demand for goods and services excluding changes in inventories – the upsurge in the second quarter was 10.4 percent, against 3.6 percent in the first quarter, when inventory building accounted for most of the boom.

Yet the rate of inflation has slowed to 3.2 percent in the second quarter, as measured by one price index used to adjust the gross national product for inflation. Consumer prices rose only two-tenths of 1 percent in June, the Government reported yesterday.

But the financial markets and many economists continue to fear that the Administration has overstimulated the economy, intensifying the danger that the boom will drive up interest rates and produce a bust sometime after the election.

… If slower monetary growth does not explain the decline in inflation since 1981, what does? Has the Reagan Administration in fact discovered a way of achieving strong but noninflationary growth? Is there a ”supply-side” miracle at work? Or is the current remarkable economic performance a flash in the pan, which will turn to fool’s gold after the election?

1985′s “bust” of “fool’s gold” was real GDP growth of 4.1%. December to December inflation was 3.9%, which in the context of the times was pretty low.

We could use a “bust” of “fool’s gold” like that. We aren’t going to get one while Team Obama’s policies continue in their current form.

Meanwhile, Over at DOL, Initial Unemployment Claims ‘Unexpectedly’ Spike at 429K

Filed under: Economy,MSM Biz/Other Ignorance,Taxes & Government — Tom @ 9:11 am

Holy crap:

In the week ending April 23, the advance figure for seasonally adjusted initial claims was 429,000, an increase of 25,000 from the previous week’s revised figure of 404,000. The 4-week moving average was 408,500, an increase of 9,250 from the previous week’s revised average of 399,250.

So here’s an updated look at the past eight weeks:

UnempClaims042311

At Bloomberg, there’s that darned word again:

Jobless Claims in U.S. Unexpectedly Rise to Three-Month High

New applications for unemployment benefits in the U.S. unexpectedly rose last week to the highest level in three months, a sign the labor market will be slow to recover.

Jobless claims increased by 25,000 to 429,000 in the week ended April 23, the most since late January, Labor Department figures showed today in Washington.

MarketWatch tells us that economists thought there would be a decline:

The number of people who filed new applications for jobless benefits climbed by 25,000 last week to 429,000, the highest level in three months. Economists surveyed by MarketWatch had expected claims to decline to seasonally adjusted 395,000 from the prior week’s revised level of 404,000.

Establishment press outlets are going to have to order extra truckloads of lipstick for this pig.

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UPDATE: At Zero Hedge — Per Goldman Sachs, “the latest claims reports may point to softer nonfarm payroll growth in April than March.”

UPDATE 2, 11:20 p.m.: To be fair, the raw (not seasonally adjusted) claims number was up only a few thousand from the previous week. But it was also only about 10% lower than the NSA number from the same week a year ago, while previous weeks this year have been generally running about 15% or so lower.

1Q11 Advance Gross Domestic Product: An Annualized +1.8%

Filed under: Economy,Taxes & Government — Tom @ 8:21 am

As noted a few times in the past week, lots of folks have been scaling back their predictions of first-quarter growth to 1.5% or so.

For past recovery context, note that growth on Ronald Reagan’s watch during the seventh quarter after the 1980s recession ended was an annualized. 7.1%. We could sooooo use that right now. Oh well.

The latest:

  • At the Washington Examiner — “Federal Reserve Board Chairman Ben Bernanke, speaking at the board’s first ever news conference, said on Wednesday that the nation’s first quarter growth is expected to be “realitively weak” due to “transitory” reasons such as lower than expected military spending, weaker exports and bad weather.” Big Ben expects less than 2%.
  • At the Associated Press, Jeannine “Pollyanna” Aversa, who was at 2.2% two days ago, is now at 1.9%.
  • Reuters — “Economists in a Reuters survey forecast a 2.0 percent annualized pace of growth, compared with 3.1 percent in the fourth quarter, but rising commodity prices have left some worrying about a deeper slowdown.”

The report will be here at 8:30 a.m.

UPDATE: Here it is (full report here) —

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.8 percent in the first quarter of 2011 (that is, from the fourth quarter to the first quarter) according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 3.1 percent.

The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The “second” estimate for the first quarter, based on more complete data, will be released on May 26, 2011.

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

Can’t wait to see the press reaction, which I would expect will be along the lines of “see, see, when we cut back on government spending, GDP suffers.” No, you ninnies, if you keep the private sector from doing its thing, you get mediocre results. Oh, and the reduction in government GDP-related related expenditures were primarily in national defense (down an annualized 11.7%).

UPDATE 2: Here’s Jeannine “Pollyanna” Aversa’s first pass as of 9:11 a.m., to be updated as the excuses get refined throughout the day —

Economy slowed by high gas prices, bad weather

The economy slowed sharply in the first three months of the year as high gas prices cut into consumer spending, bad weather delayed construction projects and the federal government slashed defense spending by the most in six years.

The Commerce Department said Thursday that the economy grew at a 1.8 percent annual rate in the January-March quarter. That was weaker than the 3.1 percent growth rate for the October-December quarter. And it was the worst showing since last spring when the European debt crisis slowed growth to a 1.7 percent pace.

Federal Reserve Chairman Ben Bernanke and other economists say the slowdown last quarter is a temporary setback. They generally agree that gas prices will stabilize and the economy will grow at a 3 percent pace in each of the next three quarters.

Sure babe, prosperity is just around the corner. Tell that to DOL, where the latest unemployment claims report came in with 429,000 seasonally adjusted initial claims, a huge jump from 404,000 the previous week when economists were expecting 395,000.

This “weather” excuse is also getting really annoying.

UPDATE 3: Zero Hedge

The bottom line: Q1 GDP ex-inventories came at 0.8%, the lowest since Q3 2009. The economy has hit stall speed, and absent another fiscal (nope) or monetary (QE3) stimulus, we will go negative in Q2, now that the full impact of the Japanese economic collapse has forced even the ostriches to pull their heads out of the sand.

I don’t know that we’ll go negative, but it’s hard to see how Sunshine Ben’s 3%-plus prediction for the next three quarters is going to come to pass.

Two-year-old has miraculous escape after his buggy is dragged under a 12-ton truck

Filed under: Positivity — Tom @ 5:59 am

From the UK:

24/04/2011

Moments after little Thomas Wilshaw was dragged under a 12-ton truck, his buggy lies crushed under its wheels.

Yet amazingly, the two-year-old survived the horrifying accident and has battled back to health – learning to walk and talk again.

And last night his mum Laura Wood, 20, said: “I can’t believe Thomas is still alive. It is nothing less than a miracle.

“I just froze as his buggy was crushed. I feared the worst. But look at him now. I’m just so thankful I’ve got my little boy back.”

Laura told how her son’s buggy disappeared under the wheels of a refuse lorry as she pushed him over a pedestrian crossing last August.

“Suddenly the pram handles were ripped out of my hands,” she recalled. “I heard a horrible crack and it disappeared under the wheels.

“I just remember screaming ‘Stop! Stop!’ His pram had been totally crushed by one of the wheels and Tom was just lying there, still strapped in.

“A wheel had gone over his body. I thought he was dead.”

In an incredible stroke of luck an off-duty nurse ran to the scene in Oldham, Lancs. And after looking under the lorry, she told Laura: “Your son is still alive.”

Thomas was taken to the Royal Oldham Hospital then transferred to Manchester Children’s Hospital, where he underwent an operation to remove part of his skull to relieve swelling on his brain.

Laura said: “Doctors warned me that even if he survived he may have serious brain damage and be paralysed.” Laura, her partner Richard and Thomas’s dad Ben then held an 11-day vigil by his bed before he finally opened his eyes. “He wrapped his arms around me and refused to let go,” Laura said. “The only word he could say was ‘mummy’, but it was magical.” …

Go here for the rest of the story.