July 30, 2011

GDP Media Coverage, Part 3: AP Pair Pins Prime Blame on Gas Prices, Finally Cites Uncertainty — Over Debt Ceiling

The AP’s coverage of the U.S. economy late Friday focused on high gas prices as the dominant, uh, driver of this year’s anemic growth both visually and in its text.

As will be seen after the jump, the graphic at the AP’s national site is of a gas price sign. The final sentence in the caption of the full-size version reads “High gas prices and scant income gains forced Americans to sharply pull back on spending.”

The underlying report by Christopher Rugaber and Paul Wiseman predictably mentioned gas prices first and foremost, tagged debt-ceiling negotiations as a suddenly important contributor to economic uncertainty (where have they been while President Obama, his cabinet, his czars, and his hyperactive regulators have been injecting uncertainty in megadoses during the past two years?), and relayed Ben Bernanke’s months-old warning that cutting back too much on government spending would hinder economic growth:

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‘Honey, They Shrunk the Private Sector’ Update

Filed under: Economy,Taxes & Government — Tom @ 10:39 am

From Table 3B (Real Gross Domestic Product and Related Measures — Billions of chained 2005 dollars; quarters seasonally adjusted at annual rates) in yesterday’s GDP full release, comparing federal government, all government, and private sector growth or contraction since the recession as normal people define it began, and since the recession as the National Bureau of Economic Research defines it began (figures are in billions):

GDPgrowthGovtAndPvtTo2Q11

Not a lot to say, except the usual: “Rebound? What Rebound?

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Previous Post: February 7, 2010 — Honey, They Shrunk the Private Sector

WSJ on the GDP Updates

Filed under: Economy,Taxes & Government — Tom @ 9:52 am

PostRecessionReaganVsObama8Qtrs0711WSJpostRecessionChartReaganVsObama0711The Wall Street Journal has updated its version of the Reagan v. Obama post-recession GDP comparison at the immediate right. (Update, 7:30 p.m.: Yours truly’s version is at the far right, showing that the Reagan post-recession outperformed Obama’s by a factor of over 2.5 in two years, and by a fact of over 4 in its second year.

Its editorial says the right things, but its solution paragraph is perfunctory and fails to go to the heart of the problem — namely President Barack Obama and his grim band of “progressives” (bolds are mine):

The Obama Recovery
Why there is a growth recession, and what to do about it.

Americans already know that economic growth is flagging, but Friday’s second quarter GDP report confirms it: The current recovery, already one of the weakest on record, nearly stalled in the first half of 2011.

… The historical pattern is that the deeper the recession, the more robust the recovery.

This tale of two recoveries is an object lesson in economic policy. Taking office in 2009, President Obama embarked on one of the greatest reflation bets in history. He deployed the entire arsenal of neo-Keynesian policies to lift domestic demand, much as former White House economist Larry Summers still instructs at Harvard and most of the media still recommend.

The bet was that with all this stimulus the economy would rebound as it did in the 1980s. Most of Washington and Wall Street believed that Mr. Obama was set up beautifully to inherit a normal recovery, claim victory for his policies, and ride easily to re-election. The problem is that the policies haven’t worked. We are left with slow growth, high unemployment and $4 trillion in new debt.

The architects of this Keynesian debacle now offer the ex-post explanation that recoveries that follow financial panics are always slower. And there is no doubt that the financial meltdown has required banks, businesses and consumers to shore up their balance sheets and pay down debt.

But this is all the more reason to have pursued policies that nurture business and consumer confidence, rather than frighten them into taking fewer risks. An economy recovering from financial duress needs incentives to invest again, not threats of higher taxes. It needs encouragement to rebuild animal spirits, not rants against “millionaires and billionaires” and banker baiting. …

these folks (in the liberal political class) are intellectually tapped out. They can’t explain their current failure any more than they could the stagflation of the 1970s.

The only way out of this mess is to return to the growth policies that nurtured the boom of the 1980s. The circumstances aren’t the same, so some of the policy choices will have to be different. But the principles are the same: Encourage businesses to expand, rather than government; let markets allocate capital, rather than politicians; liberate entrepreneurs by reining in the regulatory state.

The Obama malaise wasn’t inevitable and needn’t continue. It will end when our political class admits that its nostrums have failed and it is time to once again free the creative energies of the American people.

The second-last excerpted paragraph ignores what cannot be ignored: This president, and this administration cannot abide by a recovery that isn’t achieved on their terms. They would prefer no recovery at all to a recovery which involves the 1980s-like policies which worked. Nothing short of their removal from power or utter marginalization will bring about a legitimate recovery.

Positivity: 9-year-old girl’s clean water wish takes off after her death

Filed under: Positivity — Tom @ 7:00 am

From Seattle (HT Daryn Kagan):

updated 7/26/2011 2:51:15 PM ET

Moved by Rachel Beckwith’s story, donors from across the world open their wallets to charity

Rachel Beckwith wanted to raise $300 by her ninth birthday to help bring clean water to people in poor countries. Donors from across the world are making sure her wish is realized after her death, perhaps a thousand times over.
Rachel was about $80 short of her goal when she turned 9 in June, and then a horrific highway traffic accident took her life away last week. But news of the Bellevue, Wash., girl’s pluck and selflessness emerged after the tragedy, and it is inspiring thousands of people — most of them strangers — to push her dream along.

By Tuesday afternoon, her webpage that was set up to take contributions for charity:water, a nonprofit organization that brings clean drinking water to people in developing nations, had attracted more than $200,000 in pledges.

“What could have been simply a senseless ending to such a beautiful beginning of your story has turned into something so much more. I hope that if at all possible the obvious compassion so many others have shown in taking up your empathetic cause brings some peace to you and your family,” wrote one anonymous donor who pledged $31.

… Rachel had learned about charity:water’s work through EastLake Church, and on her mycharitywater.org webpage she explained why she wanted to raise $300.

“On June 12th 2011, I’m turning 9. I found out that millions of people don’t live to see their 5th birthday. And why? Because they didn’t have access to clean, safe water so I’m celebrating my birthday like never before. I’m asking from everyone I know to donate to my campaign instead of gifts for my birthday. Every penny of the money raised will go directly to fund freshwater projects in developing nations.”

Although she fell $80 short of her birthday goal, that was just the beginning.

Donations started flowing in when community members publicized her wishes after the accident, and really took off after her story appeared on KING 5 TV, in The Seattle Times and other local media outlets.

Rachel’s story also spread on social media, getting a boost from tweets by actress Alyssa Milano and Seattle Seahawks quarterback Matt Hasselbeck, KING 5 reported. …

Go here for the full story.