August 26, 2011

IBD on GDP Criticizes the Endless Recovery

Filed under: Economy,Taxes & Government — Tom @ 10:25 pm

ComparingRecoveriesAt0811.pngReaganVsObamaThru8QtrsAsOf0811.pngAs expected, Investors Business Daily nails it concerning today’s even worse GDP news as does its graphic reproduced at the far right (the one at the near right updates the running Reagan vs. Obama chart for today’s GDP revision):

If you needed another metric by which to measure the failure of Obamanomics, new numbers released Friday show that two years after the recession ended the economy still hasn’t fully recovered.

According to the revised gross domestic product data released Friday, the nation’s economy grew a paltry 1% in the second quarter, after eking out a barely noticeable 0.4% gain in the first.

As a result, two years after the recession ended, the economy still hasn’t made up the ground it lost, giving Obama the dubious distinction of presiding over the most prolonged economic recovery since the Great Depression.

This isn’t just slightly bad. It’s monumentally bad.

An IBD review of all the post-World War II recessions shows that, on average, it took just over two fiscal quarters for the economy to recover from a downturn and start expanding again.

In contrast, we’re eight quarters into the Obama recovery, and the expansion is somewhere off in the distance, with real GDP still $65.5 billion below the pre-recession peak. And if you take into account all the population growth that’s occurred over the past two years, we’re even further behind.

Obama likes to blame the depth of the downturn for the “painfully slow” recovery. “We didn’t get into this mess overnight, and we won’t get out of it overnight. It’s going to take time,” he said — nearly a year ago.

The claim is bogus. This recession lasted only slightly longer than the 1981-82 contraction — 18 months vs. 16 — and wasn’t as severe when measured by peak unemployment.

This pathetic “recovery” is a monument to the failure of Keynesianism.

2Q11 GDP, First Revision (082611): From an Annualized +1.3% to +1.0% (Update: Reactions)

Filed under: Economy,Taxes & Government — Tom @ 12:45 pm

(Carried to the top; updated for others’ reax)

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After last month’s calamity of major prior-period revisions and an anemic advance second-quarter growth estimate of an annualized 1.3%, some calm would be nice.

I don’t think we’re going to get it.

Here are a few revision predictions I found as of 11 p.m. Thursday:

  • The Associated Press’s Chris Rugaber, in his report on unemployment claims Thursday morning, wrote that “Economists forecast it will be closer to (an annualized) 1.1 percent, according to a survey by FactSet.”
  • Oddly, an AP report on yesterday’s stock market by Matthew Craft doesn’t have a GDP guesstimate, but treats Ben Bernanke’s address in Jackson Hole, Wyoming as the main event. That may indicate that AP didn’t want to report what it had on GDP as of that point.
  • Possible support for the previous item’s contention is in a Zero Hedge post yesterday which notes that Stone McCarthy “now predicts a stunning 0.7% first revision to GDP.”
  • Bloomberg has an estimate of 1.1%.

The report will be here at 8:30 a.m. While we’re waiting, I’ll just say that I’m really not pleased to have lost the ability to direct link specified GDP reports at the government’s Bureau of Economic Analysis website. Their new tool forces you to go through a process to get the info, and then whatever you get expires in about 10 minutes. Really, really weak and annoying.

HERE IT IS:

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 1.0 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.4 percent.

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

The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports, an upturn in federal government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in PCE and in exports and a downturn in private inventory investment.

Overall, I would call that an “ouch.” Does anyone think that the third quarter thus far has been significantly better, or even any better?

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UPDATE: Some reactions (updated during early Friday afternoon):

  • Zero Hedge — “Stone McCarthy’s forecast of 0.7% is not necessarily wrong: it is probably just early …”
  • Economic stalwart Joe Biden says we need more stimulus.
  • Reuters — “The downward revisions to second-quarter growth came as businesses accumulated less stock than previously estimated. Business inventories increased $40.6 billion instead of $49.6 billion, cutting 0.23 percentage point from GDP growth during the quarter.”
  • Helicopter Ben Bernanke — “Bernanke proposed no new steps by the Fed to boost the economy. But at a time when Congress has been focused on shrinking long-run budget deficits, he warned lawmakers not to ‘disregard the fragility of the current economic recovery.’” I would guess this means that the press will turn this into a request for tax increases instead of spending restraint, of which there has been virtually none.
  • Ed Morrissey at Hot Air — “If Hurricane Irene doesn’t bring the vacation to an early end, this number really should have the White House political team calling to have Air Force One warming up the engines.” It should, but it won’t.
  • The UK Telly has its own reax roundup.

Latest Pajamas Media Column (‘Keynesianism’s Collapse’) Is Up (Update: The Roots Of Keynes’s Core Economic Beliefs, and His Apparent Useful Idiocy)

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 9:19 am

It’s here.

It will go up here at BizzyBlog on Saturday (link won’t work until then) after the blackout expires.

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Related (WARNING: Though obtained from “reputable” sources, what follows contains graphic content and subject matter, and links to items which are even moreso):

Two interesting things I learned about Keynes during column research, both from his fawning Wikipedia entry.

Here’s the first:

Keynes’s early romantic and sexual relationships were almost exclusively with men. Attitudes in the Bloomsbury Group, in which Keynes was avidly involved, were relaxed about homosexuality. One of his great loves was the artist Duncan Grant, whom he met in 1908; he was also involved with the writer Lytton Strachey. Keynes was open about his homosexual affairs, and between 1901 to 1915, kept separate diaries in which he tabulated his many homosexual encounters.

The first of a pair of underlying sources for this paragraph is a 1986 New York Times Book review of Robert Skidelsky’s JOHN MAYNARD KEYNES Volume One: Hopes Betrayed 1883-1920. That review, written by Robert Heilbroner, elaborated on this and other aspects of Keynes’s psyche:

Keynes had also been deeply involved in Bloomsbury’s sexual – and homosexual – merry-go-round, the ardent lover of Strachey and Duncan Grant.

… What are we to make of the last phrase of a letter … written to Strachey at age 22: “I find Economics increasingly satisfactory, and I think I am rather good at it. I want to manage a railway or organise a Trust, or at least swindle the investing public.” (Note: This is later passed off as a “joke.” — Ed.)

The aristocracy he regarded as absurd, in contrast to his father, who was thrilled to discover that he was sharing a railway train with Austrian royalty; the proletariat as ”boorish.”

… the double helix of Keynes’s personality – the public Keynes, building on the traditions of his family and of Eton, and on the influence of Alfred Marshall, the great Victorian economist who took Keynes under his wing; and the private Keynes, emerging in the passionate homosexual involvements that would rule his emotional life until his marriage to the famous Russian ballerina Lydia Lopokova in 1925. Reviewing Mr. Skidelsky’s book in The Times of London in 1983, Sir William Rees-Mogg asserted that Keynes’s rejection of the norms that governed private life led to his eventual rejection of the norms that governed public life, in particular the gold standard.

… As Mr. Skidelsky writes, “Philosophy provided the foundation of Keynes’s life. It came before economics; and the philosophy of ends came before the philosophy of means.”

… Keynes had a subversive attitude toward a whole range of Victorian morals and conventions, which enabled him to see economic problems in a very unusual way.”

The second underlying source concerns the sex diaries, and is from a 2008 Economist item by Evan Zimroth (warning: the underlying article is very graphic and will likely offend many readers):

Keynes was never a closeted homosexual, although his colleagues at Bretton Woods in 1945 didn’t always realise it, perhaps because at those conferences he was accompanied by the Russian ballerina Lydia Lopokova, his wife of twenty years. By then he was the eminent economist and statesman, and possibly no longer on the prowl.

… The first diary is easy: Keynes lists his sexual partners, either by their initials (GLS for Lytton Strachey, DG for Duncan Grant) or their nicknames (“Tressider,” for J. T. Sheppard, the King’s College Provost). When he apparently had a quick, anonymous hook-up, he listed that sex partner generically: “16-year-old under Etna” and “Lift boy of Vauxhall” in 1911, for instance, and “Jew boy,” in 1912.

… The other sex diary is more puzzling and, in a way, more informative. An economist to the core, Keynes organized the second sex diary also year-by-year, but this time in quarterly increments.

Unfortunately for us, however, this second sex diary is in code. And as far as I know, no one yet has been prurient enough to crack it.

Keynes’s often promiscuous homosexuality, which as noted above may never have ended, even after his marriage, and which also as noted involved partners who would be considered underage in the U.S. today, is relevant for two reasons. The first is that several passages above relate his hedonistic, rebellious lifestyle to his determination that the current economic order was unacceptable, and needed to be radically changed. One cannot defensibly deny these underlying influences on the content of his “General Theory.” Please note: I’m not saying it; the authors cited above are.

The second reason why Keynes’s lifestyle is relevant is the second of the “interesting things” I picked up at Wikipedia:

Keynes was a proponent of eugenics. He served as Director of the British Eugenics Society from 1937 to 1944. As late as 1946, shortly before his death, Keynes declared eugenics to be “the most important, significant and, I would add, genuine branch of sociology which exists.”

Keynes wasn’t just a eugenicist because it was trendy, “progressive” thought; he was in management, so to speak.

1946, of course, was after the end of World War II, after the horrors of Hitler had become fully known. Germany was already forcibly sterilizing 5,000 people per month by 1934, and earning grand praise from eugenicists for doing so. Yet there was Keynes, still singing eugenics’ praises. By the end of World War II, “over 400,000 people were sterilized against their will.”

Keynes’s advocacy until his death of eugenics betrayed a fundamental lack of belief in humanity to order itself without being “guided” (or even allowed to have children) by those with supposedly superior knowledge, (racial) backgrounds, and skills. This ties directly to Keynes’s fundamental belief that economies often can’t pull themselves out of depressions or contractions and return to full employment without government fiscal intervention, because its players are too dumb to pull it off on their own — even though, as I noted in the PJM column, market-oriented cultures routinely turned around, and quite nicely, without the government’s heavy hand, even as recently as the 1920-21 depression was followed by the Roaring ’20s. If that fundamental belief of Keynes isn’t valid, there’s no need for Keynesianism. Well, that fundamental belief isn’t valid. (Unless, I suppose, a society consciously chooses to poorly educate its students for several generations to the point where its adults really can’t function effectively, as many of this country’s public schools have arguably done for several decades.)

The supreme irony of Keynes’s eugenics stance is that its practitioners wished to stamp out any supposed tendencies of those who might be born in the future towards homosexuality. It seems highly unlikely that Keynes was unaware of the movement’s outlook, which saw homosexuals as “moral defectives.” So it would seem that in the eugenicists’ perfect world, Keynes must have believed that “brilliant” people like him would still survive and/or be allowed to procreate if possible because, well, he was so obviously “brilliant.”

If this is where he stood, the correct term to describe him would be: Useful Idiot.

Positivity: The Pope’s Young Army

Filed under: Positivity — Tom @ 6:00 am

From Father Robert Barron, on World Youth Day in Madrid, Spain:

August 25, 2011

I have just completed one of the most extraordinary weeks of my life. For the past eight days, I participated in World Youth Day in Madrid, a gathering of some 1.5 million Catholic young people with Pope Benedict XVI. I met enthusiastic teen and 20-something Catholics from the United States, Canada, Mexico, the Netherlands, Sweden, Nigeria, England, Australia, New Zealand, China, the Philippines, India, Denmark, and many other countries. The universality of the Church has never been, for me anyway, on fuller and more thrilling display. My Word on Fire team and I were especially encouraged to see so concretely the outreach that the Internet and the new media provide. To hear, over and again, and in dozens of different accents, that our videos and podcasts have made a difference in people’s lives was deeply gratifying.

Some images that will be forever burned in my memory: a twenty-thousand seat arena, absolutely filled with young Catholics rocking, stomping, and singing; Archbishop Timothy Dolan of New York, striding the stage like a pro, delivering one-liners worthy of David Letterman, and sharing the unvarnished Gospel with his youthful audience; giving a talk in a very hot room, jammed to the rafters with kids eager to hear about the process of discerning a vocation; hordes of young Catholics, wearing their distinctive yellow World Youth Day t-shirts, carrying overloaded backpacks, and marching through the streets of Madrid like a non-violent army; hundreds of fresh-faced religious in their distinctive habits, joyfully making their way through the various venues; tens of thousands of people kneeling in silent adoration of the Blessed Sacrament; the successor of Peter presiding over a crowd of one and a half million at an airfield southwest of Madrid; a steady stream of kids asking where they could find the adoration chapel or how they could arrange for confession; Benedict XVI himself, drenched with rain, but willing to stick it out with the giant crowd that was enduring a downpour in order to hear him. All of it rich, splendid, unforgettable.

The rest of Father Brennan’s column dealt with the establishment media’s coverage of the event, and was noted here at BizzyBlog earlier this morning.

Catholic Priest on World Youth Day: Media Coverage Was ‘Just Bizarre’

Filed under: MSM Biz/Other Bias,MSM Biz/Other Ignorance — Tom @ 12:40 am

WorldYouthDay0811I didn’t go to the Catholic News Agency’s web site tonight looking for a media bias column; I usually go there to find “positivity” posts for my home blog. When I clicked on an item with an intriguing title (“The Pope’s Young Army”), I expected that the author, Father Robert Barron, would regale me with inspiring vignettes from the Pope’s recently completed World Youth Day in Madrid.

Well, at first he did just that. But then Father Barron’s fine column took an interesting turn. Check out his reactions to how the international press covered the event, and his remarkably insightful conclusions (bolds are mine; additional paragraph breaks added by me):

I would like to focus my reflections on a phenomenon that would actually be funny if it weren’t so tragic. I’m talking about the mainstream media’s extraordinary capacity to miss the point.

Every night that I was in Madrid, I would return to my room after an incomparably rich day moving among the throngs of pilgrims and I would watch the news on CNN and the BBC. World Youth Day was, invariably, among the top stories, but the coverage was, not to put too fine a point on it, just bizarre. “Protestors descend on Madrid as the Pope arrives,” the BBC announcer would gravely intone; “The Pope was met today with strong opposition from secularists, gay rights activists, and Spaniards angry over World Youth Day’s cost to taxpayers,” the CNN anchorwoman would say, frowning into the camera.

By the admission of the news reporters themselves, the number of protestors never reached beyond a few thousand, and not one event of World Youth Day was interrupted in the least by their demonstrations. There were, at most, a few scuffles between pilgrims and the protestors.

But judging from the tone of the coverage, the average listener in the UK or the United States would have concluded that the Chicago riots of 1968 had broken out in the streets of Madrid. I actually laughed out loud when I focused in on some video of a “confrontation” between protestors and World Youth Day participants and noticed that at least half of the people in the picture were camera crews and reporters!

A million and a half young Catholics from all over the world come to celebrate their faith and to declare their solidarity with the Pope—and the networks obsess over a handful of protestors! I know that controversy sells papers and pleases sponsors, but anyone who was on the ground for World Youth Day couldn’t help but conclude there was something more at work in the gross discrepancy between reality and reportage.

The dirty little secret is that the actual World Youth Day doesn’t fit the standard secularist narrative, according to which Catholicism is a corrupt, backward-looking, moribund ideology, destined to fade away as science advances and subjectivist moral relativism becomes normative. A small percentage of priests engage in sexually deviant behavior? Blanket coverage. An international army of young people marches through the hot sun and then sits patiently through a rainstorm to see the Pope? Ho-hum. That’s called reporting the news according to a set of fairly rigid ideological assumptions and imperatives.

The Catholic Church—at least in the West—is passing through a dark period, largely of its own making. But has the Catholic Church lost the future? The mainstream media wants you to think so. But any of those who experienced World Youth Day first hand would say, “Don’t you believe it.”

The good priest’s take on the establishment press’s mindset is well-stated and spot-on. Excellent job, Father Barron.

Cross-posted at NewsBusters.org.