January 27, 2012

AP’s Crutsinger Falsely Claims ‘Sharpest Government Spending Cuts in 40 Years’ Hurt GDP

In two items about today’s report on economic growth from the federal government’s Bureau of Economic Analysis today, Martin Crutsinger claimed that today’s lower-than-expected annualized growth of 2.8% during the fourth quarter of 2011 (vs. expectations of 3% or higher) was hurt because of big “cuts” in government spending, especially federal spending — supposedly the biggest cuts in 40 years. I guess the underlying message is supposed to be that Congress shouldn’t try to reduce federal programs any more, because already they’re allegedly being cut at historic rates.

Baloney. Crutsinger was either being incredibly ignorant by assuming that all government spending is part of GDP (it’s not; only government purchases of goods and services are components of GDP), or he deliberately deceived his readers. At the federal level, purchases of goods and services and “investment” are only about 30% of all government spending. Total spending has hardly gone down at all. Here are the respective relevant paragraphs in his two reports:


Ohio and Pennsylvania RINOs in Full Freak-Out Mode

Filed under: Activism,Ohio Politics,Scams,Taxes & Government — Tom @ 10:17 am

TeaPartyValuesQuestionJan2012For now, I’ll just have “put it out there,” so to speak, regarding two outrageous RINO-related items. Most readers here will already know that I’m really, really not pleased.

Do read what’s happening in Pennsylvania’s GOP, because it’s worse than what’s going on in Ohio.



From the Cleveland Plain Dealer (bolds are mine throughout this post):

Ohio Republicans battle over proposed membership change for party central committee

The Ohio Republican Party chairman wants to change the rules for who can serve on the party’s state central committee, a proposal that comes about a month before GOP voters elect the next 66-member group.

The move could help Chairman Kevin DeWine fend off a challenge to his leadership. DeWine and Gov. John Kasich are locked in a messy election-year battle for control of the party.

The proposal also could create chaos, because the ballot for the 66 races across the state is already set. The rule change could make some of the winners of the March 6 primary ineligible to serve.

The current state central committee will vote at its Feb. 3 meeting on the rule change, which would require a registered Republican to have voted in each of the three most recent statewide GOP primaries. It’s unclear how many candidates such a rule would affect.

DeWine would not comment. His spokesman Chris Maloney said the change is not intended to fight off a challenge from the governor but to keep people from other political regimes from infiltrating the Republican party.

Bytor at 3BP reacts, with apologies for shamelessly appropriating the graphic at the top right:

Ohio Republican Party’s outrageous new tactic to keep the Tea Party out and Kevin DeWine in

Below is an excerpt of the memo sent out to committee members:

… Proposed Amendment*:

For the purposes of these Rules, to be qualified, and thereby seated and sworn in as a member of the State Central Committee, a person shall have voted in the three immediately preceding Republican statewide primary elections, including in the year in which the person was elected.

Talk about trying to protect their established incumbents! To be seated on the committee, a person will have to have voted in the Republican primary in 2008, 2010 and 2012. This is a pretty brazen move by Kevin DeWine and his allies. This rule, if adopted, is clearly intended to make it harder for outsiders to be seated on the State Central Committee, even if they are elected to the position.

The timing of this is no accident. There are two clear goals here.

1. Keep the Tea Party out. And this one isn’t new. Back in 2010, the ORP outraged many conservatives when it used the tea party brand and sent out mailers with a “Tea Party Values” logo that endorsed…Jon Husted.

2. To protect Kevin DeWine’s Chairmanship. The ORP knows that many of this years challengers to committee incumbents would vote against him in the next election for chairman.

Kevin DeWine … must resign.



This one from Christopher Freind’s “Freindly Fire Zone” is much worse than Ohio’s mess, given that it involves fixing the party’s endorsement process for a U.S. Senate seat:

No Secret Ballot For GOP Endorsement Is Same As Union Card Check

… Common sense tells us that whenever a secret ballot is not employed, many people will not vote their conscience. Instead, they fall victim to intimidation and arm-twisting, and end up casting a ballot in favor of the person whom they are strongly encouraged —AKA “told” — to support. The result is a rigged, Banana Republic election, anything but “Free Choice.”

… Given this, it seems extremely hypocritical that the Republican State Committee of Pennsylvania — while opposing Card Check — jettisons free and fair voting for its own members by refusing to allow secret ballot votes on important issues, such as Party endorsements.

… And now, on the eve of the meeting in which the Committee will vote whether to endorse a candidate for the U.S. Senate (or not endorse at all), that issue has become a firestorm that is only growing in intensity.

The big question centers on whether the Party will endorse millionaire Steve Welch, a favorite among several GOP leaders, including Republican Governor Tom Corbett. The problem many have with Welch is that he voted for Barack Obama in the 2008 Democratic primary and supported former Congressman Joe Sestak, a stalwart liberal consistently to the Left of Obama. Welch claims he left the GOP out of frustration that it wasn’t conservative enough, leaving more than a few Republicans perplexed.

… So would the Party really risk massive damage to itself by endorsing an Obama-voter, and make the sin mortal by doing so without a secret ballot?

They can’t be that dumb.

But this being Pennsylvania’s Republican Party, all bets are off.

Should they endorse Welch, it will be a double whammy, throwing the entire Party into a quagmire from which it would be difficult to escape.

State Committee would cement the perception that its endorsements are behind-the-scenes deals by inside powerbrokers hell-bent on executing individual agendas — the rank-and-file Party faithful be damned. More damaging, it would play out — in full public view — exactly how ruthlessly efficient Card Check tactics are, making unions blush with envy.

Like I said, Keystone State RINOs with the apparent full support of Governor Corbett are on the verge of engaging in something far more treacherous than we’re seeing in Ohio, something I hardly thought possible.

The irony in PA to me is that any conservative with a pulse should be able to beat prolife-betrayer Bob Casey. So why go with a guy with a ridiculously liberal voting record?

Fourth Quarter GDP, Advance Estimate: An Annualized +2.8%

Filed under: Economy,General,Taxes & Government — Tom @ 8:59 am

Gosh, “everybody” just “knew” that fourth quarter GDP growth was going to be 3% or more (See Update 2 — Some were even confident that it would be above 3% and speculated that it might really end up being 4%), and that there was soooooo much pent-up GDP growth left over from the third quarter’s disappointment.

Oops — and don’t forget that this is subject to two revisions, which in previous quarters during the POR (Pelosi-Obama-Reid) economy have generally gone the wrong way.

From Uncle Sam’s Bureau of Economic Analysis (bolds are mine):

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 2.8 percent in the fourth quarter of 2011 (that is, from the third quarter to the fourth quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 1.8 percent.

… The increase in real GDP in the fourth quarter reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, residential fixed investment, 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.

… The acceleration in real GDP in the fourth quarter primarily reflected an upturn in private
inventory investment and accelerations in PCE and in residential fixed investment that were partly offset
by a deceleration in nonresidential fixed investment, a downturn in federal government spending, an
acceleration in imports, and a larger decrease in state and local government spending.

… The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.8 percent in the fourth quarter, compared with an increase of 2.0 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 1.0 percent in the fourth quarter, compared with an increase of 1.8 percent in the third.

The change in real private inventories added 1.94 percentage points to the fourth-quarter change
in real GDP
after subtracting 1.35 percentage points from the third-quarter change. Private businesses
increased inventories $56.0 billion in the fourth quarter, following a decrease of $2.0 billion in the third
quarter and an increase of $39.1 billion in the second.

Real final sales of domestic product — GDP less change in private inventories — increased 0.8 percent in the fourth quarter, compared with an increase of 3.2 percent in the third.

So companies added lots of inventories (seasonally adjusted, of course) in hopes that people will be buying stuff in early 2012 — while personal consumption expenditures only increase at a 2.0% annual clip.

About that “residential fixed investment” — The increase was an annualized $8.5 billion on a base of $337 billion (see Table 3 at the full release), which is really $2.1 billion for a single quarter. It contributed 0.23 points to the annualized growth of 2.8 points. No, this is not a signal that housing is back (and besides, most of that increase may have gone to apartments).

I deliberately haven’t looked yet, but I can’t imagine that anyone is going to be impressed with this — and I expect the press to whine that government “cutbacks” killed fourth-quarter growth (0.93-point decrement to GDP, with over 75% of that [-0.72] in national defense).


UPDATE 1, 9 a.m.: Zero Hedge’s succinct summary (bolds original theirs)–

The US economy grew at a 2.8% annualized pace in the supposedly blistering fourth quarter, yet the number was a disappointment not only in that it missed estimates of 3.0% (and far higher whisper numbers) but when one looks at the components, where a whopping 1.94% of the upside was attributable to a rise in inventories as restocking took place. And as everyone knows in this day and age a spike in inventories only leads to sub-cost dumping a few months later. In other words, the economy grew at a 0.8% pace ex inventories. Yet for all intents and purposes, this is considered “growth.” Personal consumption was also weaker than expected coming in at 2.0% on estimates of 2.4%

UPDATE 2, 9:15 p.m.: Flashback, from the Associated Press’s Martin Crutsinger on December 23 –

Economists think the economy is growing at an annual rate of more than 3 percent in the final three months of this year. That would be the fastest pace since a 3.8 percent performance in the spring of 2010.

Among the positive factors are a brightening job market, strong holiday shopping, further gains in factory production and cheaper gas prices, which leave consumers with more money to spend on other items.

Later that day, Crutsinger and Daniel Wagner upped the enthusiasm ante by entertaining the possibility that fourth-quarter GDP might be an annualized 4%.

Today’s initial AP report from Crutsinger (saved here at host for future reference, fair use and discussion purposes) gives absolutely no indication that this morning’s GDP release was in any way disappointing, and pretty much squares with how I predicted the press would handle today’s news:

The U.S. economy grew at a 2.8 percent annual rate in the final three months of last year, the fastest growth in 2011.

Americans spent more on cars and trucks, and companies built up their stockpiles. But growth in the October-December quarter – and all of last year – was held back by the biggest annual government spending cuts in four decades.

The Commerce Department said Friday that the economy grew just 1.7 percent last year, roughly half of the growth in 2010 and the worst since the recession.

Most economists expect businesses to ease up on restocking in the first three months of the year. That should slow first-quarter growth. And consumers may cut back on spending if their wages continue to lag inflation.

Note the clever use of “government spending” in the second paragraph. Crutsinger should know (heaven help him if he doesn’t) that the government-related figures in the GDP report only represent government purchases of goods and services, and is not at all evidence that there have been any real “cuts” in overall government spending. In the fourth quarter, the federal government’s portion of GDP in today’s dollars was an annualized $1.044 trillion, which is less than 30% of Uncle Sam’s $3.5 – $3.6 trillion in annual spending.

UPDATE 3: Ed at Hot Air notes that last quarter’s revisions shaved 0.7% from GDP. This has been the general pattern since Obama became president, so it certainly wouldn’t be a big surprise if 4Q11 ends up being 2.5% or lower.

Friday Off-Topic (Moderated) Open Thread (012712)

Filed under: Lucid Links — Tom @ 8:00 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.


Positivity: Next Church doctor is model for evangelization

Filed under: Positivity — Tom @ 7:45 am

From Rome:

Jan 26, 2012 / 05:59 pm

Today’s world can learn a lot from St. John of Avila, according to those who have studied the life of the next Doctor of the Catholic Church.

“St. John of Avila is far from us in time, but nearby for his figure, his life, his evangelizing witness and for his teaching,” Archbishop Juan del Río Martín of Spain’s Archdiocese for Military Services told CNA.

Archbishop del Río Martín was one of three experts on the Spanish saint who gathered in Rome on Jan. 20 for the presentation of a new book in Spanish that explores the writings of St. John of Avila.

The archbishop, who wrote his doctoral thesis on St. John of Avila’s teachings, believes that Pope Benedict made an investment in the future of the Church by choosing the 16th-century saint as the Church’s newest doctor.

The Pope has called the Church to a new evangelization, he notes, and in the “Apostle of Andalusia” she has a “model of how to evangelize.”

WaPo’s Josh White Can’t Figure Out ‘Motive’ of Jihadist Military Site Vandalizer, Shooter, and IED Preparer

Would someone please buy the Washington Post’s Josh White a clue? He can’t seem to get a handle on the “motive” for the actions of Yonathan Melaku (actually, I think White is pretending).

Melaku has just pleaded guilty and will be sentenced to 25 years in jail. Authorities say he vandalized military grave markers, shot at the Pentagon and military museums, and was working on an improvised explosive device. But the headline to White’s story (HT Atlas Shrugs) and the reporter’s content act as if no one has the foggiest idea what drop Melaku to do what he did (words which betray motivation are bolded):