Yesterday (at NewsBusters; at BizzyBlog), reacting to a disgracefully biased January 27 report by Andrew Taylor at the Associated Press, aka the Administration’s Press, on the “no budget, no pay” provision in debt-ceiling legislation passed by the House, I wrote that “Taylor’s report is historically bad … Sadly, I believe AP can do much worse during the next several years — and probably will.”
An unbylined AP item released shortly after the government announced that the economy contracted by an annualized 0.1 percent during the fourth quarter of last year made that fear come true under ten hours (I may have more on the very odd time stamp of this report — 8:11 a.m. — in a future post). On his program today, Rush Limbaugh had a field day with the nonsense presented (bolds are mine throughout this post):
GDP Shows Surprise Drop for US in Fourth Quarter
The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.
The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.
The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming spending cuts.
Still, the weakness may be because of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.
And those volatile categories offset faster growth in consumer spending, business investment and housing — the economy’s core drivers of growth.
Another positive aspect of the report: For all of 2012, the economy expanded 2.2 percent, better than 2011′s growth of 1.8 percent.
You know you’re getting desperate to say something good when you’re celebrating a 0.4 percent increase in annual economic growth that’s in the 2% annual range.
So trillions upon trillions of stimulus dollars from the 2009 stimulus plan which did nothing but lengthen the recession and slow down subsequent growth, plus $5 trillion in “budget” deficits in four years (along with an even higher number added to the national debt), plus wave after wave of “quantitative easing” by the Federal Reserve accompanied by near-zero interest rates — and we get a quarter of negative growth. That Keynesian stuff they still teach as gospel in most college macroeconomics classes is something else, isn’t it?
As to “government spending cuts” … Lord, we’ve been through this so, many, times … In the GDP report, the only relevant “government spending” is “Government consumption expenditures and gross investment” — in other words, purchases and capital investments by government entities in real goods, services, and fixed assets. Yes, this category of GDP went down, but “government spending,” which includes transfer payments and other things, didn’t. Most “government spending” at the federal level has nothing to do with GDP. For those who are keeping score, total federal government “outlays” (i.e, “government spending”) rose by 12% from $810 billion in the third quarter of last year to $908 billion in the fourth quarter, meaning that items which don’t add any value to the economy skyrocketed by an even higher percentage. Put that in your GDP pipe and smoke it, AP.
The AP’s exercise in excuse-making follows a three-part series which appeared this past weekend whose premise was that we’re in for a long period of tepid economic and job growth at best because technology is moving so fast that new jobs aren’t springing up fast enough to replace the ones which are disappearing. The strange timing of that series — just 2-1/2 months after the end of an election campaign when the press continually insisted that everything was at least fine and probably getting better — combined with today’s result is enough to make one wonder if AP was tipped off to today’s result last week and then given the assignment of trying to soften the blow.
As one would expect, Rush went after the excuses, and additionally ridiculed the AP’s sudden fear that tax increases might hurt the economy going forward:
Listen to this: “The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming spending cuts.”
Really? I thought tax increases were great for the economy. That’s what the news media and the Democrat Party has been telling us. Same thing with unemployment benefits. I thought that was great for economic growth. What happened to that? The surprise contraction could raise fears about the economy’s ability to handle tax increases. You mean they’ve known all along at AP that tax increases slow down the economy? They’ve known that all along, and they’ve been lying to us about it, and now that we’re contracting they’re worried, openly admitting they’re worried?
… the White House says we need more taxes and more spending. That’s what critical investments in the economy are that promote growth. They’re talking about promoting growth. We’re shrinking! … There’s nothing that they are doing that promotes growth. And we know this. And, by the way, I continue to say it’s on purpose.
Those who say it isn’t on purpose continue to have less and less wiggle room with each passing day that the administration and the Fed continue to insist on repeating what hasn’t been working for almost four years.
Cross-posted at NewsBusters.org.