Forecast: 1.2%. Reality: 0.1%. Today’s report on economic growth for the 1st quarter as measured in GDP, is what you wish to make of it. Over at the home of Team Obama, where Unicorns graze in numbers, the spin is in full force. When they assert that severe weather is/was a factor, historically, they are correct. But the spin then enters hyperdrive when they say how well the economy did, if it did, is owed to Obamacare. That’s right, Obamacare, the program that will cure the common cold, save countless thousands of lives (another number they cannot quantify but one must assume the ills that annually fell so many will be in full retreat) and have folks dancing in the streets, helped the economy. How so? Money was spent by consumers on policies. Such a fascinating piece of nonsense. Yes, they took money from their finite income and with a Government gun pressed to their wallets, they purchased a commodity they otherwise eschewed. For first time policy holders, they felt a new pinch. For those who lost their policies courtesy of Obamacare, many felt a larger pinch when they again took out a policy. In other words, for first timers and those lied to, period, they had fewer dollars to spend on all other consumer products such as food, clothing, etc.. Cumulative consumer spending accounts for almost 70% of economic activity in the US. Of course monies spent on health care policies is part of that, but the more spent there is less spent elsewhere. Mixed in with today’s worse than dismal report, business inventories are down. In other words, a company that makes widgets, made fewer, which in turn can lead to lay offs or no jobs added. Of course, Team Unicorn, I mean, Team Obama, notes that economic data is often revised. True. But revisions are usually downward. If 0.1% is lowered, nothing said, no matter how well spun, can undo a reality: we are teetering on a recession (for many, we are in a recession no matter what an army of economists say or how data is viewed or spun). Words of pure gobbledygook from Team Obama on how best to continue the recovery, continue the recovery?, are more of what is keeping it barely moving: increase the minimum wage, spend more on education yadda yadda yadda. In other words, the same gang that seems to not understand the most fundamental manners in which an economy operates, is proposing an extension of policies with add-ons that will not help but could worsen the economy. No magic wand, no fingers crossed, no mantras or make-believe, can say that raising the minimum wage will help. Sure, those who receive the raise are helped with income, but they like all others, would then face prices jacked as a result. No one in business raises labor costs without passing them on to all others. That is a reality Team Obama seems to not know or not consider. All for ideology for them. And that’s the problem, or part of it: their economic models are based on ideology. The greatest panacea for all ills and misery from the monolithic mindset of liberals: spend. In particular, spend on education. Forget the fact that the US outspends all other Nations by a sizeable amount, just spend more on education. How has that worked out? Not. Very. Good. The bang for buck is embarrassing. New housing starts are down sharply, a staggering 20% of US families have not a single worker in it, health care costs are rising, not dropping as promised, period. There are so many negative factors at play that the prescription from Team Obama would be the medicine that made the patient feel better only because it killed the patient. Reading various takes from scores of economists, including those masquerading as economists on Team Obama, you would think all is good. A minor blip is what the 1st quarter is, mostly due to weather. Hmmm? Less than robust 2013 4th quarter growth was due to austerity ( as falsely defined by Team Obama) and oh, gee, 4th quarter growth for 2012? 0.1%. (that performance, and I use the word performance liberally, was not explained by weather or austerity). Economic performance is cyclical. For Team Obama, that remains so with one notable exception: bad performance keeps recycling. With Team Obama, the other recyclable: their inane pronouncements on the economy. If 2014 started as a blip, what of the slowest ‘recovery’ ever following a recession? Typically, sharp recoveries follow sharp recessions. To use their own words, their policies for over 5 years have given rise to a blip, one that keeps recycling. I don’t know which is worse: do they not understand the failings of their policies or do they simply not care? Or both? Thursday, we will be told of job growth for March. Most analysts predict 200,000 jobs added (to maintain pace with those of age entering the job market, you have to at a minimum, add 250,000 jobs a month). A cautionary note: most of them also predicted 1.2% GDP for the 1st quarter...
Posted on: Wed, 30 Apr 2014 17:40:36 +0000
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