Once Again, The White House Celebrates Mediocrity
Sometimes I feel like 'Alice in Wonderland'. When I look at government data on the economy, nothing is as it seems.
Take today's GDP number; the big kahuna of economic numbers. The government says the economy expanded 2% in the third quarter, better than the 1.9% that was expected.
Good? Sure, until you realize the improvement is largely due to government spending. Federal spending is up 9.5% in the quarter.
You have to go back more than 2 years to beat that. When federal non-defense spending jumped sharply, and back even further to the depths of the recession and the height of stimulus spending to see a similar gain.
Smoke and mirrors.
Government spending isn't the same thing as a company’s small and large expanding, growing and selling, and generating revenues. Private sector revenues come from people that willingly buy products. Government spending is financed by compulsory levies.
One definitely is better than the other as a source of economic growth.
Still, here is the White House statement about today's report: "The economy is moving in the right direction," said Alan Krueger, Chairman of the Council of Economic Advisers.
Right direction? Shame on you Mr. Kreuger. We have yet to open up the throttle on the right direction. The growth we have is puny. If you excluded government spending for the quarter, growth was the same dismal rate at 1.3% as it was in the second quarter.
Business investment in things like office buildings and pipelines fell 1.3%, the first drop since the first quarter of last year.
I’ve gotten used to the sleight of hand. Yesterday, I reported how California’s misreporting made weekly jobless claims look better than they really were earlier this month. Then there are the mysterious 873,000 jobs that appeared in September, the biggest increase in 30 years- just in time to drive the jobless rate down to 7.8% a month before the election.
I'm no conspiracy theorist, but as Alice said, it is getting “curiouser and curioser” as we delve deeper and deeper into these economic numbers.