One of top Politico stories of the day tells readers that, in the wake of yesterday's economic news, President Obama has a "GDP problem." After noting that the drop in economic growth was "largely due to a drop in government spending," the article adds:
Nonetheless, the politics are unambiguously terrible for Barack Obama ... and it gave an adrenal jolt to the a GOP messaging establishment left supine by the Mitt Romney mirage and recent soul-searchy infighting.
Politico's report added that Democrats "will try to spin" the news, but the party's "narrative" is "not very convincing" and burdened by "weakness."
It's almost as if facts, evidence, reason, and a cursory understanding of economic policy no longer matters at all. In reality, the economy shrank a little in the last quarter because of spending cuts, but the party demanding more spending cuts has suddenly received "an adrenal jolt" -- the Republican National Committee seemed inexplicably giddy after the GDP report was released -- even though it's now blisteringly obvious their agenda would undermine economic growth.
Any why are those who've been proven wrong acting like they've been proven right? Apparently it has something to do with whether D.C. media types are "convinced" by your "narratives."
For those who still take policy seriously, and still believe a sustained economic recovery is possible, the facts are readily available: the people who seemed happiest yesterday by discouraging economic news have it backwards, and are pursuing policies that would make the problem worse, not better.
That's not based on opinions and speculation; that's based on the report the misguided souls kept touting yesterday without reading.
It's really not that complicated.
[T]he government is hurting the recovery, and badly. But it's not because it's spending too much, or because of concerns over future policy. It's because government, at all levels, is spending and investing too little. Despite the stimulus and various other policies we've passed to help the recovery, and despite the large deficits the government has been running, government spending and investment have, at all levels, been contractionary since 2010.
The new numbers the Bureau of Economic Analysis released on fourth-quarter economic growth have received considerable attention for the clear damage that falling government spending did to the economy. According to the BEA, "government consumption expenditures and gross investment" knocked 1.33 percentage points off the total change in economic growth. If government spending had just been neutral -- that is to say, if it had neither contracted nor expanded -- the economy would have grown by 1.23 percentage points rather than shrunk by 0.1 percentage points. [...]
So yes, the government is hurting the recovery. But it's not because of deficits or uncertainty, or at least, it's hard to find evidence for either theory. The real, provable damage the government has done to economic growth in recent years has been in cutting back on spending and investment since 2010.
I can't speak to whether the Beltway is moved by the "narrative," but all available evidence makes clear that we're fighting for a recovery with one arm tied behind our back -- and we've been doing so for a couple of years now, with unsatisfying results. Ideally, we'd see the public sector and private sector adding jobs, injecting capital into the economy, and cultivating a strong recovery.
But we're not. Through much of 2010 and 2011, we saw state and local governments pursue austerity measures, slashing public investments and laying off public-sector workers -- most notably school teachers. But as 2012 drew to a close, we saw similar cuts in federal spending, and the result was yesterday's report showing an economy that's shrinking for the first time since 2009.
This is incredibly easy to fix -- policymakers can invest in the economy, lower unemployment, and inject capital into the system. But that's not going to happen, in part because gerrymandered district lines brought us a Republican majority in the House, and in part because the discourse is driven by folks who hardly bat an eye when policymakers who've been proven wrong act like they're received "an adrenal jolt" by bad news that further undermines their credibility.
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Do we need any more proof that the policies of forced austerity and spending reductions are worthless, pointless, and damaging our economy? Americans need real, good-paying jobs, not a lecture from the Tea Party, John Boehner and other Washington insiders about how we need to cut back and make do with the status quo. That attitude is offensive and is insidiously anti-growth. The GOP's reckless partisanship is dangerous for our country and is tantamount to political sabotage to rank our economy and hurt working Americans. - progressive
I find it suspicious this comes out after the election. Anyone in business knows how easy it is to "cook the books" and shift losses for months or even years (look at the decline of the financial industry and the "shelving" of actual losses that had been going on for decades). The economy bust just gave every large corporation the chance to come clean because it was industry wide.
Take a close look at what's going on in your community. We still have long time businesses closing and those that are open hanging on by their fingernails. The decline has been going on for a long time and they just now have the data to back it up? I think not!
I'm pretty sure this comes out after the election because the Republicans planned it that way.The spending cuts took place in December because of the agreement the Republicans insisted on to raise the debt ceiling in 2011. Now they are saying they have leverage because the spending cuts they demanded lowered the economy, and the solution is to cut spending much, much more? Or, more likely, in my opinion, they're going to say we should cut less in Defense industries and much, much, much more in things like the Centers for Disease Control, food inspection, assistance to law enforcement agencies and schools.
This is just sad. The meme here is that an economy is sustained not by producing goods and services one can sell elsewhere.... but by an entity that takes money from the country, borrows money from other nations, and prints money by the trillions while making nothing that will feed, shelter, clothe, or sustain the people that feed it.
And that is what you want more of? Really?
I can never tell if you passed your Econ 101 and Econ 102 courses as an undergraduate from your musings, as they tend to oversimplify the economics at issue, and/or project a gibberish like economic mind from the written evidence! -Kevo
Oh my. You must mean people like the military, the DOT,FEMA,food inspectors,Coast Guard,ect.,ect.,ect.,ect. I do want some more of that.
Shooter what you have here is the REAL fact of "Makers and Takers"
The vast Majority of the American People are the "Makers" you know the people who actualy go to work and 'by the sweat of their labor' MAKE things. If they can't afford to purchase those same things they provide...well then the machine breaks down.
Now this could be fixed relatively easily if the "TAKERS" (those who control the vast majority of private Capitol in this country would turn some of it loose so that it went to the working class in the form of jobs and salary and benefits, but they won't so it falls to the Government to do it.
Now you can get all "It's class warfare" and Go "Galt" all you want but none of it is either true or sensible it's a complete load of BS designed to allow the private sector to squeeze every last drop of blood from this country.
Do you know how that Scenario ends? I'll give you a hint its not with Ayn Rands "Divine $ in the sky" Go ask the Romanov's they can tell you
Shooter, everything else expanding at a reasonable clip. The only part of the economy that is shrinking is government spending. Over all the economy shrank. How does this prove the tea party theory that European austerity is good?
We need greater demand. Greater demand is tied directly to how much money is in the hands of middle and lower class consumers. How does reducing the level of government purchasing which leads directly to the loss of middle class jobs increase demand?
Egypt was great when they were building pyramids. The Spanish were great when they were exploring the world. The Chinese when they were building giant canals and building their wall. England was great when they were building warships and an empire. In short nations that dare to be great are rewarded with strong economies.
Once every one of those civilizations pulled in their heels and stopped daring to be great they went into decline. America was great when we built the Hoover Dam, fought WWII and cold wars, and went to the moon. We have pulled in our heels since the end of the cold war. A lot of people say we are in decline. Maybe that is because we no longer dream the great national dream. Instead we are infected with the profoundly childish ideas of a Russian novelist.
Ah yes, the great god "demand". That would be "demand" as defined by people buying stuff, yes? And that requires giving people money to buy with, because business is so bad they can't get money themselves via employment, yes? And once people have money given to them, business will be good, yes?
So all this Govt spending is actually to make business profitable. But most of you people hate business and profit, while simultaneously trying to make it go. And Govt these days agrees with you.
So I ask you... what happens to a car when pushing the gas pedal while stepping on the brakes? No forward motion, which is exactly where we are now.
We must remember history so we don't repeat it...and so we don't provide shooter spank-bank material.
http://moelane.com/2012/06/09/troll-hunting-101/
Shooter
Liberals don't hate business or the idea of making money it's the idea that a very few people would be allowed to make ALL the money that we can't stand.
And yes Demand is everything because without it there is no need for supply even you are not that willfully stupid and the rich don't buy enough crap to keep the world moving. Your basic premise is that people won't work if there are Jobs available and that is just NOT true. I think your argument is just another case of projection.
Austerity doesn't just not work it makes things worse.
It's all been explained to The Hemorrhoid a long time ago. The shhit-for-brains can't or won't accept the explanation. When are you folks going to conclude that this is one student that is incapable of making it to the next level?
Now go ahead and scratch. It feels GOOD. And makes it go away, doesn't it?
@DWA
Yeah but like I said before if we don't we just turn into "Dittoheads" and I for one can't stand the idea of "living" in a permanent vegetative state
The problem is that it's all been explained before and H refuses to learn. He wants just what you give him and the forum is polluted because of it. It would be one thing if there was a good-faith discussion, but it is not and you know it. There comes a time when, after giving a person a chance, it is clear they are not interested in discussion; they are interested in disruption of a narrative they think is against their interests.
People who feed this troll are every bit as irritating and disruptive as the troll.
See but that's the thing...there is no one with whom to have a "Good faith Discussion"...I would gladly, Joyfully even trade him and the others for one person who is willing to make their case based on facts. Give me an alternative and I will take it but until then I don't see any choice but to try and shape discussion with the tools at hand...that said I do see your point and will try and keep my mole whacking to a minimum
The government made the roads that stuff moves on. The government provides the cops that keep armed robbers from stealing it right off the roads. The government educates the workers who make that stuff. It inspects it to keep our noble job creators from, say, adding melamene to powered milk to fake test results and eke out a few more cents profit. It puts out the fires in the plants and tries to keep employers from chaining the doors to the plant closed.
The thing that makes the blustering buffoonery of people like you so inconsequential is your inability grasp that economic activity is a consequence of civilization and civilization is a condition created and maintained by governments.
Shooter:
I promised myself I was done replying to you, but here I go getting sucked back in. Since your track record is that you ignore any evidence or explanatory comments, I would just suggest you refresh your memory as to what GDP is the measure of, and then use some basic critical thinking to determine how cutting government spending -- especially deficit spending -- would lower GDP. It's so basic that I suspect you are purposely ignoring what you know to be true in order to get some sort of thrill from trolling.
Jeebus, this must be what the Columbus felt like when tried to converse with the natives.
No, I'm saying people will work if jobs are available, it's that jobs won't be available until business thinks it can make money. Jobs are created BEFORE demand in most cases. Apple spent billions BEFORE people wanted the iPhone, the grocery store built the store and hired people BEFORE anyone demanded anything. Hotels are built BEFORE anyone wants a room. That's where new jobs come from not the couple extra people Target might need if business gets better.
I beg to differ, Blanks. If you build hotels before demand you end up with a lot of hotel rooms sitting empty. (See Las Vegas) Yes, there may be research and development (ie:Apple) to find the next best thing, but no one builds a grocery store where there are not customers.
Soooo, if the people in the middle class have no money, because they have no jobs, there is no reason to build a hotel, grocery store or any other kind of business because no one has the money to use them.
It's pretty simple. Constipation. Until the money starts flowing again (jobs that pay enough for people to afford to go to the hotel) we are stuck. The government has the means to create jobs by repairing infrastructure this country sorely needs. Solar power, roads, bridges, internet cables, etc are ways to improve our country AND provide hard working people with jobs. There is a whole generation out there that will tell you the story of interstate highways and Hoover dam and how the government did what private enterprise could not. This blind hatred for the government is just stupid.
WE THE PEOPLE IS the government. Only the plutocrats want to get rid of it so they can continue to steal from the rest of us.
Shooter are you stuck on stupid???
Supply does NOT generate demand! Business do not just go make stuff and hope someone buys it!!! (well with the possible exception of Pet rocks and well anything by Ronco...but that's beside the point)
When people have money they spend it!
GODAMN" Whack-a-mole
Yes, people make stuff and then try to sell it. That's exactly how it works. Why the hell do you think most businesses fail?
Yes, people build hotels and then try to sell the rooms. In Vegas they were late and wrong and are in the process of losing their shirts. Yes people won't build a grocery store in the middle of the desert but I've got a Trader Joe's, Harris Teeter, Whole Foods, and a Giant within blocks of each other.
How many different car brands are sold? Do you think there was demand for 37 kinds of minivan? Of course not, each manufacturer thinks they can make money carving out a niche in the market. Did people demand the Edsel, how about the Mustang? Yet one was a huge failure and the other was a raving success. But both had money invested and jobs created before anyone knew what would happen. My doctors office in DC has a row of food shops on the street and the turnover is horrendous. But every person that tried to make a business go signed a lease, bought equipment, hired people, and paid for advertising before the first person bought item one.
Try this exercise, what kind of business would each of you open if you were so inclined? Army surplus, pet store, pizza joint, Wedding shop? What would you have to do to start such a business? How would you know whether people would like your store, or you for that matter? Why would people want to shop there instead of your competitor? Why is Target a success and KMart not?
Folks you can deny the reality of how business works, but then I have to ask... If business is so easy why aren't you all business people, making all that lovely money you think just walks in the door? Hmmmm?
I believe what's wrong here is big data instead of long data. With long data both parties would acknowledge that part of the Obama deficits are costs built into the budget with Pres. Bush expenditure decisions. Likewise, the media always reports consumers represent 70% of the economy but addressed little attention to the 600,000 government employees laid off during the recession following the stimulus. There is next to NO discussion of layoffs due to automation and use of robots but plenty of discussion of offshoring jobs to China. Basically we have HUGE changes being made by multi-national corporations with little analysis of the long data just the immediate uptick, downtick.
It's Cruelty 101 to politicize the economy! Politico is hyping a political angle to sell its webpage to a wider audience, ironically enough, to generate more revenue for itself while sowing seeds of political conflict that need not be brought to bear!
Yes, our economy took a dip to a negative factor. Diagnose the cause and work to address it. If indeed the fix would demand more government spending, Politico should be shining a light on the opposition not allowing us to move further into the recovery by using the instrument of government! Instead it wants to sell product, and Politico has as of now dusted up a polemic of he said/he said beltway politics. And now that webrag wants us to watch as their published polemic helps produce a weakened economy!
Save America - Leave the Republicans at the Austerity Bus Stop, to walk home! -Kevo
The GOP wants a weaker economy. They would kill their own mothers to accomplish their goals for power and control of the government.
Right Karen. The Republicans want to make less money for however long it takes to get back into power. But that would contradict the meme that Republicans will anything for a buck. Oh well.
This is painfully obvious. To understand it, all you have to do is be slightly smarter than a hamster. Europe tried a more draconian form of austerity than the US did. The US has made a stronger recovery than Europe. Follow the bouncing ball, Politico.
Politico= # 1 Republican hack site
There is a reason they are featured on Mourning Joe every day@ 6:30
Greatest dispensers of conventional wisdom as seen through a right wing filter
^^^This^^^
Politico is Fox in sheep's clothing. They are the Villagers' Villagers. They are technically incompetent at economics and science. They are at least Exhibit B or C or D in the country's biggest scandal (without which we couldn't be having the problems we have): the press.
Politico is to be ignored.
Politico has about fifty writers, stereotyping and lumping them all together is doing exactly what wingnuts do. Roger Simon is a fine writer, for example. I click on that site about once a week, I admit it has a beltway both sides do it hogwash slant, but I don't think it's a cabal or worth ignoring as some sort of a statement.
You're so cute, Lebowsky DUD. And so precious with that little act of yours. Anybody with half a brain, a few weeks of freshman macro, and had read Politico would know just how awful these clowns are at painting an honest picture of reality. But not you. No sir. You'd rather pat yourself on the back over your "reasonableness," and that drafty ol' "open" mind of yours than come to a conclusion that requires being honest about things.
You wouldn't move if Roto-rooter was ready to drill up your little lamea$$.
Dysentary: Yup, I would indeed rather be reasonable and open. It beats the heck out of trying to project some sort of persona that trys to decide things for others and stereotypes. Not everyone here is a grumpy bloviator...
Except that you're not reasonable and open. All you are is someone that can't accept the obvious.
I'll assume you had post-secondary education. Let me guess: it wasn't in engineering, hard sciences, and probably not mathematics either.
Dependably Useless Democrat.
Still didn't get that d*mned unicorn, eh? Or, considering your posts, perhaps it's because there hasn't been any blood in the streets yet.
Either way, meh.
If they had an open hunting season on rich bastards, wonder what these politicians would do than? Probably than these rich bastards and politicians would be running out the door stumbling over themselves as they couldn’t get to work fast enough to finally get some proper gun regulations. The NRA probably would be all game for an open hunting season, considering the NRA and the Republicans have been so instrumental in wanting these deadly weapons on the streets and for people to be carrying guns with them at all times. Considering the Republicans, the rich bastards, religious extremists of hatred, and the NRA has made it an open hunting season on the middle class and poor, it would be only fair to have that same principle applied to these worthless deadbeats.
This really is an awesome opportunity for the Right.
Damage the economy, and use your "narrative" to get the compliant Beltway news machine to convince the public that there is a crisis that calls for more spending cuts (but not to "defense.") The further resulting damage can finally be used to prove that the Democrats can't be trusted to govern, an in 2014 and 2016 the PoG can finally take back both houses of Congress followed by the Presidency.
Happy times are here again!
Wow,
I was struck by how much that graph looks like music. Make the bottom line low C, and just use the key of C (simplicity - you could find a key that accounts for those "notes" that aren't centered in a space or on a line, but too much work for me this morning).
I tried playing on my flute and it sounds sort of like some refrain I've played in the past, but right now I can't remember what it was!
When the sequester hits in a few weeks, people will see what a taste of austerity is like. Repubs claim they want austerity; in fact, they now have a Ryan budget promise to balance the budget in just 10 years, which would mean far more austerity than the travesty of a "budget" he produced a couple of years ago. However, when given the actual opportunity to impose austerity cuts, they shy away and want nothing to do with it. Paul Ryan refused to vote for the Simpson-Bowles plan that he himself touted, and repubs are saying that the defense cuts in the sequester are too steep and will cost jobs. In other words, they like to talk a big game, but even these mental midgets see that if austerity plans are actually implemented, it will cause severe damage to the economy, just as it has done in places like the UK, Spain, Greece and Ireland. The only bright spot for them in the sequester situation is that they can use the fig leaf that they didn't want it to happen, and if their propaganda machine on Faux Noise does a good job, may even be able to convince low-information voters that the whole sequester is Obama's fault. Never underestimate the stupidity of the American people.
It does not make sense to continue spending when we are so deeply, almost to the point of no return, in debt. There will be pain now, or worse pain later. Spending is spending, and debt is debt. No matter what your intentions are or what you choose to spend money on, the debt continues to grow. Dems don't seem to want to fix that problem! Spin it anyway you wish, but spending has to be curtailed in order to reduce the debt. When you spend more than you take in, debt grows. Economics 101.
Apparently you never went further than economics 101, or you would know that you can't equate government spending with individual spending. We have enough examples to fill an encyclopedia that austerity causes depression-level catastrophe to an economy. Would you like another Depression? The folks in Spain, with 26% unemployment, would say no, but they sure have one now. Nor are they alone. And exactly how did we get out of the Great Depression? Government spending on programs like infrastructure, and of course WWII helped in that regard also. Tea Party economics is an oxymoron, and the people who follow it are just plain morons who refuse to look at numerous real world examples of the results of following that style of economics.
I can hear John Boehner's voice:
"This is a direct result of the Presidents failed economic policies."
*sigh*
To all of those who think that Government doesn't do anything that supports the economy, that government doesn't "sell" anything, please remember that businesses must build buildings, install communication systems and so on before they can sell anything. We've discovered that there are some things that are best, and most economically, done by banding together and doing collectively - that is by using government to do certain things. Governments build roads, they provide security, they do research that underpins the private sector, they educate the workforce, and on and on. There are many things which we the people have in the past decided are best accomplished by our government. Government isn't our enemy, it's us. And almost everything that governments do are things that we the people have demanded that they do.
The people who work in government also aren't our enemies. These are smart, hard-working people who are, for the most part, sincerely interested in going good for our country.
All of which isn't to say that there aren't programs that have outlived their usefulness, that we shouldn't continue to economize, to find ways to do things better and more economically.