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According to the Commerce Department’s newest estimates, economic growth in America has been less than was assumed based on previous data:
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 2010, (that is, from the third quarter to the fourth quarter), according to the “second” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.6 percent.
The GDP estimates released today are based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 3.2 percent.
This is bad news for President Obama, whose re-election prospects are going to rely heavily on decent economic recovery. But, in isolation, slow growth almost two years from the election shouldn’t be a big problem.
Potentially, though, if these previous overly optimistic economic assumptions played a role in Obama’s recent decision to embrace pro-austerity cuts, this could create real long-term problems. If Obama assumed the economy was growing steadily, he might have thought it could easily handle some immediate cuts that are basically just PR stunts to show how “serious” Obama is about the deficit. Given that the economy isn’t as strong, this, as well as previously sought immediate cuts, are going to be more damaging.
If this did happen, it wouldn’t be the first time the Obama administration made really bad decisions on the basis of overly optimistic economic assumptions. The administration’s very public claim about how the too small stimulus bill was supposed to assure unemployment only grow to 8 percent instead of nearly 10 percent being the prime example.
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Perhaps, though Obama has made nothing but bad decisions so far.
This is nothing more than a product of cooking the books.
I’d be one to guess that most of the P in GDP has been in the banking sector.
That is nothing more than QE2 funny money to make the whole rotten banking sector ‘solvent’ again.
There is no jobs=no demand for products other than food and gas.
They have been lying about ‘inflation’ because they don’t want to be dishing out COLAs for SS payments.
They have been lying about unemployment and the 99ers have totally disappeared from any consciousness.
It has been interesting how speculation in commodities has been reigned in lately since the mideast combustion.
I think the moneychangers realized they twisted the wrong knife.
The President has ‘decided’ the way he was told.
The resolution of economic data at periodicity of under a year is extremely coarse. Big movements will reveal themselves, but the smaller ones are lost in the noise and are always being revised. A lot of wishful thinking went into their interpretation at the White House. This is true of all White Houses, so the Obama administration does not stand out from the crowd. The basic truths are in the large structural aggregates, which give good medium-term projections based on the standard relations of consumption to income, inventories to sales, and the short-term inertia of investment spending (need to complete projects, and the like). Krugman pointed out long ago the criminal neglect of these basic parameters in making the stimulus package too low by half. The tax cuts have the same flaw: they give very little demand bang for the buck, and lay up problems for the future (as we are seeing).
Hope is no substitute for analysis.
Why do we believe anything that the Feds report?
They tell us there is no real inflation, but do not tell us why a large tomato now costs $3.00.
They are corrupt and they are liars.
Y’know, for as astute a politician as Obama is reputed to be, he seems to have glaringly overlooked a key component in his hope for re-election. And that is jobs. You would have thought that getting a really good jobs bill or programs going early on would have been the highest priority. Instead, there appears to be precious little effort in this area. Not only from Obama, but the Democrats in general.
I don’t get it. Am I missing something? Did I overlook something? Jobs would have been a winning issue to press at all times. Yet it’s crickets.
There is a non-commerce economic sector, 17% of national employment plus state and local government spending — and it is down.
news report:
O is the front man for a bunch of MOTU who are destroying the middle classes and stealing their wealth. His job is to be the public smiley face of guys like Jamie and Lloyd and the Koch Brothers. He works hard at seeming plausible and still gives a nice sounding speech from time to time. But he knew from the beginning that his shrivelled up little stimulus would not result in recovery for Main Street. O doesn’t want recovery for Main Street. He wants serfs.
Yep.
Jon, you’re making a mountain out of a mole hill. There is no statistical diff bet 3.2% and 2.8% growth in GDP and every economist who works for the USG knows that.
It doesn’t take a genius to know that the statistics regarding our “recovery” are pure fantasy.
It’s called a depression. Capitalism failed (again) and the essence of that failure has been ignored. Indeed it is being replicated on a daily basis by the same perps who caved the system to begin with… and no one knows that better than Obama.
Obama is a fraud.
Bad economic data did not lead Obama to make bad decisions. Obama is a right-wing, conservative disciple of Robert Rubin, Pete Peterson, etc. and he was funded from early on by conservative financial and other big business interests. His cabinet and other appointees reflect this bias.
US jobs have been overlooked but the US government is enthusiastically helping corporations connect with foreign firms and work forces, the latter being trained with US taxpayer funds through USAID.
What you missed (if I may) is that the D’s will blame it on the R’s, via judicious message shaping. They have experts who can do it.
Not buying it
Even assuming the overly optimistic numbers, there simply was no room for austerity’s strangling effect. The recovery is fragile in any case, and there is that long-term structural erosion depressing the middle class and its demand, that were masked by an era of using home equity as an ATM that is gone wiht the wind, and will never come back.
We need the reversal of that long-term erosion of the middle class, and we need massive stimulus until that erosion can be reversed. We need the obverse of austerity. To pay for it all, and to prevent further shocks, we need confiscatory tax rates on people whose excess wealth now goes to inflating the latest Wall Street bubble.
IMO what you are missing is that the only opinions that matter to the politicians are those of the rich.
The stimulus is by the US government and its corporate friends, applied overseas. With your forbearance I will post a couple of representative examples of US involvement in far-off Central Asia. Just remember this is just a small part of the global US effort to export US investments and jobs.
jon, this assumes obama didn’t do exactly what he wanted to do in the first place, don’t forget, he has proven himself a corporatist
he didn’t use bad statistics to assume he could impliment “austerity programs” that we know as a fact destroy the middle class, and he didn’t use them to buy voters
the people who think the government needs to cut it’s services are not going to vote for obama no matter what he does to appease them
and he knows that, if he doesn’t know that then he is a moron
What played a role in President Chickenshits embrace of austerity is his sociopathic disdain for working people and his sychopantic adoration of the rich elite.
US Embassy & USAID involvement
American Business and Government:
Partners in Central Asia
Evan A. Feigenbaum
Deputy Assistant Secretary of State
South and Central Asian Affairs
Washington, DC
March 20, 2007
Wherever I go in this job, whether to Central Asia, in this country, or elsewhere, I try to talk to business, especially American business, about what we are doing in this part of the world.
And so we in government need to talk to you, to listen to your concerns, and, I think, to commend you for your important role in the emergence of one of the world’s most vital regions.
We are trying to help Central Asians forge some new connections to the global economy: to trade and investment opportunities, cross-border energy projects, additional deep-water ports, and the enormous possibilities of the global market.
American business plays a key role in sustaining long-term growth in the global economy, creating jobs, and improving standards of living around the world.
Our U.S. government agenda for reform tracks neatly with elements of the U.S. business agenda for reform. . .
In Kazakhstan, for instance, our Agency for International Development (USAID) works with local business associations and local and regional government to identify barriers to business, and then works together to overcome them.
Beyond microeconomic reform, we also want to help Central Asian partners create the macroeconomic conditions to assure more foreign investment.
http://kazakhstan.usembassy.gov/feigenbaum_march07.html
Overseas investment promotion
Kazakhstan
U.S. Investment forum 2010
Nov 8-9, New York
2009 event programme
U.S. Investment and Trade Opportunities in Kazakhstan
Executive briefing and panel discussion (each speaker will address the Forum for 10 minutes, followed by questions and discussion).
Moderated by William Veale:
•William Veale, Executive Director, U.S.-Kazakhstan Business Association
•Paul Dyck, Cove Strategies*
•Eric Stewart, Senior International Advisor, U.S. Chamber of Commerce
•Michael Feldman, Director for South and Central Asia, Office of the U.S. Trade Representative
•Kazakhstan-U.S. Public-Private Economic Partnership Initiative: Kenneth Mack, President, American Chamber of Commerce in Kazakhstan, et al
*Cove Strategies
Matthew A. Schlapp
Principal, co-founder
Matt Schlapp has nearly twenty years of government and corporate experience. Most recently, he served as Vice President of Federal Affairs at Koch Companies Public Sector, LLC where he directed the major federal strategies for it and its subsidiaries with a focus on environmental and energy policies, financial markets, legal reform, and international and domestic tax issues. Prior to joining Koch, Schlapp was the Deputy Assistant to the President and the President’s Political Director.
That depends entirely on who one asks.
Obama’s decisions have been great for the oligarchs who ran him for office.
They’ve just been bad for the public.
I’d say this article makes the faulty assumption that Obama works to benefit the people. A less naive and more realistic headline might have read “Did Obama Release Bad Economic Data To Sell Decisions That Favor The Rich Over The Rest Of Us?”
And that’s precisely why “Hope” was Obama’s campaign slogan.
They don’t care about the unemployed as they think they still number too few and don’t vote anyway.
Jon.the Febs put forth bad economic data all the time…Just take a look at how many times after they publish unemployment data or real estate data they come back after 3 weeks & issue corrections after the fact.
Cuz it’s all done to cater to Wall Street….they issue bogus numbers so Wall street can keep the trickery going.
But all official US economic data is ludicrous and corrupt. Even in these “revised” figures, most if not all of the “growth” is infact faultily guaged price inflation on all goods and services.
No rule of law. Massive corruption. Lies and propaganda. The American dream!
Even with good economic data Obama would have made the wrong decision. When will the unions realize they’ve been chumped by this Trojan Horse and get behind a real progressive primary challenger?
This is like saying Kenny Boy Lay was the victim of bad accounting by his staff – sorry, it doesn’t work that way. US economic data is bad because that’s how Obama wants it quicker than you can say Unemployment Rate or Inflation Rate.
I don’t think that Obama is an astute politician. His fumbles,mumbles,and his lack of spine leads me to believe his main concern is re-election and to hell with progressives whom he feels he doesn’t need.
Obama is over his head and his judgement and demeanor remain timid and non controversial. His mixed messages are typical of his wanting to cover all bases, and he clearly hasn’t done anything he promised to do.
There is no vision,courage, or fight in this wan and opportunistic president.
It’s not just the unions that have been chumped by Obama.
On women’s right to choose where has he been? He has been a disappointment
on all the progressive issues and has refused to confront those destroying Planned Parenthood and doing end runs around RoevWade.
I cannot vote for him again.
Obamas claims can no longer be trusted. He has been wishy washy on just about every issue.
Heck of a job Barry! Speaking of the economy and the deficit issue, you forgot to tell the American people you and your corporate buddies are offshoring all of the jobs along with their corporate profits to low wage and
lowno tax countries.Hopey changey means nothing, but Obama used this kind of jingoism to young idealistic voters desperate for real change.
It got Obama elected, but there is little hope left.
Team Obama has shown contempt for progressives as they feel they don’t need them, but need Wall St & Co far more.
And talk about inexperience? It’s glaring.
LOL!
No, that’s an excuse, a cover. Bad beliefs in economics led Obama to continually make bad decisions. That, or he is simply a very willing and crafty tool of the Oligarchy. I tend to think the guy is kinda dumb and lacks real empathy for others, but is not sadistic about it like Bush and so many other Republicans. He’s more like a high level corporate manager/director rather than a real leader with real vision. Not mean, but not caring except for his own cazreer and how to please his boss. Just trying to follow the agenda of the structure in place, ignorant of how much power he really has to change it and reform the system.
If only Obama had a brain… and a heart… and courage. If only…
Obama ought to be capable of getting the real numbers from his appointees. He can, just for openers, tell them to produce the real economic figures, not the ones they want people to see, within 24 hours – well, it’s a weekend, make it 48 – or they can resign. Immediately.
Of course, then he have to make good, and I don’t see him having that kind of guts….
Okay, I got the message. Nobody cares that the US is exporting jobs.
Well done bigchin. Concise and correct.
Obama has knowingly surrounded himself with known liars, failed regulators and economic hitmen.
It would seem more than a little insincere for him to suddenly recognize that he has been misled when the folks he hires have a proven track record of misleading.
The numbers coming out of Washington are what team Obama wants them to be. 2.6… 3.2… 5.8… pick a number, any will do so long as it drives the policy agenda.