Q1 GDP Revised Down to Negative Growth; Old Man Winter Blamed Once Again

Like Narnia under the White Witch, Obama’s economy is always winter, but never Christmas. First-quarter GDP was just revised downward to negative 0.7 percent “growth” from the original anemic report of 0.2 percent from the Commerce Department.

Naturally, the same media that cheerfully relayed Obama’s ludicrous claims of credit for every fitful scrap of good GDP and employment news suddenly decided his policies have nothing whatsoever to do with the economy. The usual suspect, Old Man Winter, was dragged from his cell and paraded through the town square. The awesome power of Obamanomics was once again ambushed by the the climate, which the President claims is getting unbearably hotter every time he burns a zillion gallons of jet fuel to fly out to a photo-op, ramble on about science he understands no better than economics, and demand more money and power for his war against global warming.

It’s so hideously unfair to Obama that winters became cold for the first time in American history after he took office. How could his brilliant plans possibly have taken account of such baffling natural forces? Are even the lowest of low-information voters getting tired of hearing that a high-tech economy is somehow incapable of dealing with snow, year after year?

Believe it or not, one of the toughest takes on the horrific new GDP report comes from the New York Timeswhich dismisses the “winter” excuse as a major factor in the slowdown:

While statistical quirks and one-time factors like wintry weather in some parts of the country played a role, as did a work slowdown at West Coast ports, the lackluster report for January, February and March underscores the American economy’s seeming inability to generate much momentum.

Much of the revision was spurred by fresh data showing businesses added to inventories at a slower pace than first estimated, while net exports fell slightly more than first thought. A sharp pullback in energy exploration in the wake of falling oil prices is also putting pressure on business investment.

As always, we’re advised not to read too much into one lousy report:

Most experts had expected Friday’s data to show a contraction in the first quarter, and virtually no mainstream economists believe the country is on the verge of a recession. Still, the weakness is a reason the Federal Reserve is not expected to raise short-term interest rates until the second half of 2015, after speculation that a June increase was possible.

Consumers, who generate roughly two-thirds of growth, have also been less willing to open their wallets, despite the windfall provided by lower gasoline prices. Personal consumption rose by 1.8 percent last quarter, down from 4.4 percent in late 2014.

After the economy grew at an annual rate of nearly 5 percent in the spring and summer of 2014, some experts concluded that the economy had found its footing and predicted that a healthier, sustained growth rate of near 3 percent was finally at hand.

The new data for the first quarter, and signs of only a tepid rebound in the current, second quarter of 2015, are now forcing some economists to rethink earlier assumptions.

Let me shorten that for you: most experts have no idea what’s going on, and they’ve been consistently wrong in predicting good news for the Obama economy.

This is not some baffling mystery. The political and media pressure to agree with the Obama machine’s political narratives is enormous. Some of the Administration’s happy-days-are-here-again reports have been rather fishy, dissolving in a foul-smelling cloud of downward revisions long after the smiley-face headlines were published. (I tend to think charges that all reports are cooked by political chefs in various agencies are excessive, and the constant revisions are largely a result of our voracious news cycle demanding numbers before the data has been fully evaluated. However, the fact that all the wiggle room in these reports wiggles in the same direction, and the subsequent revisions are so often for the worse, is growing difficult to ignore.)

One of the important lessons we should take away from this walkback marathon is that central planners can’t predict the economy as well as they claim. That seems like such an obvious truth at this point… and yet, far too many Americans are willing to accept titanic government regulatory schemes and spending programs based on the wildly exaggerated ability of politicians and bureaucrats to predict their effects.

The hard, cold truth is that the people who inflicted ObamaCare on us had no clue about most of its ramifications (and lied through their teeth about the ones they did understand.) Likewise for the Dodd-Frank financial regulations, which has tortured our financial systems in ways the authors did not predict, or vowed would never happen.

Another way to interpret this perpetual excuse-making about cold winters and unpredictable variables is that Obama’s central-planning gurus didn’t leave the free-market economy with enough strength and freedom of action to deal with setbacks. The crushing burden of carrying our insanely expensive, corrupt, incompetent central government leaves businesses with insufficient capital and limited options to either exploit opportunity, or prepare for reversals.

When they do exploit opportunity successfully, they’re demonized and taxed by those who don’t understand that some of today’s windfall is going to be consumed by tomorrow’s setbacks. Politicians don’t think that way – they take exaggerated credit for every fleeting victory, while dodging responsibility for failure. Sacrificing $10 billion in prosperity next year for $1 billion in short-term “accomplishments” is madness to the businessman… but a no-brainer to politicians. (Cash for Clunkers, anyone?) Almost everything they do is predicated on their confidence that other people will pay the bills for their achievements later.

In fact, the adversaries who tried to talk sense while Big Government disasters are created are more likely to face the wrath of angry dependents when those schemes fall apart. Case in point: the current mania for blaming stingy Republicans for the impending collapse of the ObamaCare subsidy scheme they had absolutely nothing to do with creating.

We’ve had more than enough of our parasitic political class – so eager to leverage their positions into vast unearned fortunes, by turning political influence into the most valuable “resource” in the land! – treating investors, entrepreneurs, and CEOs like they’re the parasites. It’s painfully obvious that our politicians and their absurdly over-funded agencies cannot predict the behavior of the economy, or control it. Their promises to the contrary are largely cover for handing bundles of our money over to their cronies, and collecting plump commissions paid as “speaking fees,” “donations,” and lucrative jobs in consulting or media for useful politicians and their families.

It’s repulsive, it’s ineffective, and it has to stop. We can do better than what we’re seeing right now. We’ll have more jobs if the private sector is left with the freedom and funding to create them, while our society delivers proper financial and cultural incentives to seek employment.

Our economy will be stronger after we burn the swollen ticks of crony capitalism and aristocratic rulers from America’s brawny arms. No one entity can design a stronger economy, but a few hundred million Americans will find one by accident, if they’re left alone to compete with each other. As a bonus, we won’t have to sit through summer after summer of insults to our intelligence from desperate pols, and their media courtiers, pretending to have noticed for the very first time that it snows up North in the winter.


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