Wednesday morning the Bureau of Economic Analysis released its Gross Domestic Product estimate for the second quarter of 2013. Though it will surely be revised up or down in the coming months, the number is 1.7%. In the first quarter of this year the GDP was 1.1%, revised down from initial estimates that were as high as 2.5%. The last quarter of 2012 saw the GDP grow only 0.1%.
The result of today’s GDP announcement has resulted in almost uniformly positive headlines.
Business Insider went with all caps: GDP CRUSHES EXPECTATIONS. Joseph Wiesenthal, executive editor of Business Insider, was not only re-tweeting those using the word “robust,” but in a fit of anti-science excitement, touted the notoriously unreliable ADP job growth estimates as more important than the GDP.
Wall Street Journal: US Economy Grows Faster Than Expected
Media types are just as excited on Twitter. All we’re hearing about is “beats expectations” and “growth.”
CNN’s spin was especially ingenious, making it look as though cutting a federal budget that has run trillion dollar deficits automatically means negative economic growth: U.S. economy pulls through federal budget cuts. What CNN fails to understand is that an American economy that relies on government spending is an economy destined to collapse.
At any rate, this is a fair overview of how the the mainstream media is cheerleading today’s GDP estimate.
Here are four things the media are not telling you.
1: GDP Growth of 1.7% Stinks –In order to artificially prop up President Obama, the media have created what I call “The Obama Curve.” In order to make his failed economic recovery look good, the media have — for the first time in my lifetime — dumbed down what was once considered acceptable job and GDP growth to practically zero.
Just one example is this headline from 2002, wherein the New York Times expressed disappointment over an unemployment rate that dropped from 5.9% to 5.7% under Bush.
The same is true of today’s 1.7% GDP. Historically, not only is that a standalone terrible number that shows our economy is hardly growing at all; it is especially dismal when we’re supposed to be coming out of a recession.
2. Compared to 2011 and 2012, Our GDP Is Going Backwards: In order to pull off The Obama Curve, the media have to remove almost all context from their reporting. For example, in order to manufacture positive headlines for Obama today, the context is only “expectations.” Since a dismal 1.7% beat even more dismal “expectations,” the news can be manufactured into “brisk” and “robust.”
Below, I’m going to go back further in history to prove that lie, but for now you need only go back two years into Obama’s own term to understand how awful 1.7% is.
For four quarters, between the second quarter of 2011 through the first quarter of 2012, the quarterly GDP reached 3.2%, 1.4%, 4.9%, and 3.7%. When you are coming out of a recession, those are not great numbers, but they are at least acceptable. Since then, however, the bottom has fallen out.
The media won’t, though, even look at or compare today’s numbers to Obama’s own track record for fear it might turn into a negative news cycle.
3. We Are Living Through the Worst Four Years of GDP Growth In History – Under no condition is a 1.7% GDP growth acceptable, especially when we are supposed to be coming out of a recession. But the average GDP growth under Obama is even more discouraging. This is proven by looking back sixty years to what the American economy used to be capable of:
- 1948-57: 3.80%
- 1958-67: 4.28%
- 1968-77: 3.18%
- 1978-87: 3.15%
- 1988-97: 3.05%
- 1998-2007: 2.99%
- 2008-2013: 0.73%
This chart does not include today’s numbers, but 1.7% would do next to nothing to improve that 0.73% number.
Here is an important point for those who will argue Obama is not responsible for the recession he inherited:
Even if 2008 (-0.3%) and 2009’s (-3.1%) negative annual GDP percentages are dropped (something undone for the other periods) and only the 2010-13 period is averaged, the result is just 1.95% – still over a full percentage point below the previous decade’s.
4. Reagan Also Inherited a Dead Economy and We Roared Out of That Recession – One of the bald-faced lies told by Democrats and their media is that Obama inherited the worst economy since the Great Depression. This rhetorical trick is used to excuse Obama’s dismal “recovery.” The truth is that when Reagan assumed office in 1981, the economy he inherited was in many ways worse. Unemployment, inflation, and interest rates were higher, and after a decade of stagnation, the American people had lost hope.
If anything, these inherited recessions are only separated by two months. Reagan dealt with a 16-month recession, Obama an 18-month.
The approach Reagan and Obama took towards their economic inherited disasters are case studies in polar opposites. Reagan cut taxes across the board, cut regulations, and in general got government out of the way of the American people’s ingenuity.
Obama, on the other hand, micro-managed the economy with his failed $800 billion stimulus, passed onerous regulations like Dodd Frank and ObamaCare, and never stopped hurling rhetoric about raising taxes and increasing regulations.
The results have been as polar opposite as the approach. The economy boomed under Reagan. There were months when close to a million private sector jobs were created. But since we’re talking about the GDP, let’s stick to that.
When a recovery is managed correctly, this is what the GDP numbers look like:
In the fourth quarter of 1982, the economy grew at a slow 0.3 percent rate. Starting in 1983 the quarterly growth rates were 5.1 percent, 9.3 percent, 8.1 percent and 8.5 percent, respectively. The 8 percent-plus growth rate continued into the first two quarters of 1984, before slowing to the 3.5 to 4 percent range. National Bureau of Economic Research data show the economic expansion that started in the fourth quarter of 1982 lasted for 92 months, until the next recession started in July 1990. …
The economy during President Reagan’s second term exhibited steady economic growth with a 3.7 percent annual average. The GDP growth rates for the years 1985 to 1988 were 4.1 percent, 3.5 percent, 3.2 percent and 4.1 percent. Quarterly growth rates ranged from a low of 1.6 percent to a high of 7 percent. Of the 16 calendar quarters during the four-year period, nine quarters had GDP growth between 3.1 and 5.5 percent.
Because of Obama’s poor economic philosophy and policies, we are suffering (needlessly) through the worst “recovery” in history. To cover this fact up, the American media remove all context from their reporting and have created The Obama Curve.
Only through the use of propaganda can the media claim that 1.7% is anything other than devastating for the millions of Americans entering their fifth year of job growth that doesn’t keep up with population growth, falling wages, and a GDP going the wrong way.
The worst part of this is that The Obama Curve perpetuates this misery because no media pressure is put on the president to do better.
After all, his economy is “robust” and “brisk.”
Follow John Nolte on Twitter @NolteNC