October 27, 2012
Expect more ‘good news’ just before the election
The Obama administration is hailing the latest economic growth figures as evidence things are getting better. They’re not. As with recent unemployment data, these numbers don’t pass the smell test. In your guts you know they’re nuts.
The Commerce Department said Friday the economy grew at a sluggish 2 percent rate in the third quarter. This may be higher than the anemic 1.3 percent in the previous quarter, but that doesn’t constitute evidence of a booming economy. In 1992, the economy grew at 2.7 percent in the third quarter, and the Bill Clinton campaign denounced that meager performance as one of the weakest economic recoveries since World War II. By the same measure, our current 2 percent recovery must take the title of the worst ever.
The Obama campaign insists the gross domestic product (GDP) data are “more evidence that our economy continues to come back from the worst recession since the Great Depression under President Obama’s leadership.” That’s interesting, considering growth is far below what the White House promised. In his first budget submission, Mr. Obama projected we’d be expanding at a 6.3 percent rate by now. The number the administration sees as evidence of success actually confirms its failure. A third of the GDP growth, and all of the difference from last quarter, came through increased government spending.
It’s just one more “good news” statistic that turns out to be flaky. The weekly first-time unemployment numbers released Oct. 6 showed a remarkable drop to 342,000. This generated hopeful headlines — until people learned the reason for the dip was that California’s numbers weren’t included. The administration even defended the good news number. By the following week, however, the figures were corrected and jobless claims soared to 392,000. That wasn’t a good news day for the White House.
September’s monthly unemployment number showed an unexpected and unexplained drop from 8.1 percent to 7.8 percent, but many noticed the numbers simply didn’t add up. Job growth had slowed that month, but the official unemployment rate still plunged more than it had in years. It turned out the suspicious figure was due more to clever accounting than a realistic appraisal of the job market. The government’s U-6 unemployment rate, which factors out low-paying, part-time gigs, stayed high at 14.7 percent, a much more accurate reflection of the miserable situation most Americans have to contend with.
There’s one more big number on the way. On Nov. 2, the Friday before the election, the Bureau of Labor Statistics will release the official October 2012 unemployment number. There is no empirical reason to believe the jobless situation has improved, but based on past experience, a rosy number would likely provide the sagging Obama campaign a boost in the final weekend of the campaign. Will it be 7.5 percent? Or 7.3 percent? Maybe the Obama team will simply go for it and see what headlines they get from 6.9 percent. If you are going to lie, might as well lie big.
The Washington Times
- Romney Says Obama Fails on Economy as Storm Cuts Campaign (bloomberg.com)
- Doing the math: Obama recovery still the worst in decades (hotair.com)
- Stimulus Back in Obama’s Vocabulary After Year on Don’t-Say List (bloomberg.com)
- Romney Criticizes Obama on Economy Even as Growth Picks Up – Bloomberg (bloomberg.com)