Second quarter GDP numbers have once again summoned Mighty Krugthulhu from the depths, beard tentacles of sanity clutching charts for all to behold. How’d we do?
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 1.5 percent in the second quarter of 2012, (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.0 percent.
Better than having our faces kicked in, I guess. Kroog comes along with his comprehensible glare and injects reason into your mind.
Here’s a chart. It shows changes since the second quarter of 2009, which was both the bottom of the recession and the earliest point at which you can plausibly say that Obama had any influence on actual policy. I show nonresidential fixed investment — basically business investment — and government purchases of goods and services:
Business investment has actually gone up a lot; maybe you think it should have gone up even more, but it’s not the heart of the problem. On the other hand, we’ve had a lot of cutbacks in government — mainly at the state and local level, but federal aid could have avoided that.
This isn’t a picture of an economy hobbled by Big Government; it’s a picture of an economy hobbled by premature austerity.
Like I keep saying, the economy is pretty much doing what the Republicans say the economy should be doing, that is cut government spending (down $120 billion or so) and let the private sector do its invisible hand thing (up about twice that). The result: exactly what you would expect, a mehburger GDP report because we’re, you know, wiping out a whole bunch of private sector economic activity stimulus by wrecking government spending. This is the stated GOP plan in action right now as we speak, and gosh it kind of sucks.
You think we would then ramp up government spending, but Republicans are all insane and need to have anvils dropped on them.
RossInDetroit, Rational Subjectivist
Read more Krugman:
http://www.nytimes.com/2012/07/27/opinion/money-for-nothing.html
From yesterday, on why we should take the markets’ basically free money and invest in infrastructure, among other things.
Mike Lamb
In before knockabout…
owlbear1
The Republican answer:
http://www.usatoday.com/news/nation/story/2012-07-27/drought-lawn-painting/56534862/1?
danimal
@owlbear1: So that’s why the grass is always greener in the red states. Gotcha.
Rob in CT
This is the point the commentariat over at Outside the Beltway keeps trying to make to Doug Macontis:
This is what you want, libertarians! Government is cutting back (yes, mostly at the local/state level). It’s austerity. Fairly mild austerity, but austerity nonetheless.
And yet, he puts up post after post about how poorly the economy is doing, with no self-reflection at all. It’s pretty amazing.
burnspbesq
@RossInDetroit, Rational Subjectivist:
This, absobygodlutely. Investors are in effect paying the United States Treasury a fee to hold their money for safekeeping. It’s impossible to conceptualize a better set of conditions for borrowing a couple of trillion and spending it on infrastructure.
butler
@RossInDetroit, Rational Subjectivist: From yesterday… and last week… and last month… and his book…
Maybe someday KThug’s advice will finally be heeded. One can dream.
ding dong
Republicxxts are s holz and I hope they find out karma is a beeyotch.
gene108
If the GOP gets control of the WH, Senate and retains control of the House, look for government spending to sky rocket, because they know their butts are on the line with most voters, who care about jobs and their well being.
Sure a bunch of it will got to further crony capitalism, but the money will start to flow again.
PeakVT
Over the next couple of decades, the 2010 victory by Republicans will cost this country trillions in lost income – hundreds of billions on an annual basis – by causing the loss of existing human capital among the unemployed, and by failing to properly develop human capital among today’s children. It’s just a tragically stupid situation.
Hill Dweller
State level austerity has been devastating to the economy. The reduction in public sector employment(mostly in Republican controlled states) is insane. If public sector employment had mirrored the Reagan recession, we’d be near 7% unemployment.
The Obama campaign needs to be shouting that from the rooftops.
burnspbesq
@owlbear1:
As usual, the Republican answer ignores the question.
Xeriscape, bitches. If you have to water it, you shouldn’t have it.
Also too, golf courses should have to pay the true marginal cost of all the water they use.
Davis X. Machina
What can one man with a beard do when the House majority, a Senate Minority armed with the filibuster, and and electorate — or enough of it to win at least low-turnout mid-term elections by blow-out margins — believe that the optimum number of government-sector employees is ‘zero’?
The Obama campaign needs to be shouting that from the rooftops.
Why? People hate government workers. Public safety, maybe, gets a pass. Sometimes. Everyone else? Unaccountable, pension-chasing civil service drones.
Chris Christie could have ridden this to the White House. “The fighting leader America needs to walk point in the war against the nation’s real enemies — public employees.’ He should have pulled the trigger.
BGinCHI
Can someone please fire on Fort Sumter?
Let the south plus FL, TX, and AZ go. That frees us of the red state welfare and crazy politicians who make having nice things impossible.
Next step: Progress!
PeakVT
@gene108: I think they’re beyond that kind of self-preservation. Too many are true believers, instead of cynical careerists. And look what the superficially more rational Tories did in the UK.
Hill Dweller
@Davis X. Machina: They hate the amorphous ‘government’. But if Obama points out it is fireman, cops and teachers, people are far more willing to listen.
Moreover, if they use the previous three recessions, all under Republican presidents, to illustrate the importance public employment plays in recovery, it could gain some traction, IMO.
foodriots
First of all I’m not about to argue with KThug over macro economics. But I will argue with him about politics and agendas. Don’t forget Kthug still has his agenda to prove himself right that we should have nationalized the banks and that Obama never did enough (by waving his magical dictator wand) even though he only managed to get what he did because of one Republican senator (Specter) flipping to try save his own skin (which didn’t work out so well for him).
Also, private businesses employ orders of magnitude more people than gov’t. Gov’t employs somewhere around 30Million I think. That includes local, state, federal and misc other. There are a heck of a lot more private sector employees.
It’s quite typical of any recovery that gov’t lags private hiring. I’ll bet if Kthug were so inclined he could prove this recovery isn’t that different than other recoveries in terms of private vs gov’t hiring.
But of course that would not help to serve his agenda.
Davis X. Machina
@Hill Dweller: I’m a public school teacher. I lie to strangers, when I don’t have time for a fight, about what I do. It’s gotten that bad.
gene108
@Hill Dweller:
That would involve:
(a) Math – percentage change is a difficult concept to put into a sound bite; and
(b) Republicans don’t give a damn about any Republican President in the last 60 years, except for Reagan.
Eisenhower, Nixon, Ford, Bush, Sr. and Bush, Jr. were all failures – for various reasons – whose activities as President should be discounted or ignored, when viewed through the lens of the modern Tea-Party-True-Conservative-revolution, since their activities did not contribute to the Revolution.
Reagan, despite raising taxes and expanding the size of government, must only be viewed through the Revolutionary Lens because he allowed the seeds of the Revolution to be planted and tended and that is all that needs to be remembered about President Reagan, the last real President America has had.
SiubhanDuinne
O/T, but some Juicers may find this interesting (just posted at the AJC:
CNN chief Walton to leave by end of year
CNN Chief Jim Walton said Friday he is leaving the struggling cable network by the end of the year.
Walton joined CNN in 1981 and became president of CNN Worldwide 10 years ago, helping to build the network into a profitable news organization in the United States and internationally.
The ratings for the Atlanta-based cable channel have been suffering, however, with CNN’s U.S. network reporting its worst-ever ratings for a second quarter. The network is now in third place behind bitter rival Fox News as well as MSNBC.
CNN has made multiple changes to its morning show and prime-time lineup in order to bring back and keep viewers
Walton made the announcement Friday morning in a note to staffers.
“CNN needs new thinking. That starts with a new leader who brings a different perspective, different experiences and a new plan, one who will build on our great foundation and will commit to seeing it through. And I’m ready for a change. I have interests to explore and I want to give myself time to do it,” Walton wrote.
Walton said Turner Broadcasting Chief Executive Officer Phil Kent has asked him to stay through the end of the year.
“His vision has modernized and globalized our legacy news brand, enhanced CNN’s journalistic standing, positioned it at the forefront of multi-platform branded news content and challenged the organization to think bigger, reach further and do better,” Kent said in a statement.
Belafon (formerly anonevent)
@foodriots:
And that would be true if government were relying entirely on taxes to pay their employees. The same thing is true about private hiring lags people purchasing products: They aren’t going to hire unless the money to pay the employees. The problem is that in a sever recession, a company not hiring keeps people from earning money. If it gets really bad, as it has been, the government should be borrowing money in order to hire people to put money back into the economy.
bluehill
@foodriots:
Also the chart above is in dollars not FTEs so the difference in employee numbers is accounted for.
catclub
@PeakVT: I really do not want to find out whether your view or Gene’s is correct.
catclub
OT: I saw a post in some midnight thread about Syria and the Kurds.
It seemed very interesting ( although somewhat in a “Let’s you and him fight.” kind of way.)
It really seems to shatter various old alliances. Turkey seemed to be threatening to attack a Kurdish region of Syria, the Kurdish region of Iraq is interested.
On the other hand, it mentioned that Turkey has pretty good relations with the Iraqi Kurdish region. Weird.
Turgidson
A lot of the brain-damaged teabaggers are insane. Guys like Boner and McConnell are just soulless assholes who care more about the perks of corruption than governance, and consider doing whatever they can to beat Obama to be a sporting event, and don’t care who they hurt (millions and millions of people via this asinine austerity they’re forcing on everyone) to achieve that victory.
Frankensteinbeck
And this is the racism part of the equation. The GOP would be partisan fuckheads with a white president, but they would also protect their own asses. A black man is president, and the old white men in the GOP congress and the old white men who vote in GOP primaries have lost it. They’ve completely lost their grip on reality. Anger they won’t even admit the source of so consumes them that they will oppose everything they think he stands for and throw themselves into the fire if it will somehow make an example out of Obama and prevent this from ever happening again.
JPL
@catclub: The war with Iran alone will add a trillion to the deficit. Might not be time to declare a winner but something to think about.
The farm bill is another hint of things to come. Take 9 billion of food stamps from families and give it to agri-corps.
Roy G.
Why are they doing it? For the same reason the automotive companies bought up the streetcar lines in the early 20th century. They hate competition.
Mike E
Yeah, but like Wile E Coyote, anvils never kill these zombie GOP assholes.
Ben Johannson
@foodriots: We aren’t in a typical recovery. Krugman has recently acknowledged economic geowth is being seriously attenuated by massive debt on household balance sheets, a major point in his favor. The U.S. is now in the same position as Japan, and you can see how long their economy has been in the doldrums.
Anoniminous
@Ben Johannson:
We aren’t in a typical recovery.
People need to nail that to their foreheads.
The last time the US simultaneously experienced:
1. Falling house prices
2. Consumers restricting purchases to pay off consumer debt
3. Persistent high unemployment rate
4. A global financial crisis
5. Stagnation of world trade
6. A global recession
7. Weird & Whacky (relative to expectations) Weather
8. An agricultural sector on its knees
was 1928.
catclub
@Anoniminous: so is it 1931 now,
or 1933?
Anoniminous
@catclub:
IMO we are pre-1929. The average person hasn’t realized just how bad the economic and financial situation is. Once they do, and really start cutting back on their purchases [ETA: and paying down and/or running away from their debt], then the brown stuff will hit the rotating ventilation device.
Ruckus
@Frankensteinbeck:
We leave out the white women in this equation. I don’t think we should. Not as large a percentage as the men but not an insignificant number either. Some of them are just as crazy conservative as the OWM. Some even more so.
Ruckus
@Anoniminous:
Maybe I run in a different socioeconomic group than you but most everyone I know from small business owners to day labors knows that the economy is in the shitter. They may not know why or who but they know what and where. Some think it’s all the fault of the guy with the dark skin who inherited this shit pile and want to throw him out. They never seem to look at congress as a huge or total part of the problem. I think there may be a racial component to it.
Anoniminous
@Ruckus:
I don’t dispute that. People, as you say, aware the economy is bad. However I don’t think people understand just how total scrod, along several different axis, we is.
Example, Mid-West farmers are looking at a 40 to 60 percent reduction in crop yield come harvest. The price rise has already closed ethanol plants. So we’re looking at 2008, or worse, price rises for food AND gas. Which must lower spending for consumer consumables and durables over the next year to year and half.