|
3.3% economic growth last quarter (pg. 2)
|
View this Thread in Original format
| atbell |
| quote: | Originally posted by George Smiley
I'm happy for you, I really am. I'm happy that, after ing up the entire global economy with your irresponsible economic practices, the American economy is showing signs of improvement. I mean, who in the Republican or Democrat party gives two s whether or not nobody else in the world can afford to buy a house any more? |
House, you elitist!!! ;)
I'm more concerned about the millions who struggle for water, food, and waste treatment. I'm not surprised they don't want to give up thier resources as thier friends and family struggle every day. |
|
|
| Capitalizt |
Economic growth 3.3%
Wage growth 3%
GREAT, but..
Inflation rate 5.6%
= fail |
|
|
| jerZ07002 |
| quote: | Originally posted by George Smiley
I'm happy for you, I really am. I'm happy that, after ing up the entire global economy with your irresponsible economic practices, the American economy is showing signs of improvement. I mean, who in the Republican or Democrat party gives two s whether or not nobody else in the world can afford to buy a house any more? |
please - foreigners made their own independent poor choices. it's not the fault of americans that foreigners were swallowing up bad investments at the same pace as americans. foreigners were just as greedy and eager to issue bad debt and securitize investments. If foreign banks weren't in the game, credit wouldn't have been as easy to obtain, and standards necessarily would have been more stringent - thus lessening the entire credit crisis. In essence, foreign banks provided more fuel to the fire.
furthermore, if falling american consumption causes some sort of worldwide economic slowdown, too bad! american consumers have been the driver for prosperity around the world for the past few decades. US consumerism is the underlying cause of much of the current wealth spreading around the world - especially in places like china and india. |
|
|
| MisterOpus1 |
I have a patient who happens to be an economics professor at the University of Kansas (here in Lawrence, KS), and he tells me that he is often at odds with his colleagues at the university as well as in his field. His primary rationale and reason for being at odds is because he just recently printed a book with the premise that American economics and economists in general are all "full of " (his words to me). He fully believes that American economics, at least the primary concern for economists in this country are to simply tell the American people that things are rosier than they really are. American economists are also often told to state the same thing for political reasons, and will change their rationales in accordance to whoever is in office (he cited Greenspan as but one example).
I found his story both funny, compelling, and scary. Scrolling around the internet I ran into this video which unfortunately bears his statements out rather well:
http://www.chrismartenson.com/fuzzy_numbers
It's worth watching, especially for those who aren't as involved in economics like myself.
But back to the topic of this thread, it seems that this theme purported by my patient is bearing out when it comes to the GDP (also explained in that film above. A simple Google search depicts numerous articles who's authors are skeptical at best and downright dismissive at worst at our government's "fuzzy" numbers when utilizing the GDP, especially the most recent 2nd quarter:
http://www.marketoracle.co.uk/Article5875.html
http://seekingalpha.com/article/932...t-gdp-revisions
http://www.usnews.com/blogs/capital...mber-phony.html
http://bigpicture.typepad.com/comme...l-shenanig.html
http://www.businessweek.com/magazin...14/b3877044.htm
http://www.nashuatelegraph.com/apps...STS24/682855722
This one is pretty compelling to me as well:
http://globaleconomicanalysis.blogs...ne-numbers.html
And finally, here's a blog that I often read:
| quote: | From the BEA:
| quote: | | 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 3.3 percent in the second quarter of 2008,(that is, from the first quarter to the second quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.9 percent. |
Before we all get really excited about this, let's take a look at how we get the 3.3% number.
The GDP number is the end result of the following sub-areas.
Personal consumption expenditures: these are responsible for 1.24 of the 3.3% increase or 37.57% of the total. However, let's remember we had the government stimulus checks hit the economy last quarter. Without the stimulus checks, personal income growth would have been stagnant.
Gross Private Domestic Investment: this category was responsible for -1.82 of the 3.3 growth figure. In other words, this category completely eliminated any growth from personal consumption expenditures (which were also rigged higher by stimulus checks). So after these two figures, we have a net change -.58
Exports: This was the big reason for the change in the number. Exports were responsible for 3.10 of the increase -- or 93% of the 3.3% change. When we look a bit deeper into these numbers, we see that exports rose 13%. That's good. But imports dropped 7.6%. That's one of the biggest drops in a long time and indicates demand is dropping in the US. That's not good.
Government expenditures: are responsible for .76 of the 3.3 number or 23% if the increase. When government spending is responsible for nearly 25% of your GDP growth, you have big problems.
On the domestic side, we have an increase in consumer spending that was juiced with government stimulus. Domestic investment subtracted from growth.
On the trade side, a big drop in imports led to a larger increase in exports.
In other words, the great growth rate is the result of a mathematical construct, not solid growth.
http://bonddad.blogspot.com/2008/08/gdp-33.html |
So for me, at least, Christ it's hard to trust anything that our government says about our economy, let alone the absolute bull that's come out of this Administration on how lovely things have been. |
|
|
| Krypton |
| quote: | Originally posted by MisterOpus1
I have a patient who happens to be an economics professor at the University of Kansas (here in Lawrence, KS), and he tells me that he is often at odds with his colleagues at the university as well as in his field. His primary rationale and reason for being at odds is because he just recently printed a book with the premise that American economics and economists in general are all "full of " (his words to me). He fully believes that American economics, at least the primary concern for economists in this country are to simply tell the American people that things are rosier than they really are. American economists are also often told to state the same thing for political reasons, and will change their rationales in accordance to whoever is in office (he cited Greenspan as but one example).
I found his story both funny, compelling, and scary. Scrolling around the internet I ran into this video which unfortunately bears his statements out rather well:
http://www.chrismartenson.com/fuzzy_numbers
It's worth watching, especially for those who aren't as involved in economics like myself.
But back to the topic of this thread, it seems that this theme purported by my patient is bearing out when it comes to the GDP (also explained in that film above. A simple Google search depicts numerous articles who's authors are skeptical at best and downright dismissive at worst at our government's "fuzzy" numbers when utilizing the GDP, especially the most recent 2nd quarter:
http://www.marketoracle.co.uk/Article5875.html
http://seekingalpha.com/article/932...t-gdp-revisions
http://www.usnews.com/blogs/capital...mber-phony.html
http://bigpicture.typepad.com/comme...l-shenanig.html
http://www.businessweek.com/magazin...14/b3877044.htm
http://www.nashuatelegraph.com/apps...STS24/682855722
This one is pretty compelling to me as well:
http://globaleconomicanalysis.blogs...ne-numbers.html
And finally, here's a blog that I often read:
Before we all get really excited about this, let's take a look at how we get the 3.3% number.
The GDP number is the end result of the following sub-areas.
Personal consumption expenditures: these are responsible for 1.24 of the 3.3% increase or 37.57% of the total. However, let's remember we had the government stimulus checks hit the economy last quarter. Without the stimulus checks, personal income growth would have been stagnant.
Gross Private Domestic Investment: this category was responsible for -1.82 of the 3.3 growth figure. In other words, this category completely eliminated any growth from personal consumption expenditures (which were also rigged higher by stimulus checks). So after these two figures, we have a net change -.58
Exports: This was the big reason for the change in the number. Exports were responsible for 3.10 of the increase -- or 93% of the 3.3% change. When we look a bit deeper into these numbers, we see that exports rose 13%. That's good. But imports dropped 7.6%. That's one of the biggest drops in a long time and indicates demand is dropping in the US. That's not good.
Government expenditures: are responsible for .76 of the 3.3 number or 23% if the increase. When government spending is responsible for nearly 25% of your GDP growth, you have big problems.
On the domestic side, we have an increase in consumer spending that was juiced with government stimulus. Domestic investment subtracted from growth.
On the trade side, a big drop in imports led to a larger increase in exports.
In other words, the great growth rate is the result of a mathematical construct, not solid growth.
http://bonddad.blogspot.com/2008/08/gdp-33.html
So for me, at least, Christ it's hard to trust anything that our government says about our economy, let alone the absolute bull that's come out of this Administration on how lovely things have been. |
That's one guy I'de have to agree with. Economists are nowadays fixing the numbers. Such as the Core Inflation Index, which doesn't even measure food or fuel inflation. If that were averaged in, we'de have much higher inflation right now, but it isn't. So the inflation numbers we're getting told really aren't the real numbers to begin with. |
|
|
| atbell |
| quote: | Originally posted by MisterOpus1
I have a patient who happens to be an economics professor at the University of Kansas (here in Lawrence, KS), |
Could you get me some of the things he's written most reacently? I'd be interested to see what he's been researching. |
|
|
| jerZ07002 |
| quote: | Originally posted by Krypton
That's one guy I'de have to agree with. Economists are nowadays fixing the numbers. Such as the Core Inflation Index, which doesn't even measure food or fuel inflation. If that were averaged in, we'de have much higher inflation right now, but it isn't. So the inflation numbers we're getting told really aren't the real numbers to begin with. |
items like the core inflation are devised for a specific purpose. If food and fuel inflation were included then you would be double counting the effect of fuel cost on consumer products because fuel costs are part of the price of the product. core inflation only seeks to show the increase in the cost of specific goods. |
|
|
| atbell |
| quote: | Originally posted by Krypton
That's one guy I'de have to agree with. Economists are nowadays fixing the numbers. Such as the Core Inflation Index, which doesn't even measure food or fuel inflation. If that were averaged in, we'de have much higher inflation right now, but it isn't. So the inflation numbers we're getting told really aren't the real numbers to begin with. |
Getting into proving which data sets are good and which ones are not is a really nasty business. I tend to try and look at numbers from sources I trust. The economist is one of the ones I rank highest. |
|
|
| atbell |
| quote: | Originally posted by jerZ07002
items like the core inflation are devised for a specific purpose. If food and fuel inflation were included then you would be double counting the effect of fuel cost on consumer products because fuel costs are part of the price of the product. core inflation only seeks to show the increase in the cost of specific goods. |
The standard reason for dropping fuel and food costs is because they are volitile and the standard theory is that it would cause trends to be more difficult to pick out. |
|
|
| Krypton |
| quote: | Originally posted by jerZ07002
items like the core inflation are devised for a specific purpose. If food and fuel inflation were included then you would be double counting the effect of fuel cost on consumer products because fuel costs are part of the price of the product. core inflation only seeks to show the increase in the cost of specific goods. |
Well then, we can't really trust it now can we? Fuel and food are the most important commodities people buy, and to simply just omit it is stupidly wrong. |
|
|
| MisterOpus1 |
| quote: | Originally posted by atbell
Could you get me some of the things he's written most reacently? I'd be interested to see what he's been researching. |
Funny you asked - I was just researching his stuff earlier yesterday. Here's his curriculum vitae:
http://www.economics.ku.edu/VITA%27...ty/elhodiri.pdf
I don't know what paper he's specifically referring to here. His next appt. is on Wednesday, so I'll ask him more about it if I have time then. |
|
|
|
|
