Yesterday, analysts thought the economy was expanding by 2.5% a year. This morning, they learned GDP grew by only 1.6% in the last four quarters. This is a remarkable discovery. It’s the difference between thinking we’re expanding at a decent, if disappointing, pace, and knowing we’re growing around half our historical norm.
Analysts also thought, as recently as twelve hours ago, that the economy declined 6.8% and 4.9% in the quarters bisected by Obama’s inauguration. It turns out the actual declines were much steeper: 8.9% and 6.7%.
To adopt the president’s favorite metaphor of the ditch and the driver: The ditch was a 33% deeper than we thought. And we’re driving 33% slower than we hoped.
The second bit of cold water to the face to wake us up comes from Minnesota:
Morrissey describes the trends in the chart thus:
Now we know why employment has skittered along the bottom end of the curve for so long. Our economy hasn’t been expanding much at all during the two years of recovery, noted on the bottom line by the black square. No wonder we’re barely above the employment level of the recession’s end 24 months later. We have been saying for two years that the Obama “recovery” has been smoke and mirrors, and the revisions in the GDP reporting make that pretty clear now. The other clear takeaway from this is that the Keynesian stimulus bill utterly failed to produce anything more than a temporary, artificial spike in economic indicators, and not a particularly impressive spike at that.
If we weren't engaging in a circular firing squad because we didn't get everything we wanted from the debt ceiling deal, we could be educating the public on stuff like this and building a stronger coalition for economic recovery in 2012 by evicting Barack Obama from the White House...I'm just sayin....
