News that GDP fell by 1% instead of the 1.5% that economists expected has been taken as a sign that happy days are here again. Maybe they are.
The unemployment numbers will come out next Friday. I guess the best approach to take is to say that we expect them to go from 9.5% to 12%. When they come in at only 9.7% because only another 400,000 people lost their jobs we can all celebrate the good news.
This latest news is being touted, by Obama and his essentially state-run media mouthpiece, as a sign that Obama's combination of tax cuts and government stimulus are working. The two main drivers of growth were government and net exports, not consumption and investment (from the classic Y=C+I+G+nX macroeconomic model). The third quarter is going to be gangbusters and from here on out we should be cautious but assured that the steps our president has taken have enabled us to move forward. Thank you leader. For it was your noble actions of borrowing and ramping up the debt that has led has out of this morass.
Cash for clunkers may add huge numbers to economc growth over the next quarter by having government borrowing prop up car consumers and dealers. Hey, what's a few billion in taxpayer money to subsidize it? I like having a portion of the taxes I pay go towards giving my neighbor a $3,500 to $4,500 discount on his new car. Once the guvmint "freebie" ends it is likely car sales will go back down. What does it matter? We're happy now, GDP will probably grow because of it in the 3rd quarter, and progress is being made so shut your cakehole!
At this point, any good news is welcome. The fact that things aren't as bad as they could be or were is encouraging. This is truly a lesson that if you have low expectations, you will be rewarded if you make any progress. My goal for today is not to hurt my back and to get enough oxygen so I can breathe. Also, maybe I'll take out the trash and walk around a little. If I can do all these things I will declare it a good day.