Political-Media Establishment Ignores Ominous Economic News

If the economy falls in America but the President and the media don’t mention it, will The People still suffer?

Last week the Commerce Department published a revised GDP report showing that the economy contracted by 1% during the first quarter of 2014.

8-recoveries-2014-Q1As the chart shows, even before the first quarter contraction we were suffering through the worst of the eleven post-recession economies or “recoveries” since World War II.

Perhaps because of competing news about the VA there was little mention of this ominous economic contraction in the establishment media.  Obama Administration officials blew off the news as insignificant, a temporary blip due to worse than usual winter weather.  Move along, nothing to see here.   

Hopefully, the commentators and Administration spokesmen are right.  But, considering the economic statistics below they seem to be a bit overconfident.

Exactly 265 quarters have passed since the Commerce Department began tracking and reporting quarterly GDP in 1947.

  • 225 or 85% of those quarterly reports showed positive growth or economic expansion.
  • 11 negative (economic contraction) quarters turned out to be the first of several during recessions
  • 19 negative quarters were the second, third or fourth in continuing recessions;
  • only 4 negative quarters in 66 years came and went as isolated phenomenon, not followed by a recession.  Three of those were before 1960.

So, a negative quarter is unusual, not a routine event.  A negative quarter that isn’t part of a recession is extremely unusual.  Eleven out of eleven recessions were signaled by the first of several negative GDP quarters.  Yet we’ve seen no sense of concern over this ominous economic indicator from the Administration or the media. 

The President has not altered his agenda in any way to head off a possible recession.  Employers must prepare for a spike in costs due to the Obamacare employer mandate, scheduled to begin at the end of the year after being postponed twice.  Today, the President announced he would “fight climate change” with sweeping new restrictions on the coal fired power plants that supply nearly half of the nation’s electricity.  The resulting spike in energy costs will function as a sweeping new penalty on American industry.  The only possible result is shrinking GDP and fewer jobs.

If the first quarter of 2014 turns out to be the beginning of a new recession – and based on history the odds strongly favor such an outcome – the President will likely claim, as he has during each of his Administration’s crises and scandals, that he had no warning and learned about the recession from the news.  But the truth will be that his big government initiatives will be to blame both for the anemic, nearly jobless recovery we’ve seen since the end of the 2008-09 recession, and for the new 2014 recession.

No Comments

Comments are closed.