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December 18, 2010



Well, rather than your ignorance, let's poke fun at their prognostications:
On average, economists...forecast gross domestic product would expand 3% this year, says the article printed in March.

And a look at the first statistics I can find, from the BEA a month ago, says:
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 2.5 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7 percent.

First quarter growth, according to a story from April, was 3.2%.

So good luck shopping this weekend, everybody, it's going to be crowded out there; "most economists" have apparently predicted 4.6% GDP growth this quarter (which is what we need to get back up to 3% for the year).

On the other hand, if growth stays at the average of the last 3 quarters, it will be only 2.47%.

And if it continues the downward trend of the last 3 quarters, it'll be 1% for the quarter and 2.1% for the year. Which most economists think is a smaller number than the 2.2% we supposedly would have had without destroying a trillion dollars in wealth in the various Cash for Cronies programs we've seen over the past year. And I believe most economists think there's a positive correlation between GDP and employment.


Here's an excellent column from Lord Monckton in The UK Telegraph showing that study's on that side of the pond can be just as stupid as study's on this side of the pond, because of the perspective of the ones doing the studying: ">http://www.telegraph.co.uk/earth/environment/climatechange/8210739/The-climate-bugaboo-is-the-strangest-intellectual-aberration-of-our-age.html"> The climate bugaboo is the strangest intellectual aberration of our age.


This discussion is just as dumb as saying the unemployed are employed by receiving un-employment insurance.

The government is paying them not to work in the private economy, same as they do with stimulous money.

So technically the government is employing them,... to be unemployed.

Monckton's so good with the words and the science that he's demonized by the alarmists.

Hey, daddyio, you want perspective, here's some. We are cooling, folks; for how long even kim doesn't know.

A hydrologist named Koutsoyiannis is doing very interesting things with climate and chaos. I've said he's about to make monkeys of us all in the climate expectation business.

Here's the sad thing. If we cool, the truth will come out, and we'll have social upheavals like famine, plague, war and the whole string of apocalyptic ponies. If we warm, it will have been man's fault, and oh, we'll pay much more dearly than with stampedes of destruction, we'll pay with our enslavement.


It's both funny and revealing that Tom assumes he's being called dumb when the far more obvious -- and in this instance self-evident -- upshot of the study is that he's intellectually dishonest to the bone.


bgates: you're confusing year-on-year figures with quarterly sequentials. As a result, your numbers are all fouled up.

Let's old acquain

juke, right?

Rick Ballard

"And I believe most economists think there's a positive correlation between GDP and employment."


I think "over time" would have to be added to that to make it true. The BEA annualized rates of increase from the press release cited include inflation. BEA also provides a GDP ex-inflation tables from which actual YoY increases (decreases) can be extrapolated. Q4 will have to come in a lot hotter than anticipated for the economists estimate to be reached and Q1 '11 is looking very pukey at the moment.

The positive correlation between GDP growth and employment will fail to be realized in this instance. In fact, cursory analysis of the drop in SS HI contributions indicates that the economic equivalent of an additional 5.8 million jobs (at an annual $45K wage/salary) have been lost since last December. The actual number is difficult to determine due to the rather startling increase in part time employment (Obanomics likes to count all the 12 hour per week Walmart greeters added as a sign of the President's "success").

'11 is going to be a bit difficult due to productivity increases hitting the wall. The massive incompetence demonstrated by the President and the credentialed morons whom he has assembled as ill advisers him isn't much help.

Cecil Turner

bgates's math is correct. However, I see various listings of real GDP growth give the first quarter as 3.7% (from which I presume it was revised upward). Given that, the average rate so far is 2.6%, and the 4th quarter rate would have to be 4.1% (annualized) to make the annual rate 3.0%.

Cecil Turner

Rick, I ran the numbers from your link, and they come up to the same as my link above (3.7, 1.7, and 2.5). I suspect inflation is already in there (which is what I thought the "real" in the GDP numbers meant).

(However, I'm a science/math guy. This finance thing ain't my thing.)


The average Fox viewer refuses to believe it's all Bush's fault. The rest is mere details.

Maybe he remembers that graph predicting unemployment with and without the stimulus, and concludes that the elites haven't a clue, or are lying again.

Perhaps he shops, and notices that prices are rising in spite of having no inflation.

Yeah, he's got to be ignorant.


I think there was a typo in the article. It should read "Most Economists", the pen name of a certain guy who teaches at a high school in Berkeley.


It should read "Most Economists", the pen name of a certain guy who teaches at a high school in Berkeley.

I love this! Hahahaha...I'm always wanting the "journalists" to name names. Who exactly?

Jim Ryan

Were these 55 or so economists selected by the lefty news guys at WSJ or by the editorial page guys?

Were they selected by WSJ guys who wanted a doxastically incontinent panel which would make bold predictions that sell papers? Or by WSJ guys who wanted a panel that would keep its pronouncements boringly reined in by the evidence?


It's both funny and revealing that Tom assumes he's being called dumb when the far more obvious -- and in this instance self-evident -- upshot of the study is that he's intellectually dishonest to the bone.

Goodness, BB you language and argumentation skills are extremely poor. It may or may not be the case that TM is "intellectually dishonest", but this case is most certainly not an "upshot of this study". It may be an "occasion" for the alleged dishonesty, but in no way is it the "upshot" or "consequence" of it. In any case, since TM has clearly and carefully outlined his position, along with references, you would have to actually present some sort of counter argument or, at the very least, provide a critical analysis of TM points that showed actual dishonesty.

You do not do so. Evidently the best you can do is some obscure and veiled resort to the "Resort to Authority" fallacy (an all to common vice of yours I might add). This rhetorical approach is not only fallacious by way of proof, BTW, but nonsensical in formulation for it addresses, however poorly and deceitfully, the validity of conclusions of TM and not his "intellectual honesty" at all. It is you here that engages in "intellectual dishonesty" (and muddled thinking too, I might add). As with the term "upshot", you appear to know not what the phrase actually means.

You and your juvenile, pseudo-intellectual prose: It is as though you take phrase elements out of the Sunday Supplement of the New York Times, mash them up in some sort of mental blender and then spew them out when you mistakenly think the circumstances call for it. It is a sort of "automatic rhetoric".
It is not thinking. It is not writing. It is not debate.

It is an infantile retort. It is an embarrassment. Do you understand that these interjections of your do not logically parse, that they are nonsensical?

You are making an utter fool out of yourself yet you think you are besting your intellectual and moral betters.

It is you that is intellectually dishonest. This would be the upshot of a poor education, a weak mind and a compromised moral character.

Jim Ryan

Ha! My older boy is studying a high-school econ textbook right now. The author is Russell Kirk.


BB youR language and argumentation skills

bio mom

I have never understood why economists make predictions, whether about the GDP or about the jobs numbers that come out monthly. They are either wrong or they are right. So what? The numbers will be what they are so predictions will either cause disappointment or undue excitement. Seems silly and unnecessary to me. Just wait for the numbers!!


Cecil is right that bgates had it right except for the data revision. Bubu as usual doesn't know what he's talking about.

Here are the latest (inflation-adjusted) GDP growth figures for 2010: 3.7, 1.7, and 2.5 in Q1-Q3, meaning that, as Cecil said, it would have to be 4.1% in Q4 to get to 3% for 2010 overall (approximately--there's some rounding error).

But related to Rick's point I'll bet if you'd asked those same economists what job growth was going to be in 2010 they would have picked a much higher number. The GDP growth that we've had has been productivity-driven rather than employment-driven. So even if we get to 4.1% in Q4, the link to employment that was implied in those economists' predictions is not there. So that 600,000 from extra GDP growth in 2010 is generous.

Merry Christ Mass to all.

Ah, I note a little seasonal gift for the birthers among us. I knew there was a pony in there somewhere.

Jim Ryan

Kim, you see this? I think I'm going to put everything in my IRA into the Pacific Carbon Exchange. That way I won't have to wonder how much money there will be in my account when I retire.

Melinda Romanoff


The link to employment from those economists can be referred to has the "hand-in-pants" method of calculation leading to results more commonly referred to as being "pulled out of one's a$$".

At least I think that's what the technical term is, it's been so long...

Subconscious suggestion while he slept?  I dunno, it's mysterioux.

I loved him since Conan the Barbarian, but he's just lost his mind.

Rick Ballard


I shoot for brevity on the economic posts and sometimes lose all clarity. Bgates' numbers are correct and your observation regarding the numbers from my cite aligning with them (on an annualized basis) is also correct. "YoY" is not quarterly annualized though and the YoY numbers for the first three quarters of 2010 are 1.1%, 3% and 3.2%. The 3% "most economists" estimate looks pretty safe on that basis. I don't believe it is and I would bet that Q1 11 is going to be ugly, based upon the fact that employment is not improving at the rate necessary for actual growth (ex-inflation).

I don't believe "most economists" are making a sufficient allowance for the demographic shift underway and the subsequent devotion of income to rebuilding personal balance sheets rather than consumption.


Ouch, 'eux'.


It's a study by a group, headed by Tony Lake,
Clinton's Sorenson (by that I mean, a failed
choice for CIA director) they are the ones who previously insisted there were never any
WMD's in Iraq, and Fox was stupid for pointing
it out

Captain Hate

I have never understood why economists make predictions, whether about the GDP or about the jobs numbers that come out monthly. They are either wrong or they are right. So what?

Well, it's their job to do that, no matter how inexact a "science" it might be. Some of them are better than others, obviously, in seeing which way the tea leaves line up by weighing some factors more effectively than others. To paraphrase an econ prof from grad school: "I barely know the first thing about forecasting interest rates; and I'm one of the best".

Look at it this way: Bill Ayers was a tenured "education expert" at some campus at the University of Illinois. Can you name one school where he demonstrably improved the effectiveness in imparting knowledge to students?


Oh, man, way too long to read--what's the 25 words or less summary?


Jobs saved or created is simply more magic realism. It is not any recognized economic measurement. Jobs added or lost can be determined. Jobs "saved" "created [but not added" or jobs "imagined" are substitutes for actual joblessness measurements.

Hawaii? We'll know all about it when he's out of office.

And, no, he's just not that smart.


Are these the same economists who predicted the mortgage crisis wouldn't exist, and would have only a small impact on the economy when it became apparent it did?


Here's a study re how dumb another group of people are: The value of a nuclear Iran. Here are the parts I found of most value:


By far the most interesting leak that surfaced from the US cable disclosures is the repeated insistence of the Saudi king exhorting the United States to withdraw from Iraq by taking a detour through Iran. As Reuters reported on the WikiLeaks story on November 29:

King Abdullah of Saudi Arabia repeatedly exhorted the United States to "cut off the head of the snake" by launching military strikes to destroy Iran's nuclear program, according to leaked U.S. diplomatic cables. ockquote>


The sentiment broaches some obvious questions in the minds of anyone who is not beholden to the Saudi establishment or part of the George W Bush - Dick Cheney oil coterie.

Firstly, what is the snake that King Abdullah refers to?

There are multiple possibilities about the nature of the snake. One possibility is that the king referred to the Persians, or more likely the Shi'ite masses as the snake; with Iran as its head. While this view would certainly confirm with the Saudi/Wahhabi orthodoxy in respect of Islam and its evolution over the past 1,000 years, it doesn't make much for common ground with the United States. Americans are (presumably) neutral with respect to the different denominations of Islam, in the sense that they are already at war in two predominantly Sunni areas (northern Iraq and Afghanistan) and are embroiled in wars across Shi'ite regions in the southern part of Iraq, as well as the Reagan-era animosity towards Shi'ite Iran.

The snakes in the sands

There is something deliciously self-serving about Saudi exhortations for the US to act on Iran to prevent the rise of a new power in the Middle East, especially if the US were to step back and ask a tougher question about the role of "other snakes".

In case that is too obtuse, what I am referring to is the "snake" of religious terrorism, and in particular the problem of disaffected youth in predominantly Sunni kingdoms such as Saudi Arabia, Kuwait et al; as well as those in anarchies such as Iraq, Afghanistan and Pakistan. It is not entirely clear that the natural enemy of such youth is necessarily the Americans; more likely, it is the established order of the Middle East, where the wealth of nations is controlled by a bunch of aging monarchies.

This snake of religious terrorism is the one that bit the US on 9/11. Most of the hijackers on September 11, 2001, were of Saudi origin and despite nominally falling under the leadership of Osama bin Laden it stands to reason that they were mainly disenchanted due to the stifling anti-democracy of Saudi Arabia and the inherent hypocrisy of Wahhabism in a country that spent most of its time kowtowing to the Americans.

Fearing the tactical nightmare of dealing with hundreds if not thousands of these disaffected youth, America and Europe chose to make the strategic blunder of supporting the crumbling monarchies as long as they attacked their own youth. This was a stupid bargain, to put it mildly.

A sustainable situation would be to engender wider regime change in the Middle East by booting out the creaking and corrupt monarchies, to be replaced progressively with Islamic leaders capable of taking a development-oriented approach to their countries. To ensure this new generation of Middle East leaders do not get overly tempted by the possibilities of attacking America or Israel, it would be necessary to have a "natural" check in the region - namely Iran.


Australia gets it right

Contrast the Saudi stance with that of Australia, a consistent ally of the United States and the United Kingdom for the past 60 years. As Reuters reported on December 13:

Australia is at odds with its major security ally the United States over Iran, saying it is not a "rogue state" and its nuclear weapons program is for deterrence, not attack, according to US cables released by WikiLeaks. The documents, published in the Sydney Morning Herald on Monday, also reveal that Australia's top security organization believes Tehran sees a "grand bargain" with the United States as its best way to ensure national security.

But the Office of National Assessments (ONA) shared Washington's fears that Iran's pursuit of nuclear weapons could lead to conventional or nuclear war, noting a conflict between Israel and Iran was the greatest challenge to Middle East stability.

The ONA was also concerned that nuclear proliferation in the Middle East may drive Southeast Asian nations to pursue their own nuclear capabilities. "It's a mistake to think of Iran as a 'rogue state'," then ONA chief Peter Varghese told the United States in a briefing, according to the 2008 US diplomatic cables from Canberra. The cables said the ONA sought a balanced view of Tehran as a sophisticated diplomatic player rather than one liable to behave impulsively or irrationally.
The Australians are correct in their assessment, even if it was only made because of their fears that a nuclear conflagration in the Middle East would spark a rush towards nuclear weapons by Indonesia (the world's largest Muslim country and a close enough neighbor to worry Australian policymakers). Whatever their motives, the Australians may have hit the nail on the head - namely, that the West should take a balanced approach to this problem.

What about Israel?


That said, there have to be other considerations too. Firstly, it is unlikely that Iran actually has the ability and, distinctly, the willingness to withstand a Jewish state counter-attack (let alone American) should it ever contemplate an attack on Israel. With over 200 nuclear bombs at its command (some estimates even say 400), Israel is no pushover when it comes to retaliation.

Secondly, one has to sit back and examine what exactly the Iranians can claim to gain by the endeavor of pursuing this goal - precious nothing. Compare that to the direct benefit of addressing their key problem, namely a decline in the production and export of oil that Iran faces on a daily basis. Other authors - including my Asia Times Online colleague Spengler - have mentioned the dire straits of the Iranian economy with its over-reliance on falling oil exports.

Putting fear and greed together, the answer to engaging Iran is surely the expansion of Iranian influence over Shi'ite oil-producing areas around the Persian Gulf. A critical examination of this aspect could well be the key to resolving both the Middle East conundrum and containing the further spread of Wahhabi terrorism globally.

Shi'ite oil

There is something of a truism in the energy industry that while Sunni states may claim ownership of oil reserves, most oil-producing areas are actually in regions populated exclusively or extensively by Shi'ite groups. For example, The Energy Bulletin published the following table in December 2008, in an article entitled "Shia Islam and oil geopolitics" by James Leigh; the table highlights the predominance of Shi'ite (Shia) populations in the regions with significant oil reserves.

The article highlights a key point:

The Gulf states of Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the UAE, have 81.3 million Shia or about 61% of the total Gulf population. Further, if we just take the Shia populations of the five nations of Iran, Iraq, Kuwait, Saudi Arabia, and the UAE holding 58% of world oil reserves, we see Shia make up a total of 62% of their populations. Clearly the Shia have the potential for significant influence over this whole Gulf region through their own nations and also ultimately to the world. Of course they could also wield regional and world influence through their solid representation in OPEC.

A closer look at the exclusively Arab portions of the "oil map" is disturbing to say the least for the average Sunni fanatic. A number of key oil fields in various Arab states adjoining the "Arabian" Gulf (which is of course called the "Persian" Gulf in the rest of the world) are in areas with predominantly Shi'ite populations, the principal ones being Bahrain and Al-Hasa (a region that was under Bahrain during the time of the Ottoman empire).

This then is the core of the Saudi worry about Iran. An expansion of the Shi'ite state could provoke grave unrest within Saudi Arabian borders but also limit the country's ability to suppress dissent from its young and restless, a scenario that must provoke the greatest concern among all the crown princes as they mull the succession from King Abdullah.

Looking ahead

The prospect of a nuclear Iran certainly creates its share of worries, not the least of which is the likely expansion of a theater of war away from the Middle East towards Europe and Asia. The country's attitudes towards Israel are also a matter of deep concern. However, if one assumes that an expansion of the Iranian military in non-conventional weapons is a certainty in an environment where the United States as a declining superpower is unable to intervene militarily, then the next best option - namely to harness this new emerging power - should certainly be examined closely.


Interesting that the MSM was trumpeting Saudi urgings upon the US, but this is the first I heard of a more rational foreign power's (and strong ally's) concerns:

Australia is at odds with its major security ally the United States over Iran, ...

Sorry I goofed up the formatting.


--"So, why is the most transparent administration in history so opaque on this minor point?"--

To keep you guessing TM.

If the question was, "Is an anchor baby eligible to be POTUS?", I wonder how many answers would be possible.

The Birther fights for a conspiracy theory, The Dualer defends the constitution.

Obama is a dual citizen.

In addition, Mark Levin's thoughtful remarks on the 14th amendment, as it applies to anchor babies, dooms Obama's citizenship status.

The economists here are doing well on the economy topics so I will help with the "con-job" topic.

Fred Beloit

Meme=This so-called study, actually a propaganda piece, confuses facts with opinions. Fox watchers are NOT more uninformed than Olbermann eaters. (20 words)

Kevin B

To be fair to economists, their predictions are much more scientifically based these days.

They have all these super spiffy models running on giga-fast super computers. Oh, and the chicken entrails are much less messy than before since they usually come in plastic bags stowed inside the chicken carcass.

(Although I understand that the old ways are still used for the more complex calculations such as jobs 'saved or created', where the nameless ones need to be consulted.)

Cecil Turner

. . . meaning that, as Cecil said, it would have to be 4.1% in Q4 to get to 3% for 2010 overall (approximately--there's some rounding error).

Yep, I used the reported numbers at two sig figs, and in each case they'd rounded down. The raw numbers were all slightly higher (3.73, 1.72, and 2.52) which makes the average annualized GDP growth 2.66% for the year and the 4th quarter growth (to get 3%) 4.04% (so 2.7 and 4.0 would be the correct rounding).

Danube of Thought

When I hear the term "most economists" I reach for my revolver.


Very funny, kevin. I'd do that, too, DoT, if I could find mine.

Jim Ryan

Your pistolas will suffice, Clarice.


Rick, the current year over year numbers are inflated by the 5% in 2009Q4. When that gets taken out, we'll be back to needing 4% in 2010Q4 to get to 3.2% for the year.

Actually, it may be a bit more complicated. At the risk of putting everyone to sleep, they may have meant annual GDP in 2010 relative to annual in 2009. To figure that out you need a spreadsheet (and use the numbers in Rick's earlier link), but by my calculations, there would have to be about 8.8% annualized growth in Q4 for 2010 GDP to be 3.2% higher than 2009 GDP. (I think--I did the computations fairly quickly.)


Well, Jimmy, I checked with Pelosi, the Dem in house economist ,and she says if we'd only extend unemployment benefits to a couple million or so more we'd hit that 8.8% figure. By her calculations every $1 we give out in unemployment benefits, contributes $2 to the GDP.


LOL, Clarice. I had a former colleague who used to laugh at Keynesian economics. To paraphrase: "If they're right that every extra $1 in government spending generates $2 (or $3 or whatever) more GDP, then we should spend infinity and we'd all be infinitely rich."


The WH estimate was that unemployment would reach 9% in the absence of porkulus and that the pork was needed to keep it below a peak of 8% and by now it would be under 7% and liberal economists defended that estimate.
When it went to 10% they concluded things were worse than they thought.
So the people who couldn't see that even with the pork it would reach a level fully 30% higher than their estimates and now remains 50% higher than their predictions are here to tell us within a few hundred thousand how many jobs they saved or created.
Incidentally their sophisticated model consists of guessing that a 1% growth in GDP equates to 1 million saved jobs so their increase of transfer payments had to have saved or created that many jobs, ipso facto.
When the facts disagree with your model you can do one of two things; an honest person will adjust the model, a dishonest one will adjust the facts.

BTW could someone tell me what "intellectually dishonest" means?
I presume it's a weasel's way of calling someone a liar while avoiding a trip to the oral surgeon.

Comanche Voter

We can shorthand all of this. Anybody who doesn't agree with the New York Times is "dumb, dense or stupid". Take your pick.
Having established the universal rule (at least for those who live and work in Manhattan and Washington D.C.) we can all go about our business without any useless thinking about it. I'll live in my intellectually sloven mental hovel without any more worries. Glad that's over.

And TM--the "Obama Brand" is rapidly becoming identical with the "Mickey Mouse Brand". Good point there podnuh. Keep on pitching.


LOL, Anduril master of the 25 word or less post. Must means he does not understand or even read anything he posts

Frau  Advent

TK - thanks for keeping this balanced.

Hear, hear, PaulY. I missed the sarcasm off.

Frau  Advent

Goofing up formatting will definitely come up at the Airing of the Grievances. I'm asking for an early number.


PaulY, Frau Advent, I'm sorry you found yourselves unable to enter into my little joke.


i'm asking for a baseball bat inscribed "TL;DR."


Anduril, so you are a joke now. Keep to your promise never to use more than 25 words.


Square--sorry I got here late, but your BuBu post was truly a masterwork.


When I buy something from Granger at the end of the transaction there is a check box that asks ... Is the purchase related to ARRA funds?

There is absolutely no way to verify this and it is a joke.


Let me get this straight, the debate here is over whether the economy grew 3 percent or 2.8 percent in 2010?
No matter how you slice it, U.S. growth this year is roughly TRIPLE that of the other advanced economies.
I'd say that's pretty good, considering we're bogged down in 1 and a half unwon wars and served as ground zero for the Bush economic collapse.
Not bad at all...
And on a relative basis, the outperformance will be even wider in 2011, economists predict...
I wonder how many JOMers have lost big money by betting on their ideology.
Presumably, they bought stocks under Bush on the theory that cutting taxes for the rich and deregulating finance equals prosperity, but then they got massacred. Then, if they had any money left, the went short on Obama, then got ransacked again!
No wonder Obama's opponents are so damn angry, they keep getting fleeced in the market...lol

Cecil Turner

Geez, dude, your innumeracy is showing.

Average Qtrly growth rate for the US economy (post WWII) is 3.1%. Typically it's higher during a recovery. The average in 2010 is 2.66%. (With 9.8% unemployment.)



Spunkmeyer doesn't even see himself, going splat, CT, there is only so far you can bend
the arc of reality, imagine if such a study
had come out in the 80s. when Moyers, Stahl, was bemoaning the endless recession,

Rick Ballard

"At the risk of putting everyone to sleep, they may have meant annual GDP in 2010 relative to annual in 2009."


How else could the "they forecast gross domestic product would expand 3% this year," be interpreted? (No snark, just puzzled - and bored to sleep by the "moderation in defense of sodomy is no virtue" thread.)

I get 8.6% in Q4 but that's probably rounding again.


"moderation in defense of sodomy is no virtue" HEH


I'm waiting for Rick et al's 2011 forecast. Based on the 2009 and 2010 record, they're remarkably accurate counter-indicators...
C'mon, Rick: You still selling?


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