Skip to main content

Good news, folks! On Thursday morning, Fox News assembled a panel of expert pundits to explain why the nation's GDP shrunk by 0.1 percent in the fourth quarter of 2012, and boy oh boy did they ever deliver some insightful analysis. For example, Charles Payne of their business channel revealed this stunning conclusion: "The economy has been slowed in part because there has been a war on success and constant threatening and demonization of business."

Well that's a bold explanation. The only problem with it is that despite declining in the fourth quarter, GDP grew faster over the course of the full year of 2012 than it did in 2011. And that means that if President Obama is waging a war on success, he's doing a pretty shitty job of it, because on a full-year basis, growth accelerated.

Fortunately, Fox is a Fair & Balanced network, so Payne's attempt to pin all the blame on President Obama didn't go unchallenged. Instead, former Clinton pollster Doug Schoen said both sides were to blame. Why? Because, he said, "we haven't done full-scale tax reform, entitlement reform, spending cuts, we haven't looked intelligently at defense, we haven't dealt with the issues of the debt and the deficit."

Uh, sorry Doug, but that's feel-good puffery with no basis in reality. GDP dropped during the fourth quarter because government spending dropped. It had nothing to do with the failure to achieve a grand bargain or make even bigger cuts. It had everything to do with a 22% decline in defense spending.

Towards the end of the segment, Payne took another shot at explaining the economic slow down. "Today we got numbers out on income and spending," he said, noting that income skyrocketed. "What scared me about the report, though, was spending was really below estimates. Again, it feels like maybe the American people are beginning to hunker down."

Actually, spending growth was in line with estimates—and it grew, just as it did in the fourth quarter. In fact, consumer spending growth in the fourth quarter is a big part of the reason the quarter didn't turn into a complete disaster. Not only that, consumer spending accelerated in the fourth quarter from the previous one.

Facts notwithstanding, the image of consumers hunkering down is fairly easy to visualize, so it's no surprise that Schoen decided to agree, but with a twist. "Given that have no long-term agreement [to cut spending], consumers are doing exactly what you're saying, they're hunkering down, because they're scared."

Well, they aren't hunkering down, at least not in the fourth quarter. But if they had been, it certainly wouldn't have been because there's no long-term spending cut deal because there is a long-term spending cut deal. It takes effect on March 1. And as we learned with yesterday's GDP report, the GOP's insistence on proceeding with it—or cuts that are equivalent with it—the single biggest threat facing the economy.

Originally posted to The Jed Report on Thu Jan 31, 2013 at 08:50 AM PST.

Also republished by Daily Kos.


Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site