Real GDP growth was closer to 0.7% annualized in the fourth quarter of 2011.
They say 2.8% (or 0.7% for the quarter) but that figure assumes that inflation was 0.4%.
Inflation--just the way the government figures it right now!--was 3% in the 4th quarter.
See, if the feds figured inflation today the way they figured it in the 1970s we'd be seeing inflation figures of 10% or more. But they exclude food and energy from their calculations, and if you look at how prices have been going you'll find that food and energy cost more than ever.
But! You can buy a 2nd generation iPad for less than the cost of a 1st generation iPad, so you're actually getting more for your money now!
"I can't eat an iPad." Yeah. And you can't run your car or heat your house on an iPad, either. This just goes to show how unrealistic the government numbers are; the average person can't ignore the rising costs of food and energy just because they tend to be "volatile".
So 3% inflation is much lower than the real levels of inflation we're seeing; and at that if you plug that artificially low 3% figure into the equation in place of the ludicrous 0.4%, what do you get?
The consumer price index, which is put out by the US Census Bureau, had prices up 3 percent for the year.Emphasis added.
And the rate of inflation used in calculating the third-quarter 2011 GDP was 2.6 percent; in the first and second quarters, combined, the rate was 2.5 percent; it was 1.9 percent in the fourth quarter of 2010.
So how does the Zero-Point-Four-Freakin’ percent sound now?
That’s how Commerce got to the not-very-inspiring 2.8 percent growth it reported last Friday.
Let me put this another way in case you are missing my outrage.
If the inflation figure used in last Friday’s GDP figure had just remained the same as the 2.6 percent rate from the third quarter, Washington would have had to report fourth-quarter annualized growth of just 0.6 percent.
(Calculation: Inflation was lowered by 2.2 percentage points. So subtract 2.2 percent from the 2.8 percent growth to get 0.6 percent.)
And that’s an annualized rate. So divide the 0.6 percent by four quarters and the economy expanded at an itsy-bitsy, teeny-weeny 0.15 percent in the fourth quarter.
0.15% is the real GDP growth for the fourth quarter, using the government's own numbers. The numbers it says we're all supposed to use, that is, not the internal numbers the various agencies use when they want to issue press releases that make Obama look good in an election year.
0.15% is perilously close to "zero growth".
Thanks to how GDP is calculated, though, government spending contributes to GDP, and growth in government spending raises GDP. Since Obama took office, there have been systematic attempts to raise government spending and reduce imports (like Obama's tariff on Chinese tires) both of which will raise GDP without actually increasing the size of the economy. In fact, the more money government spends, the less money is available to the private sector. There's a point at which each new dollar of government spending ceases to return even as much as one dollar to the economy, and we've been past that point for a couple of years now; the GDP calculation doesn't reflect this--it can't--but government spending has now begun to nibble away at the real economy.
So GDP growth has been "positive" and will remain so as long as the Bank Party continues to run things the way it always has. But the economy is not expanding; if it were unemploylment would not be at an all-time high. (And those numbers are, of course, also being fudged by both sides, since if the real state of the economy becomes widespread knowledge few incumbents will win re-election this November.)
The article concludes with the implication that the January employment figures will make Wall Street shit bricks, but I disagree: no one keeps his cushy office in Washington, D.C. if those jobs numbers look horrible (ie "reflect reality"). Oh no. Obama in particular needs unemployment to be under 8% before November--preferably long before--and so it will be, and reality be damned.
* * *
I feel his pain.
In 1983, when I got my C-64 and 1541 floppy drive, I set out to write--in BASIC--a D&D character generator program. I used character graphics to do things like display a diagram of alignments, and all kinds of other things.
One night I decided that I'd erase a few of the older versions...and ended up formatting the disk by mistake.
Commodore didn't have anything like DOS in the computer itself. You had to send commands to the disk drive via the serial bus using these arcane commands:
OPEN 15,8,15...only instead of "S" (for "scratch") I typed "N" (for "new") and the disk drive obediently wiped out everything on the disk. By the time I twigged to the fact that this is taking too long it was already too late and my work was gone. All I had was a weeks-old backup copy on another disk, and I was so discouraged by my mistake that I never did finish the program.
(HELL NO I didn't type that command from memory. Google turned up this copy of the C-1541 User's Manual.)
This kind of thing is why I have about 40,000 versions of each novel on my hard drive, why I save each new version by date. So a filename might look like "Really-cool-story-02/02/12" and then right above it is "Really-cool-story-01/29/12" and "Really-cool-story-12/21/11" and so on.
It's not 100% foolproof but WTF--a sample novel on my computer, with 31 old versions, takes up barely 8 MB on a 320 GB drive. The storage space is cheap enough so why not keep 'em instead?
Besides, that way--a hundred years from now--scholars can go back and examine how the classical works of Hering evolved.
...and while I'm dreaming I'd like a winning Powerball ticket.
(Eh? "Why not a pony?" Do you know how many ponies I could buy with $35 million? Even after taxes??)