Misleading Economic Numbers Obscure Jobless Recovery

Back in the 1980s, White House officials joked about how the news media stopped using the term “Reaganonomics” once the economy began to turnaround. There was no Internet, or alternative news media to offset the media blackout; just the great communicator himself and the common sense of the American media.

Likewise, George W. Bush did not have a friendly news media to laud the success of  his tax cuts during the 2004 campaign when the economy was churning jobs and the stock market was rising.

But Barack Obama does have the media as cheerleaders and this is very evident in a Jan. 30 New York Times piece that reports on the “vigorous pace” of economic growth in the final quarter of 2009. It’s perfectly appropriate to highlight encouraging numbers that come on the heels of a recessionary year. But this is the same newspaper that repeatedly sought to dismiss that non-inflationary robust growth rates under Reagan as a “decade of greed.”

The Times article does make an important concession (several paragraphs down) that the numbers used by the Obama White House actually overstate economic performance. The fact that businesses sold off their inventory and did not replace it added 3.4 percent to the growth rate. This means the actual figure should have been 2.3 percent instead of the inflated 5.7 percent.

Moreover, we are in the midst of a jobless recovery that could be short-circuited by heavy-handed government policies that burden business owners, Steve Forbes warned during a recent congressional hearing. Instead of putting capital to work, small business owners and entrepreneurs are retrenching in anticipation of  potentially burdensome legislation set up to benefit organized labor at the expense of the larger economy, he explained.

“Go back to the Great Depression when the government had forced unionization,” Forbes said. “The U.S. had one of the worst recovery records in the 1930s but after World War II when the government did nothing to the economy except cut spending with a few small tax cuts and the reform bill of Taft-Hartley and low and behold we experienced a post war boom.”

The “culture of favoritism” is one of the main factors holding back what could otherwise be a robust recovery, he continued, because the Obama policies are fueling artificial price increases that have come not in response to consumer demand but to “government diktats.” 

This is kind of historical reference that would have put the misleading economic numbers into great perspective. Once again, this is more about what The New York Times chooses leave out, than it is about the half-truths that are included.

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