First quarter GDP revised downward, again.

With the story about Senator Thad Cochran (R-MS) defeating TEA Party challenger, state Senator Chris McDaniel, in the Republican primary run-off election, a more important story — at least, in my opinion — hasn’t been getting the coverage it deserves. From The Wall Street Journal:

U.S. Economy Shrinks by Most in Five Years
Final Revision for First-Quarter GDP Shows 2.9% Contraction
By Jonathan House | Updated June 25, 2014 11:27 a.m. ET

Click to enlarge

WASHINGTON—The U.S. economy contracted at a faster pace than previously estimated in the first quarter, marking its sharpest pullback since the recession ended five years ago.Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 2.9% in the first three months of the year, according to the Commerce Department’s third reading released Wednesday. That was the fastest rate of decline since the first quarter of 2009, when output fell 5.4%, and matches the average pace of declines during the recession.

“GDP was recession-like in the first quarter, although most other data clearly signal that the decline is an outlier,” said Jim O’ Sullivan, economist at High Frequency Economics.

In its third GDP reading, based on newly available data, Commerce said first-quarter consumer spending and exports were even weaker than previously estimated. Consumer spending growth was lowered to 1% from 3.1% previously, largely because health-care spending was weaker than previously estimated.

Early second-quarter data indicate the economy has improved this spring as warmer weather helped release some pent-up demand. Macroeconomic Advisers Wednesday forecast the economy will grow at a 3.3% annual rate in the April to June period. But the economy’s stumble in the first three months of the year has once again dashed hopes the recovery was on the verge of switching into a higher gear.

More at the original.

As we noted previously, economists got the first revision wrong: economists had projected that the initial 0.1% growth rate estimate would be revised downward to -0.6%, when the actual revision was down to -1.0%. And now, what do we see from the current story?

Economists surveyed by The Wall Street Journal had predicted Wednesday’s report would revise GDP growth down to a 2% decline.

Well, at least they are (somewhat) consistent, consistently missing the target by a third!

We’ve said it before: relying on the projections of economists for what proposed policies will do is a pretty chancy thing, when you have professional economists, surveyed by as august a publication as the Journal, who are that much off not on projections for the future but measurements concerning what has already happened.

And now, from Fortune:

Yellen paints a gloomy picture for U.S. economy
The Fed has continued to lower its expectations for economic growth.
by Chris Matthews @crobmatthews JUNE 18, 2014, 5:50 PM EDT

The economists at the Federal Reserve practice what is known as the “dismal science,” but their projections for economic growth have been anything but pessimistic.

In fact, the Fed has consistently overestimated how quickly the economy would grow ever since the financial crisis. The following chart from Guggenheim Partners shows how the Fed’s economic growth expectations last year dropped precipitously as 2013 grew closer. In the end, even their final prediction of GDP growth of roughly 2.1% was optimistic, as the economy only grew 1.8% last year.

And the Fed’s at it once again, as it reduced its estimate for GDP growth in 2014 by more than half a percentage point, from 2.8%-3.0% down to 2.1%-2.3%. While that may not sound like much, remember that a good rule of thumb is that a single percentage point of GDP growth leads to roughly 1 million new jobs.

Given that the economy actually shrank at an annual rate of 1% in the first quarter of this year,1 a projection of 2.1% growth for 2014 implies a relatively large expected bounce back in the remaining quarters. At the same time, the Fed stuck with its projections for 2015 economic growth of 3.0%-3.2%, meaning it doesn’t expect lost economic growth this year to be made up in the years to come.

So, if the first quarter contraction was really just about the weather (as many have said), you would expect the vast majority of that economic growth to be made up in later quarters when the weather was better. Bad weather is generally thought to simply delay, rather than kill, economic activity. Furthermore, the Fed cut its projections for long-term interest rates from 4.0% to 3.75%, a change that Fed Chair Janet Yellen attributed to “a slight decline in projections for longer term growth,” in a press conference following Wednesday’s policy announcement.

A lot more at the original, but the point fits in with mine: it’s not just independent economists who have been getting the numbers wrong, but the professionals at the Federal Reserve, the ones whose economic opinions are not just ink on paper but government monetary policy in action.

At Zero Hedge, Tyler Durden noted:

In The First Quarter $250 Billion In Federal Debt Bought Negative $74 Billion In GDP

Click to enlarge

What may not be known is that while there has been at least one quarter in the past 5 years in which the US economy shrank on a CAGR basis (at least until a new and improved definition of GDP revises that away) since 2009 there has never been a quarter in which the economy shrank sequentially in nominal terms. Which is what it did in Q1, when it declined by $74 billion.

Which brings us to the topic of marginal utility of debt, extensively covered here in the past. In brief, it describes how much in “economic growth” every dollar in federal debt buys. The bad news: in Q1, US total Federal debt rose by $250 billion, to a record (duh) $17.6 trillion. This debt “bought” a negative $74 billion in GDP, which declined to $17.0 trillion. Said otherwise, this was the first quarter since the end of the recession when debt rose (by a whopping amount), and when GDP declined sequentially in nominal terms.

More at the link.

Now, I have a bit of a problem with Mr Durden’s chart: note that the change to the total federal debt was negative in the second quarter and zero in the third. Those figures are not accurate. Rather, they reflect the fact that the Treasury Department simply lied, ceasing reporting of the national debt during the last debt ceiling conflict. Then, once that was resolved, all of the debt actually incurred was reported as fourth quarter debt. However, Mr Durden is discussing first quarter debt for 2014, which was (supposedly) accurately reported, and it has yielded contraction in the economy. More importantly, the first quarter of 2014 was the third quarter in a row in which the change in GDP shrank. That doesn’t fit the definition of recession, but it’s a worrisome sign. The economists that the Journal cited, who believed that GDP would grow by over 3% in this current quarter, really, really need to be right.

And they could be right, but, at the moment, I don’t have a lot of confidence it that. Since the left won’t be able to blame snow and ice for the second quarter numbers, if they are good, it will be due to President Obama’s wise policies, and if they aren’t very good, it’ll be back to blaming George Bush!

  1. This article was published prior to the latest GDP revision.

Chris McDaniel: Man up!

Remember how pissed off we were when the Democrats tried to change the rules in 2000, to steal the election for Al Gore? Now Chris McDaniel is saying, “Before this race ends, we have to be absolutely certain that the Republican primary was won by Republican voters.” Well, sorry, Mr McDaniel, but the rules were that Democrats who didn’t vote in the initial primary cycle could vote in the Republican run-off, and Senator Cochran’s campaign encouraged just those Democrats to vote for him in he Republican primary run-off. It can be argued that those are lousy rules, but Mr McDaniel chose to run under those rules when he started. I’d have rather seen Mr McDaniel win, but he just flat didn’t.

Senator Cochran played hardball, and he won. If Mr McDaniel challenges the legality of the result, the only thing that he can do is to help the Democratic nominee. It’s time for Mr McDaniel to man up, and not be a stinking crybaby.

Kathleen Kane makes a fool of herself . . . again.

I was going to post, yesterday, about this story from The Philadelphia Inquirer, in which our very pretty but intellectually vacuous Attorney General, Kathleen Kane, rather than admitting that she had been wrong concerning her allegations that then-Attorney General, and now Governor Tom Corbett (R-PA) delayed the investigation into the child sexual abuse allegations against former Penn State assistant football coach Jerry Sandusky for political reasons, instead doubled down, charging that the methodical pace of the investigation led to more children being abused. But, instead of completing the half-written story, I spent the evening talking with my darling bride (of 35 years, one month and six days), which wasn’t a bad thing to do at all.

And now, it has turned into a good thing, because, once again, Attorney General Kane has been caught with her thong panties down.

Kane admits error in Sandusky statement
She said that part of Monday’s account was wrong, but that probe pace still might have let him strike again.
By Angela Couloumbis Craig R. McCoy and Jeremy Roebuck, Inquirer Staff Writers | Last updated: Wednesday, June 25, 2014, 3:00 AM | Posted: Tuesday, June 24, 2014, 1:13 PM

HARRISBURG – On Monday, Pennsylvania Attorney General Kathleen Kane said there were “inexplicable delays” in the Jerry Sandusky investigation and suggested that may have set the stage for two more young men to be victimized.

She said the two told prosecutors they had been abused while the state was undertaking its 33-month investigation. Kane said she could not give details except to say the two were not among the 10 victims Sandusky was later charged with sexually assaulting.

Late Tuesday, Kane’s office acknowledged that she misspoke – that Sandusky had indeed been charged with abusing one of the young men. In fact, prosecutors had called him to the stand during the 2012 trial and a jury convicted Sandusky of abusing him.

On Tuesday, one day after Kane released a report that failed to affirm many of her complaints about the Sandusky investigation, the focus turned to Kane herself and her new charge that a bogged-down investigation may have enabled Sandusky to strike again.

Pennsylvania’s lovely and leggy, but not very bright Attorney General, Kathleen Kane. Click to enlarge.

More at the original.

What we have gone from is Mrs Kane’s assertion that two boys were assaulted by Mr Sandusky after the investigation began but before he was charged to more children could have been assaulted during the time it took for the prosecutors to investigate the case and find enough evidence to have Mr Sandusky arrested and charged.

And that’s absolutely true: it could have happened, and we are fortunate that it did not, or at least there is no indication that such occurred. But that’s the case in many, many criminal cases, cases in which some time has to be spent investigating and gathering evidence before charges can realistically be brought, and the independent prosecutor she appointed to investigate the claims she made during her 2012 campaign stated that the state’s investigation procedures concerning Mr Sandusky were reasonable.

So, once again, the lady who was so recently called the Democrats’ new “it girl” in Pennsylvania has made a fool of herself, a task made considerably easier by her being a fool in the first place. Mrs Kane knew that the report was going to exonerate Governor Corbett, and she knew that the report was going to state that the investigation, while it could have proceeded faster and more efficiently, was done reasonably, and she knew that the report was going to state that using a grand jury to investigate the allegations was reasonable and proper, before the report was released; the report’s findings were released in The Philadelphia Inquirer before the official release of the documents. She knew all of this and had time to consider her response before she made it, and she still fouled up. Her response was not that of a wise woman.

Attorney General Kane is simply in over her head; she is not competent to hold the position she has.

The brutal choice in Iraq

In a strangely uncovered story, 1 Prime Minister Benjamin Netanyahu of Israel offered this advice for President Obama:

(W)hen your enemies are fighting one another, don’t strengthen either one of them. Weaken both.

The video is below the fold, because it’s an annoying autostart

That’s sort of the reverse of what we have said previously on this site, that we ought to provide just enough assistance to the Syrian rebels that they can keep on fighting, but not enough to win, because that will leave whichever side eventually wins in Syria having been so weakened and having to deal with so much death and destruction that they’ll have neither the time nor the money nor the ability to engage in foreign mischief. To your Editor, in fleshing out Mr Netanyahu’s statement, weakening both sides ought to mean strengthening both enough for them to weaken each other.

The problem in Iraq, spilling over from Syria, is that the Islamist rebels couldn’t win in Syria, but are doing much better in Iraq, against the government of Prime Minister Nouri al-Maliki, who was not-quite-directly-selected by the United States. We really don’t want them to win, and even President Obama doesn’t want them to win, but unless he strengthens and supports Mr al-Maliki’s government and army, that would seem to be the more probable outcome. Since the Prime Minister is a Shi’ite, and the Shi’a are the majority in Iraq, Iran has expressed some interest in supporting the majority Shi’a government; the rebels are predominantly radical Sunnis.2

So, let’s be realistic, coldly realistic here: Prime Minister Netanyahu was right in stating that the best thing that the West can do is to weaken both sides, but you can’t weaken both sides, by yourself, without actually fighting both sides. The only realistic way is to help the weaker side, up to the point at which it can continue to fight, and kill, some of its, and our, and all of civilization’s enemies, without giving them enough help to actually win, though I have my doubts that President Obama and his Administration could manage to accomplish this with any real success. The best thing for Western civilization is for Shi’a and Sunni Muslims to keep fighting and fighting and fighting until they drown in a sea of their own blood, and whoever survives will be so greatly weakened and war-weary to cause problems for the West. It’s ugly and it’s brutal, but anything that weakens the Islamists is a good thing.

Continue reading ‘The brutal choice in Iraq’ »

  1. I couldn’t find any references to any of the major professional news sources.
  2. The notion that rebels who are actually fighting in the field can somehow be moderates is silly; moderates do not fight. Moderates try to seek some sort of common ground, some sort of middle on which all sides can agree enough to not kill each other.

Kathleen Kane, wrong again!

From The Philadelphia Inquirer:

Sandusky investigation was reasonable, report finds
Craig R. McCoy and Angela Couloumbis, Inquirer Staff Writers | Last updated: Monday, June 23, 2014, 1:07 AM | Posted: Sunday, June 22, 2014, 10:48 PM

Pennsylvania Attorney General Kathleen Kane in March. (Michael Bryant / Philadelphia Inquirer Staff Photographer) Click to enlarge.

A report into the three-year investigation of serial sex abuser Jerry Sandusky found that prosecutors, facing a shaky initial witness, had reason to take their time to build a case with multiple victims, according to sources familiar with the document.Though raising questions about delays in the inquiry, the report, scheduled to be released Monday, does not fault prosecutors for using a grand jury to investigate Sandusky, the sources said. It also found no evidence that politics or a lack of resources influenced the investigation.

The report notes prosecutors from the state Attorney General’s Office felt strongly that testimony from the first boy to accuse Sandusky would likely not have been enough to convict the former assistant football coach at Pennsylvania State University.

It does question some decisions along the way. For instance, it notes that prosecutors took too long to take certain investigative steps, including gathering reports on Sandusky from other law enforcement agencies, the sources said.

The report was commissioned and will be released by Attorney General Kathleen G. Kane, who was elected in 2012 largely on a campaign that questioned whether one of her predecessors in the job, Gov. Corbett, deliberately slowed the investigation for political purposes.

In her bid for office, Kane said, “Instead of using a grand jury in the Jerry Sandusky case, I would have had him arrested after the first victims came forward.”

Kane, a Democrat, suggested that Corbett, a Republican, delayed the probe to avoid angering voters and donors. Politics, she told the editorial board of one newspaper, “probably” drove his decisions.

“You don’t put a case like that before the grand jury,” she said. “That was the leadership. Somebody made that decision that they’re going to drag that out.”

However, the review by former federal prosecutor Geoffrey Moulton concludes it was reasonable for prosecutors to build a case with many victims, the sources said. The Moulton report notes that the first victim to come forward had difficulty talking about his abuse, to police or a grand jury, and would often give only one-word replies when questioned about Sandusky’s attacks.

More at the link.1 Normally, I would not have quoted quite as extensively, but I wanted to get all of the important parts documented. Simply put, the prosecutor Attorney General Kane selected wound up saying that Mrs Kane’s statement that she “would have had him arrested after the first victims came forward” might well have destroyed the case.

And that part was already known! Jerry Sandusky had faced child molestation charges in 1998, but the Centre County District Attorney didn’t proceed because he had only one complainant, and, as we reported earlier, he was not seen as credible enough on which to base a case; Mr Sandusky would probably have been acquitted had the 1998 case gone forward.

The lovely Mrs Kane has been, in effect, found guilty of the very charges she leveled at Governor Corbett.  She claimed, in her 2012 election campaign, that then-Attorney General Corbett politicized the case by delaying it, in order to win the 2010 gubernatorial race, something the report states no evidence has been found.  Now it turns out that Mrs Kane is the one who was wrong, and she was the one who politicized the case to win her election.

Your Editor, of course, is a conservative Republican, and could be charged as being biased against Mrs Kane.  But even the editors of The Philadelphia Inquirer, a newspaper which consistently supports Democrats, editorialized that Mrs Kane’s stories keep changing, and now Philadelphia District Attorney Seth Williams, a Democrat, is convening a grand jury to pursue the charges on a sting case Mrs Kane dramatically dropped against Democratic officials.  Even Tom Wolfe, now the Democratic nominee challenging Governor Corbett for re-election, said that Mrs Kane was wrong to drop that investigation.

Kathleen Kane is an embarrassment to the Commonwealth as our Attorney General.
______________________

  1. The official report is to be released today; the Inquirer’s story was based on an early report.

From Around the Blogroll

From Jim Hoft, the Gateway Pundit:

REPORT: Judge Who Sentenced Saddam Hussein to Death – Captured & Executed by ISIS
Posted by Jim Hoft on Sunday, June 22, 2014, 10:50 AM

Judge Rauf Rashid and Saddam Hussein

Several Arab News websites are reporting the news.  Al-Mesyroon reported (translated)

There were reports of the execution of Iraqi judge, Raouf Abdel-Rahman, who sentenced Iraqi President Saddam Hussein to death, according to confirmed the pages on the social networking site, without official confirmation from the Iraqi government.

The pages on social networking sites, including Page MP Jordanian Khalil Attieh on the site “Facebook” to“revolutionaries Iraqis arrested him and sentenced him to death in retaliation for the death of the martyr Saddam Hussein,” he said, adding that Rauf tried to escape from Baghdad after wearing uniforms dancers. She page Izzat al-Douri, vice-president Saddam Hussein, the “Facebook” to the rebels Iraqis were able to arrest the Kurdish judge Rauf Rashid, who issued a death sentence against the former Iraqi leader, which is currently in the “grip of the soldiers of the Islamic State and the men of the Baath Party.”

Wikipedia says he is dead: “On 16 June 2014, Abd al-Rahman was arrested by ISIS rebels during 2014 Northern Iraq offensive. Two days later, it was reported that ISIS captured and executed him.”

Iraqi officials have not denied the news.

If the report is true, it’s not much of a surprise. I posted this primarily to note the part Mr Hoft boldfaced, where the Iraqi rebels are referring to a butcher like Saddam Hussein as a “martyr.” I hope that he’s enjoying his seventy-two boy virgins in whatever Hell he’s in.

Donna Miller of the Victory Girls wrote about Pope Francis’ action declaring a latæ sententiæ excommunication for members of ‘Ndrangheta, southern Italy’s most dangerous organized crime group.

Sister Toldjah told us about Governor Rick Perry’s (R-TX) invitaion to President Obama to visit the Texas/Mexico border.

William Teach wrote about Mark Tooley’s (rhetorical) question, “Who respects a church that only echoes the secular world?

DNW noted that Truth Before Dishonor had a liberal visitor the other day.

Darleen Click of Protein Wisdom told us about the left’s “shut-uppery” meme concerning the problems in Iraq.

L D Jackson informs us that Barack Hussein Obama really did keep a campaign promise.

Donald Douglas is just all torn up about a mother’s plea that her jihadist son return to Britain.

Patterico is just so enthusiastic about the Pyrite State getting shipped some of the illegal immigrants in Texas.

Karen, the Lonely Conservative, asks if we’ve seen some of the crap that our troops have to eat?

On the Delaware Liberal, Pandora encouraged driving under the influence.

And last, but not least, Robert Stacey Stacy McCain, the only man I know who is longer-winded than I am, used more than 750 words to write about the attempts by the feminists to make Eliot Rodger’s shooting spree an indictment of all (heterosexual) men.

 

Rule 5 Blogging: The Glam Life

It’s the weekend and time, once again, for THE FIRST STREET JOURNAL’S version of Rule 5 Blogging. Robert Stacey Stacy McCain described Rule 5 as posting photos of pretty women somewhat déshabillé, but, on this site, our Rule 5 Blogging doesn’t put up pictures of Selena Gomez in her summer clothes, but women, in full military gear, serving their countries in the armed forces. The terribly sexist authors on this site celebrate strong women, women who can take care of themselves and take care of others, women who have been willing to put their lives on the line in some not-so-friendly places, women who truly do have the “We can do it!” attitude.

This week, the absolutely glamorous life of women in the United States Army! I’m not sure how any American woman could resist volunteering for such a high fashion life in such romantic settings. Click any photo to enlarge.

military_woman_usa_army_000579

Continue reading ‘Rule 5 Blogging: The Glam Life’ »

I should be writing something absolutely brilliant now . . .

.  .  . but I have to be at work at 0430 tomorrow, so consider this an open thread and start a topic!

The answer is obvious

 

From The Jerusalem Post:

Prisoners may be anesthetized before force-feeding
Changes added to bill to make it safer for prisoners, but doctors still refuse to uphold it.
By LAHAV HARKOV | 06/18/2014 15:26

Prisoners who go on hunger strike may be anesthetized before being force-fed, if a bill on the issue passes its final vote Monday.

The Knesset Interior Committee prepared the legislation for its second and third (final) readings Wednesday, adding significant changes for the prisoners’ comfort and safety. For example only a doctor can administer the IV or gastronomy tube, and the procedure may only take place in a hospital.

Still, the Israel Medical Association instructed doctors not to uphold the law if it passes.

As such, many in the Knesset see the bill as impossible to implement and a form of posturing toward prisoners in an attempt to get them to stop their hunger strike.

The committee reached an article in the bill saying that a doctor should try as much as possible to get the prisoner to agree to be force-fed by explaining to him the adverse effects of his hunger strike on his health and detailing the force-feeding procedure. If the prisoner still does not acquiesce, the doctor can use reasonable force to coerce him into the treatment and must try to do so without causing pain and suffering.

More at the link.

OK, let me be blunt here:

  1. if the Palestinian prisoners starve themselves to death, the Palestinians will be outraged; and
  2. if the government force-feeds the prisoners, the Palestinians will also be outraged; but
  3. if the Palestinian prisoners do starve themselves to death, at least they won’t be problems any longer.

The answer is obvious: if the prisoners want to hunger strike themselves to incapacity or death, let them! Why interfere?