Thursday, October 30, 2008

Spinning the GDP

Driving to work today, SWNID heard reports that the quarterly GDP report was coming this morning and was expected to show a drop between 0.5% and 1%.

The annoucement is that GDP dropped for the quarter at a rate of 0.3%. That means things are 40-70% better than feared.

Here's how the AP story interprets the event (emphasis and de-emphasis inserted):

The economy jolted into reverse during the third quarter as consumers cut back on their spending by the biggest amount in 28 years, the strongest signal yet the country has hurtled into recession. . . .

While the third-quarter's contraction wasn't as deep as the 0.5 percent annualized decline analysts expected, the poor showing underscored the terrible toll of the housing, credit and financial crises.

Not denying the epochal events in the world of finance in the last several months, we nevertheless note that MSM reports have been anticipating an economic recession now for at least a year and have been repeatedly disappointed that figures still don't show two consecutive quarters of economic contraction. The apocalyptic imagery attached to this better-than-expected report is hardly a surprise, then.

Of course, the current quarter could reveal additional contraction, even deeper than the previous quarter's. Or the current quarter could have a shallower contraction. In either case, we'd meet the classic definition of a recession at last! We will surely be told as much if such transpires. On the other hand, the GDP could recover to grow slightly. In that case we will surely be told that the recovery is weak and that it doesn't benefit everyone.

We do thank the AP for noting that the GDP declined 1.4% in the third quarter of 2001. We recall a different kind of crisis then, though one also largely related to finance because of who happened to be the tenants of the World Trade Center. The journalists did leave it to the reader to do the math and realize that this contraction is a little more than a fifth the size of the previous one.

The end of any business cycle is contraction, of course. But as long as the business cycle is portrayed as the direct outcome of Presidential politics, one can expect that recessions will be excitedly anticipated in the political season.

Yet we caution more carnivorous conservative brethren not to attribute such tendentiousness entirely to the media's leftishness. What journalists want more than anything is a story. Readers don't read dull stories. But if the reader is the victim in the story, the story is always exciting. "Attention Worrywarts and Whiners: You're Not as Bad Off as You Think"* is simply not as compelling as "World Ending: Virtuous, Shrinking Middle Class Hardest Hit." Or at least not as self-serving.

*Attention commenters: yes, we know that real people suffer real economic hardship in recessions. Even our cold, reptilian heart responds to such things. We simply note that not as many are suffering as in the past, nor as much overall, and that what many experience is not worthy to be called suffering.

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