Editore"s Note
Tilting at Windmills

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April 28, 2011

ECONOMY STILL GROWING, BUT MUCH SLOWER.... We can't say we weren't warned. Most economic observers expected to see slower economic growth in the first quarter, and Federal Reserve Chairman Ben Bernanke noted yesterday that the new GDP report would show growth below 2%. Most analysts projected the figure to be between 1.7% and 1.9%.

And this morning, that's exactly what we learned.

The American economy slowed to a crawl in the first quarter, but economists are hopeful that the setback will be temporary.

Total output grew at an annual pace of 1.8 percent last quarter, the Commerce Department said Thursday, after having expanded at an annualized rate of 3.1 percent at the end of 2010.

The U.S. economy has grown in seven consecutive quarters, but the last quarter showed a drop in the growth rate after three consecutive increases.

No one, however, seems especially surprised. January through March was a rough patch -- higher gas prices, scaled back defense spending, construction delayed by bad weather -- that many seem to expect to be short-lived. Yesterday, Bernanke said the Fed still expects growth between 3.1% and 3.3% this year.

This, coupled with the fact that job growth over the same period was actually pretty good, is helping keep potential dread in check.

But let's not forget that policymakers in Washington still seem eager to pursue austerity measures, scrapping public investments, taking money out of the economy, and moving away from job creation. We know the practical consequences of this: an even weaker economy. For that matter, the Fed is apparently unwilling to take additional steps to improve the status quo.

We can and must do much better than 1.8%, but we won't if the nation pursues a conservative approach that focuses on one problem that doesn't exist (inflation) rather than the problem that does exist (weak economic growth).

And with that, here's another home-made chart, showing GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.

gdp1Q2011.jpg

* edited for clarity

Steve Benen 8:50 AM Permalink | Trackbacks | Comments (9)

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Dear Republican Assholes,

Where's my job?
Have you even begun to look into the jobs situation since November of 2010?

I know that "Forced Labor" for women, and killing off our seniors rate as a higher priority for you, but I'd like to know when you're going to give us THE JOBS YOU PROMISED US?

Or, are you planning on running on jobs and the economy again in 2012?

Republicans, here's my message to you: Eat sh*t and live...

Posted by: c u n d gulag on April 28, 2011 at 8:57 AM | PERMALINK

There's no doubt in my mind that Republicans are doing everything they can to sabotage the economy in advance of next year's election. They were happy to stimulate the economy with plenty of spending prior to the 2004 election. They're not as economically illiterate as they pretend to be. They know what priming the pump means. Their real economic aim is to continue redistributing the wealth upward and keeping wealthy contributors happy. But if it takes spreading some manure around the base, they'll do that too.

When Obama let Olympia Snowe and Susan Collins make the stimulus package less effective, he put his second term in severe jeopardy. We knew it then and it appears this has been the GOP strategy all along. The Dems best hope is that the GOP base simply burns down its own house, which is a possibility given its hysteria bordering on insanity. The GOP's smart guys want Mitt Romney and it's his nomination to lose. Romney has no core beliefs, which makes him the ideal candidate of a party with no moral center.

Posted by: walt on April 28, 2011 at 9:11 AM | PERMALINK

America has been distracted by the birther controversy. We would be much farther ahead if BHO had released his birth certificate two years ago and allowed us to focus on other issues.

Posted by: Al on April 28, 2011 at 9:15 AM | PERMALINK

Hi Al:

"We would be much farther ahead if the idiot wing of the idiot party refrained from ridiculous lies and grandstanding and allowed us to focus on other issues.

Fixed that for you.

Posted by: bignose on April 28, 2011 at 9:22 AM | PERMALINK

In politics timing is as important as the party's platform. This Summer will be Washington's equivalent of the Party Planning Committee on "The Office". Look busy, do as little work as possible, and still draw a paycheck.

Republican's are arguing about the "theme" for the party, while Obama is quietly building the foundation for his second term. A couple of cornerstones were laid yesterday- Petraeus and Pinetta-and it will be VERY interesting to watch their senate confirmation hearings! (Squirm, baby, squirm!)

As will the coming senate votes on Ryan and Oil (Squirm, baby, squirm!)

Posted by: DAY on April 28, 2011 at 9:25 AM | PERMALINK

Reappointing Bernanke was probably Obama's biggest mistake. I realize they believed getting conformation for a nominee that didn't tow the bank/Wall Street line was virtually impossible(see Peter Diamond), but Bernanke soils himself at the mere mention of inflation, and is willing to sacrifice employment out of irrational fear.

Posted by: Holmes on April 28, 2011 at 10:15 AM | PERMALINK

I( think it only fair that an equal number of months be shown for both Bush and Obama, which probably would not change the lesson of the graph.

Posted by: Gary Caplan on April 28, 2011 at 10:17 AM | PERMALINK

In other news, unemployment claims increased by 25,000 last week, bringing the overall total to 429,000.

But the Fed has secretly LOWERED its inflation target to 1%, which is f'n insane in this environment.

Posted by: Holmes on April 28, 2011 at 10:25 AM | PERMALINK

"We can and must do much better than 1.8%, but we won't if the nation pursues a conservative approach that focuses on one problem that doesn't exist (inflation) rather than the problem that does exist (weak economic growth)."

We certainlty won't if Dem leadership still addresses the economy through the republicans' deficit lens. I want to see top Dems (Obama, Reid, Pelosi, Shumer, Kerry, et al) reject the deficit premise in its entirety.

CREATE JOBS, ENERGIZE THE ECONOMY AND THE DEFICIT PROBLEM WILL TAKE CARE OF ITSELF. WE CANNOT "SAVE" OUR WAY TO PROSPERITY THROUGH CUTTING PROGRAMS AND JOBS.

Posted by: bdop4 on April 28, 2011 at 11:33 AM | PERMALINK
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