Today the Bureau of Economic Analysis (BEA) released their second estimate of 2nd quarter GDP Growth. As has usually been the case in the Age of Obama, the numbers are dismal, falling roughly 30% from last month’s advance estimate of 1.3% to 1.0%:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.0 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.4 percent.
The GDP estimates released today are based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 1.3 percent (see "Revisions" on page 3).
What this means is that the economy is flat lining. The latest data clearly indicate that the odds of a double dip recession are increasing. Indeed the Philadelphia Fed pegs the probability of that very outcome at 85.7%:
The Philly Fed puts a recession probability at 85.7 percent, while the consumer survey puts contraction chances at 80 percent, according to Bank of America’s probability model, which uses a so-called Bayesian technique that “tests if the economy is in a recession based on the interaction of variables that are associated with turns in the business cycle.”
Peter Schiff goes even further:
“It’s a 100 percent chance,” said Peter Schiff, CEO & Chief Global Strategist of Euro Pacific Capital. “In fact the recession might have already started.”
Meanwhile, Obama is on vacation in Martha’s Vineyard, promising to have a "jobs plan" at some point in the future, never mind he’s been the president for nearly three years now. I suppose it doesn’t matter that much, though, as whatever "brilliant" plan he comes up with will undoubtedly fail as it will be more of the same: Borrow money, spend money, print money, and regulate more, as Governor Palin recently explained to Lou Dobbs:
This bleak economic outlook, of course, is entirely predictable given Obama’s economic illiteracy and hostility to free markets. Last month when the BEA released their advance estimate of 2nd quarter GDP growth, I created a chart comparing the relative track records of Ronald Reagan and Barack Obama with regard to the economy. Here it is again with the latest BEA data added:
|Quarter||Reagan(GDP Growth)||Obama(GDP Growth)||Reagan(Avg. Unemp. Rate)||Obama(Avg. Unemp. Rate)|
In a piece in today’s Wall Street Journal, economist Stephen Moore also compares Obamanomics to Reaganomics:
If you really want to light the fuse of a liberal Democrat, compare Barack Obama’s economic performance after 30 months in office with that of Ronald Reagan. It’s not at all flattering for Mr. Obama.
The two presidents have a lot in common. Both inherited an American economy in collapse. And both applied daring, expensive remedies. Mr. Reagan passed the biggest tax cut ever, combined with an agenda of deregulation, monetary restraint and spending controls. Mr. Obama, of course, has given us a $1 trillion spending stimulus.
By the end of the summer of Reagan’s third year in office, the economy was soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In 1983 and ’84 output was growing so fast the biggest worry was that the economy would "overheat." In the summer of 2011 we have an economy limping along at barely 1% growth and by some indications headed toward a "double-dip" recession. By the end of Reagan’s first term, it was Morning in America. Today there is gloomy talk of America in its twilight.
My purpose here is not more Reagan idolatry, but to point out an incontrovertible truth: One program for recovery worked, and the other hasn’t.
Indeed. Governor Palin has frequently and passionately argued for a return to the time-tested, common sense economic policies of Reagan. It’s easy to understand why: They worked. It’s too bad that our president, despite three years on the job and a mountain of evidence, still doesn’t understand that his policies don’t.