A month later, however, we have the revision of the GDP report for the last three months of 2004. The new data show a much stronger economy.
The initial estimate of 3.1 percent GDP growth for last year?s fourth quarter was revised upward to 3.8 percent. Business investment was revised higher to 18 percent from 14.9 percent. Included in this, the rise in non-high-tech business investment outstripped high-tech investment (by 15.2 percent to 13.7 percent, both at annual rates) for the first time since 1994. Private-sector domestic output -- what Economics 101 students might remember as consumption plus investment (or C+I) -- came in at an outsized 5.5 percent growth.
So what did the New York Times do with this upbeat economic story? It buried it. Rather than place the news on the front page of the business section, the Times editors shoved it on page B4. Instead of carrying a senior reporter?s byline, the copy came from Reuters News Service.
At least the Reuters story accurately reported that GDP grew by 4.4 percent in 2004, ahead of a 3 percent rise in 2003, for the strongest gain in any year since 1999. Reuters also had the good sense to note the big gain in business capital investment and a much stronger performance for export sales.
I?m still wondering why the New York Times relegated this good news to the back pages of its business section. After all, on the Friday the report hit, the stock market rallied smartly on word of a stronger-than-expected economy.
But really -- why should I wonder? A big economic gain in 2004 suggests nothing less than a bona fide Bush boom. Not only that, the boom is being propelled in considerable part by the supply-side tax cuts that President Bush and Congress put in place in mid-2003. Since that time the economic recovery rate has roughly doubled. Unemployment has fallen. Stocks have risen. Inflation remains tame. Interest rates remain low. And family wealth is at a record high.
Let me guess: The Bush-bashing New York Times just won?t get honest about America?s economic health and the merits of the Bush policies that have led to such strong economic performance. Even more, the Paul Krugman-influenced Times refuses to concede the economic growth power of lower marginal tax-rate incentives.