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The Government's Newest Stupid Human Trick

The opinions expressed by columnists are their own and do not necessarily represent the views of

Okay, so you can call me the glass-is-half-full-of-it kind of guy.

But don’t say that I didn’t warn you.

That second-half rebound that economists were talking about in the first half of the year? Well, it hasn’t materialized.


Like you I’m shocked.

My shock, however, has to do with the fact that the media gets snookered year after year with the “consensus” forecast from analysts, stock pickers, QE types and economist on the government dole, who say that in the second half, the economy will be much brighter than it was in the first half.

Durable good orders just came out for the first month of the second half—a month also known as July-- and boy, did the data stink.

“The Commerce Department said Monday that orders were down 7.3% in July from the previous month,” reports the Los Angeles Times, “the first drop since March and the biggest falloff since August 2012. Orders had been up a revised 3.9% in June. Analysts had projected a 4% drop last month.”

And with a government so compelled, seemingly, as the Obama administration is, to cook the books for every number, forecast and data point, one has to wonder whether the data for July was as good as the bad estimate that the Commerce Department just released.

Remember: I’m a glass-is-half-full-of-it kind of guy.

Good is bad and bad is good especially when it comes to goods, durable or otherwise.

You good on that?


Because, most assuredly, the stock market is good on it.

Durable goods are just the latest bad data point that the stock market will adore. They'll adore it because it means that quantitative easing (QE) could go on for quite a bit longer.

Behind the scenes, Federal Reserve regional presidents are bickering about the necessity and wisdom of more QE. Today the risks associated with QE, like inflation, for example, are beginning to outweigh any possible short-term benefit that QE supposedly brings.


That’s because – I’ll say it again folks – our problems are not economic; our problems are political.

That problem that we have where the economy is only creating part-time jobs? That’s a political problem, not an economic problem.

That problem where we enjoy an all-time high money supply, yet that money isn’t circulating in the economy?

That’s a political problem, not an economic problem.

That problem that we have where banks can make more money by doing nothing-- or doing something in the stock market-- rather than loaning money to people on Main Street?

That’s a political problem, not an economic problem.

To give you an idea of how scared government types are about what’s really going on in the economy just remember this:

Last month’s Stupid Human Trick by this administration on the economy was cooking the GDP books for the second quarter of 2013.

As our own Mike Shedlock pointed out, without an unusual calculation in July to figure GDP for April, May, and June, GDP would’ve come out at 0.8%, versus the administration’s historical average of 0.6%, average annually.

Instead they told us “All is well: We posted 1.7% average annual GDP growth for the quarter.”

But don’t worry because the second half is really going to pick up.

Last year’s second half was so great thanks to this Stupid Human Trick: Obama moved government orders up to the third quarter helping the administration post a 3.1% annual gain in GDP quarter-over-quarter. It worked. It was just enough to get them reelected.


“The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, federal government spending, residential fixed investment, and exports,” reported the Bureau of Economic Analysis in November 2012.

But the third quarter in 2012 was more than half full of it.

Because the fourth quarter in 2012 saw only a 0.1% increase in GDP.

“The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment that were partly offset by negative contributions from private inventory investment, federal government spending, exports, and state and local government spending.”

What the government gave in the 3rd quarter, it took away in 4th. In other words, when you averaged out the second half, we narrowly averted a recession going into the first half of this year.  

That makes the Democrats under Obama a lot more than half full of it, Stupid Human Trick or no.

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