The Associated Press's coverage of the U.S. economy is undergoing its own presidential transition.
One might expect a bit of chaos as the AP moves from frequently and inordinately praising and defending the historically awful economy we've seen during the past eight years under a Democratic administration to eventually downplaying and bashing it at every opportunity once a Republican takes over. The best example of that chaos is found in its claim (with "expert" help, of course) that the economy grew as fast as it realistically could during the Obama administration, while unwisely laying down an unmistakable marker that it can't and therefore won't grow any faster during Donald Trump's presidency.
The AP's November 10 report on the economy Trump and the nation face exemplifies the wire service's bias-shifting struggles.
Let's start with its headline: "THE ECONOMY THAT TRUMP INHERITS: DURABLE BUT SLUGGISH."
By the AP's "durable" benchmark, the following accomplishments in sports are also "durable":
- a baseball player with a batting average barely over .200 every year.
- a basketball player who consistently hits 30 percent of his or her shots.
- a running back in football who always gets about two yards per carry.
No, guys. Those performances are only "sluggish." The economy under Barack Obama, which has never seen annual growth top 2.6 percent, and has had the longest streak of sub 3.0 percent growth on annual record, going back to 1929, has been similarly sluggish, awful and unacceptable.
Reporters Paul Wiseman and Christopher Rugaber did acknowledge the mediocrity, but gave it a misleading positive spin:
Since the recession officially ended in June 2009, growth has averaged a subpar 2.2 percent a year. Yet at 89 months old, this is the fourth-longest of 33 recoveries from recession dating to 1858, according to the National Bureau of Economic Research.
The problem is that the nation has not experienced an uninterrupted "recovery" that is 89 "months" old.
Unfortunately, the wire service has the agenda-driven academics at NBER on its side. The NBER ignorantly insists that if the economy is not in recession, it must be in "expansion," even if the economy contracts for a quarter, i.e., three of those 89 "months."
That's nonsense. The AP and NBER would be correct in claiming that the economy hasn't seen an annual contraction since the recession ended, but they can't say that about the past 89 months.
The Obama economy has seen two quarters of contraction (red boxes), and seven other quarters during which gross domestic product growth per capita was virtually zero or negative (blue boxes; population growth from 2008 to 2015 was 0.8 percent per year):
By contrast, the post-downturn "expansions" as defined by NBER during the Bush 43, Clinton, Bush 41 and Reagan presidencies contained no quarters of contraction.
The best thing that can be said about the Obama economy is that it has avoided sinking into recession. Sadly, it has only managed to do so because of trillions of dollars of fiscal and monetary "stimulus" which have seriously compromised the federal government's and the central bank's long-term viability.
Also, as I noted on November 7, by one key growth metric comparing the size of the economy to its pre-downturn peak, the Obama economy "hasn't even measured up to what was seen during Great Depression's 'New Deal' era."
So what do leftists do when it's obvious that years of Keynesian economic policies have failed? Naturally, they move the goalposts.
The goalpost-moving campaign has been underway for some time, with economists producing books and academic papers telling us, among other things, that "the life-altering scale of innovations between 1870 and 1970 cannot be repeated." Max Hillary Clinton contributor and Moody's Analytics Director Mark Zandi contended during one of his monthly ADP Employment Report conference calls that because of demographic and other constraints, the 2 percent annual growth seen during the Obama years should be really be considered as impressive as three percent growth was during the 1970s and 1980s. (3 percent wasn't even considered very impressive then, Mark.)
Along those lines, Wiseman and Rugaber found an economist who contends even more forcefully that what we are seeing now is as good as it will get:
... For years, the economy has been hobbled by an older and slower-growing workforce and by lackluster gains in the productivity of its workers.
... For now, assuming that hiring remains solid with unemployment around historically normal levels, even tepid economic growth should manage to keep raising worker pay over the next couple of years, (chief global economist at Bank of America Merrill Lynch Ethan) Harris says.
Just don't expect the economy to strengthen. Growth won't likely rise much from its current listless pace of 1.5 percent to 2 percent a year, Harris says.
"There will still be a sense of disappointment in the economy for the average person, because growth isn't going to get any better," he says. "We've got to accept that 2 percent is good growth, not bad growth. That's the norm now."
It has only taken a week for Harris's and Zandi's "2 percent is the best we can do" conventional wisdom to take significant (but admittedly preliminary) hits, as an Investor's Business Daily editorial observed on Thursday:
Now They Tell Us: Trump's Economic Plan Will Boost Growth
If we heard anything about Donald Trump's proposals from mainstream economists before the election, it was that he'd send the economy into a tailspin. Now, after Trump's Nov. 8 victory, they are suddenly revising their forecasts upward. Go figure.
... During the campaign, Moody's Analytics, in a report that was widely picked up by the press, said that "the economy will be significantly weaker if Mr. Trump's economic proposals are adopted."
Before the election, the conventional wisdom was that 2% GDP growth was the best the country could expect for the foreseeable future. We were told that the U.S. was now in a "slow growth world," that we were in the midst of a "secular stagnation," that the glory days of 3%-plus growth were long gone.
In other words, the subpar growth during the past seven years had nothing to do with President Obama's economic policies. It was just a fact of life, like the weather.
Now we're hearing that faster growth isn't just possible, but is likely because of Trump's policies — policies that just happen to reverse much of what Obama imposed on the economy.
... Forbes reports that Wall Street has had a change of heart about higher Fed interest rates, because of "an outlook for higher growth" brought about by Trump's victory.
... Bloomberg reports that Barclays has upped its forecast for growth in 2017 largely because of Trump's "promised tax cuts."
Additionally, Goldman Sachs has "Stronger cyclical growth in the US" as one of its 2017 predictions.
To be clear, the higher growth predictions IBD cited don't have universal buy-in, and there's a current scarcity of specific publicly available figures. According to TheStreet.com, "growth forecasts for next year didn't budge much" after Trump's election, as "An equal number of economists, about 20 percent each of the sample, upgraded and downgraded their forecasts."
But if 2 percent is as good as it gets, virtually none of them should have upgraded their forecasts, most of which have been hovering at 2 percent or very close to that figure, at all — and the fact that they have pushed them upward means that the artificial ceiling Zandi, Harris and the AP are pushing is and always has been a convenient, Keynesian keister-covering fiction.
It will take quite a bit of patience to wait until April to see if what IBD believes is the beginning of an upward trend gets confirmed in first-quarter GDP figures. The AP, in a sign of transition chaos, has laid down a marker which, if IBD is right, will come back to bite it — and which yours truly can assure readers will not be forgotten.
But maybe we won't have to wait that long, if we learn that the Christmas shopping season went well, and that it was partially inspired by Trump-driven optimism. That's not as outlandish as it might seem. After all, the media credited 1992's strong Christmas shopping season to Bill Clinton's election in November of that year. So why can't history repeat itself — even if the media will almost definitely fail to admit it if it does occur?
Cross-posted at BizzyBlog.com.