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Good news for people who like good news

GR2009102901663.gif"Knock knock."

"Who's there?"

"Quarterly GDP."

"Sigh. Quarterly GDP who?"

"Quarterly GDP growth, yo! I'm back!"

By Ezra Klein  |  October 29, 2009; 12:09 PM ET
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Time to give Barack Obama some f*****g credit. 6 months ago we were on the way to hell. Not that it's heaven now, but at least there's some light out there.

Posted by: impikk | October 29, 2009 12:16 PM | Report abuse

If government transfer payments are removed from the GDP analysis, growth is negative in 3rd Q.

These numbers are a nothingburger, manipulated within a hair's breadth of their lives.

Posted by: JimPortlandOR | October 29, 2009 12:18 PM | Report abuse

Obama does deserve credit for helping to get a "stimulus" that is in fact *only* keeping job losses at this level, and not far more drastic.

Some imagine this was only a recession, others that it was worse, but now we'll work gradually out of it.

No, we were in for a greater depression, and that's been held back...for now. But the forces are only countered some. The most likely path is without radical changes is ...Japan.

Posted by: HalHorvath | October 29, 2009 12:23 PM | Report abuse

haha. that was so nerdy it's almost cute

Posted by: lupercal | October 29, 2009 12:51 PM | Report abuse

Man, some people just can't take good news, can they?

Posted by: adamiani | October 29, 2009 1:08 PM | Report abuse

Try as I might I cannot spin this as a bad thing.

Posted by: bmull | October 29, 2009 1:09 PM | Report abuse

JimPortlandOR - what do you mean by "government transfer payments?" Are you referring to stimulus? Because there's no way that the portion of the stimulus spent in the third quarter is >3.5% of the US economy. Please enlight me.

Posted by: CarlosXL | October 29, 2009 1:20 PM | Report abuse

as i've said before this is good news, very good news. President Obama deserves every credit in the world from bringing us back from the edge of financial collapse more than I think honestly McCain would have done had he been voted in as President. That being said its his policies now of "band-aid'ing" problems instead of fixing them that will keep this recovery long and slow. The jobs are not coming back (at least not the non-government ones) and they may not ever come back to the way they were.

At some point when the administration realizes that small businesses need to be incentivized to hire again and give those small business tax credits then we'll see the job growth finally move in the right direction. It won't be enough, but it'll be a start. Oh and they have to find a way to have banks lend to small businesses too so that they can become productive again instead of stagnant as they have been over the last year.

Posted by: visionbrkr | October 29, 2009 1:21 PM | Report abuse

*haha. that was so nerdy it's almost cute*

Nerdy would have involved a number-based pun or some other kind of math joke. The word you were looking for was "dorky."

Posted by: constans | October 29, 2009 1:27 PM | Report abuse

Dunno, Constans. Getting geeked about statistical data of any kind has a certain nerd appeal.

Posted by: adamiani | October 29, 2009 1:34 PM | Report abuse

When you think of how close we came to the edge just 12 months ago, this is really remarkable. It seems pretty clear that the drastic measures started by Paulsen and then continued in the Obama administration have been successful in averting a disaster (so far).

Posted by: rlplant | October 29, 2009 1:43 PM | Report abuse

Man, some people just can't take good news, can they?

Posted by: adamiani


Hey, I'd take all the good news I can get. As I see it, a metaphor is roughly that we are in Nor'Leans and a major hurricane is hitting, and most people don't have any access to information like radar of the storm, etc., and they are hoping and wanting to the storm to ease. The stimulus is like reinforcing the levees and getting all the pumping stations, is it a Cat 3, a Cat4 or a Cat5?

Everyone will know in a couple of years, but some people think they have some pretty strong indicators. (a quarterly GDP isn't such)

Posted by: HalHorvath | October 29, 2009 1:44 PM | Report abuse


Band-aiding private sector job growth is hardly limited to the Obama presidency. Private sector job growth has been flat on it's back for more than a decade now. Without non-governmental (or at least government subsidized) I don't know what the people of this country would do. See the terrifying graphs in this post by Marc Thoma:

Obviously something needs to be done. It's just that I don't know what...

Posted by: nklein1553 | October 29, 2009 2:00 PM | Report abuse


"Without non-governmental (or at least government subsidized)"

Should read:

Without government (or at least government subsidized) jobs

Posted by: nklein1553 | October 29, 2009 2:02 PM | Report abuse

JimPortlandOR: what difference does that make? If you remove the activity of businesses incorporated in Delaware, growth would also look smaller. But those corporations exist and so does the government, and both function to transfer trillions of dollars around hither and thither, aka "GDP." So why pretend they don't when measuring economic activity?

Posted by: JonathanTE | October 29, 2009 2:39 PM | Report abuse

JimPortland -

Government transfer payments actually shrank in 2009Q3, from $2,107Bn at an annual pace to $2,098Bn at an annual pace, and therefore such payments were a drag on economic activity.

I will grant that 1.66% of GDP growth was due to automobile production spurred by CARS, but there was probably several tenths of GDP taken away as CARS almost certainly chipped away at inventories. Sans those effects, GDP growth probably would have been 2.5% for the quarter. However, we must consider that if CARS hadn't been enacted, then some of the money spent on cars would have been direct to other areas too, and so GDP growth in the absence of the program probably would have been 2.8%-3.0%.

Residential real estate added 0.5% to growth, and most of that probably would have happened with or without the homebuyer tax credit given how depressed the housing market had become.

Finally, its difficult to determine the impact of ARRA, but it has probably been minor. Since ARRA has only managed to create 30,800 jobs since it was signed - in an economy in which creating 2,000,000 jobs is correlated with 3.0% growth - its impact has probably been minimal, perhaps a few tenths of a percent of GDP in Q2 and Q3 including spillover effects.

All in, you can never know what would have happened otherwise, but I'd imagine that in absence of government stimulus Q2 and Q3 GDP growth would have been -1.0% and +2.75%, vs. -0.7% and +3.5%, respectively.

Posted by: justin84 | October 29, 2009 4:44 PM | Report abuse

Well, that was kind of funny. I 'spose if economics were served like that more often, people might pay more attention.

Posted by: leoklein | October 29, 2009 6:02 PM | Report abuse

ezra! were you aiming for that title to be a modest mouse reference? if you did, you missed the mark by just a bit; it shoulda been "good news for people who _love_ good news"


Posted by: cutflower | October 29, 2009 9:21 PM | Report abuse

justin, you say " an economy in which creating 2,000,000 jobs is correlated with 3.0% growth..."

That's a critical assumption. What is the time period from which that correlation is derived?

Posted by: HalHorvath | October 30, 2009 12:57 PM | Report abuse

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