To no one's surprise, the president used the latest weekly address to tout the latest gross domestic product report, which showed a growth of 3.5% in the previous quarter. To no one's surprise, the president credited his own administration's actions including the stimulus, his foreclosure prevention, and bailouts.
The problem of course is that no one knows what causes a recession to end, including the economic cycle itself. The problem for the president is that GDP is an economic number. The unemployment rate is both an economic and political number. By that, no one much cares what the economy grew at if there's no jobs. The president knows this and that's why in his words, "we still have a long way to go". In mid 2002, the economy also began growing but it wasn't until July of 2003 before jobs began to return. Then, it was the Democrats screaming jobless recovery.
The president also touted his administration's own analysis that the recovery act "created or saved" one million jobs. Since the administration can't define what a "created and/or saved" job is, I suppose he's right. If it is whatever they want it to be, then by all means, the recovery act created or saved one million jobs. The problem is that the economy lost almost 4 million jobs and counting and so no one really much cares what the administration believes about the recovery act.
The day after the GDP numbers came out, October's consumer spending and income came out. They were both flat and disappointing. Normally, the broader GDP is a much better barometer, however the markets didn't agree. The markets took a much bigger dive following the release of those numbers then they did respond favorably the day before following the GDP release.
The administration has actually given an overwhelming amount of credit to both cash for clunkers and the first time homebuyer's credit. There's no question that both has spawned economic growth. The question is just how temporary and artificial that growth was and is. For instance, car sales were down dramatically the next month. The first time home buyer's credit was extended but will end. At some point, we'll need to sell homes without the $8000 temptation. Will homes sell then? That remains to be seen.
The president touted building grids, roads, and bridges but that's nothing more than political posturing. Most of those jobs are temporary anyway. That is now the question moving forward. How much of this growth is sustainable? That will only be answered with time.
House leader John Boehner delivered the response. He spoke about health insurance and care reform. He laid out four principles. These aren't new: buy insurance across state lines, allow small businesses, homeowners, etc. to pool together and buy insurance, end junk lawsuits (tort reform), and allow states to innovate on their own.
There's almost no disagreement that allowing health insurance providers to sell insurance across state lines is a good idea. That would get over 80% approval in most polls. The same really goes for all four ideas. The first two are simple to implement while the last two sound good in theory. They would have to be combined with tangible legislation and implementation.
Still, the Republicans have done a remarkable political job. They've found a handful of issues that are overwhelmingly approved by the people. They've stood for those. Then, they've painted the Democrats as for being for a government takeover of health care. What you will hear over the next week over and over is 1990. That's how many pages the Pelosi bill clocks in at. It's another quantifiable way to judge just how much of a takeover it is. It should also scare all sorts of people. Unless you want to read and understand every part of the bill, you will just have to trust Nancy Pelosi about what is in it. Anyone willing to do that should call me because I have great bridge to sell you in Mogadishu.