BUSINESS CYCLE IGNORANCE IS THE PRICE OF GOP SPIN
BUSINESS CYCLE IGNORANCE IS THE PRICE OF GOP SPIN
Two months ago, this Blog took to task the Kiplinger Letter of 2/2/07 for their ignorance of business cycles when they claimed the following:
“Growth may get pretty steamy by the second half (of 2007) as the drag from housing tails of and U.S. business spending ramps up”
This Blog pointed out that business spending is strong, even leads the early part of an economic expansion which started around 2002, but is never strong at the conclusion of the cycle. Late 2006 through the present marks the period of business slowdown heading toward contraction. Therefore, their claim that business spending would resuscitate defied business cycle analysis. Furthermore, this Blog suggested this can be chalked up to the Letter’s GOP spin. In their 4/5/07 Letter, they had to change their tune as follows:
“Current sluggishness (in the U.S. economy) will persist with a growth of 2-2.5% for 2007. The problem is business investment…Businesses just aren’t stepping up…Businesses just aren’t stepping up and the jolt expected seems unlikely…Expect capital investment to rise 4%, not 7%.”
This also contradicts a claim in the same issue that employment gains will be close to that claimed in their 2/2/07 issue when they claimed a similar level with economic growth of 3%.
To analogize from President Lincoln, better to remain silent on spin and thought a fool than to spin and remove all doubt.
Two months ago, this Blog took to task the Kiplinger Letter of 2/2/07 for their ignorance of business cycles when they claimed the following:
“Growth may get pretty steamy by the second half (of 2007) as the drag from housing tails of and U.S. business spending ramps up”
This Blog pointed out that business spending is strong, even leads the early part of an economic expansion which started around 2002, but is never strong at the conclusion of the cycle. Late 2006 through the present marks the period of business slowdown heading toward contraction. Therefore, their claim that business spending would resuscitate defied business cycle analysis. Furthermore, this Blog suggested this can be chalked up to the Letter’s GOP spin. In their 4/5/07 Letter, they had to change their tune as follows:
“Current sluggishness (in the U.S. economy) will persist with a growth of 2-2.5% for 2007. The problem is business investment…Businesses just aren’t stepping up…Businesses just aren’t stepping up and the jolt expected seems unlikely…Expect capital investment to rise 4%, not 7%.”
This also contradicts a claim in the same issue that employment gains will be close to that claimed in their 2/2/07 issue when they claimed a similar level with economic growth of 3%.
To analogize from President Lincoln, better to remain silent on spin and thought a fool than to spin and remove all doubt.
posted by Anonymous | 1:04 AM
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