It’s been a while since I ventured over to the National Review and its economic know nothings but it seems Thomas Nugent doesn’t even understand numbers. Beyond the stupidity about Nixon causing the stagflation of the 1970’s by some move to fiscal restraint (oh – it must hurt to realize that once a Republican President actually increased taxes), Nugent wants us to believe that economic growth since George W. Bush took office has been fantastic:
The adversaries of President George W. Bush are having a hard time dealing with the fact that the economy continues to do well: a 3.9 percent jump in GDP for the third quarter, a 4.9 percent increase in productivity, surprisingly low inflation, and booming exports even though “everybody around the world really hates us.” At the same time, tax-revenue data has been impressive. Since the Bush tax cuts of 2003, tax revenues have been surging (and the deficit falling) alongside an expanding economy … In terms of the seven-year economic expansion and the more recent state of the war effort, the beefs have it.
Hmm – we are winning in Iraq and tax revenues have soared so much that those massive Clinton deficits have almost turned into Bush surpluses. What a moron. Nugent reports the growth in real GDP for ONE QUARTER and then wants us to believe this has been typical for the past 6.75 years. Time to consult some BEA data. Real GDP as of 2007QIII was 17.63% higher than it was as of 2000QIV. Average annual growth therefore has been only 2.4 percent – not 3.9 percent. Even a village idiot should realize this.
But before you fall for Nugent’s booming export canard, let’s consult our graph that shows both exports and imports relative to GDP from 2000QI to 2007QIII. It seems that part of the downfall in aggregate demand growth during Bush’s first term in office was a decline in exports relative to GDP. The good news is that the export to GDP ratio has climbed back up with it reaching 12 percent last quarter. Of course, the import to GDP ratio exceeds 17 percent. But hey – you knew we have a huge trade deficit. I guess Nugent and the other economic nitwits at the National Review assume their readers are too stupid to realize what almost everyone on the planet has realized for years.
Update: How did I miss the big flat lie:
For the balance of the 1970s, the Nixon/Ford/Carter presidencies kept inflation and interest rates in the double digits
Inflation may have exceeded 10 percent for a couple of brief periods but it was not double digit for most of the decade – nor were interest rates. I’ve provided a time series graph of one of the usual interest rates folks discuss: the 10-year Federal bond rate. Now if Mr. Nugent can find some other interest rate that had been double-digit for most of the 1970’s, let him provide that. Otherwise – his readers should realize that this village idiot has lied to them again.