Just as I predicted, there is harping on Friday's GDP report. Why? Inventories grew -- and that is bad. In fact -- when we back out inventories we learn that growth only increased 1.63%, indicating growth is still weak. There is but one, academically accepted way to characterize this statement: BULLSHIT.
First, why is inventory restocking bad -- or better yet -- less than admirable economic growth? No one has yet to actually say why it is bad, or somehow less than valuable to the economy. All we learn is inventory stocking contributed to growth and that is somehow bad. But that is pure crap: inventory restocking is a valid way to grow the economy. Think about it this way. Best Buy purchases 1000 LCD TVs for sale, based on past sales, projections etc.... Except, sales slow down in a big way -- a way not contemplated in their projections. That means Best Buy has a ton of LCD TVs it has to sell but can't, meaning BB will not order any more TVs for awhile. But after some time, consumers start to buy TVs again so BB's inventory drops to the point where they need to buy more TVs. More importantly, BB looks out on the horizon and thinks, "it looks like people are going to continue buying TVs. We'd better buy more." That means the TV factory starts to make TVs, leading to more output, which leads to more wages, which leads to increasing demand .... you get the idea.
In case you missed it -- the above scenario is GOOD. The reverse -- when BB can't sell TVs so they stop ordering, so wages drop, so people stop working is BAD. Thanks for playing and here's your sign.
Secondly, let's look at ALL the GDP data, shall we?
GDP+ increased 3.2% -- a good rate.
PCEs -- personal consumption contributed 2.55 of that growth
Gross private domestic investment contributed 1.67 of the 3.2.
Net imports and government expenditures at the state and local level subtracted from growth.
Funny --- there was no mention of the above areas of growth in the "inventories accounted for all the growth" crapola out there.
In other words -- there were plenty of other areas of growth.
So -- what does this mean?
1.) The phrase "think tank" is now an oxymoron, much like jumbo shrimp. Anyone who works at a "think tank" has an agenda, around which he/she attempts to bend the facts. This occurs on both sides of the political isle in equal proportion. People who work at "think tanks" are either whores (they sell their intellectual abilities to the highest bidder), hacks (they are paid to say certain things at all times in order to promote a particular ideology) or politicians (meaning they have an agenda to obtain a political result). Some people fall into all three, meaning they earn the coveted "hat trick of intellectual whoredom." Either way, remember that when a "think tank" spokesman is moving their lips they are lying and if you offered them a higher salary they would tell you the sky is purple, the Astros are contenders and Bob Dylan can carry a tune with perfection.
2.) Once again, the blogoshere has demonstrated it has become "foxified." Facts and data are irrelevant, knowledge of the subject you are writing on is not necessary, getting attention to assuage an insecure ego dominates and spin is everything.