XPost: ucb.math, alt.society.civil-liberty, ca.environment
XPost: alt.mountain-bike
http://www.foxnews.com/opinion/2014/07/07/mr-obama-cant-blame- our-economic-troubles-on-weather/
The economy took a bad hit during the first quarter this year.
It shrunk at an annual rate of 2.96 percent. Since the
beginning of 1947, there are only 16 of the 268 quarters
experienced worse growth.
The Obama administration blames the slow growth on the
“historically severe winter weather, which temporarily lowered
growth.” Jason Furman, the chair of Obama’s Council of Economic
Advisors, made this assertion again on July 3rd and President
Obama has made this claim several times.
But that doesn’t square with the historic data. The five worst
winter storms or winters with the coldest temperatures do not
match economic downturns.
There is absolutely no relationship between how cold it was and
GDP growth.
In a list of the worst United States winter storms since 1888,
Epic Disasters, using National Weather Service data, lists five
of the ten worst occurring since 1947. Four of the five saw
economic growth. Only during the fifth worst storm did the
economy shrink. The average annualized GDP growth during the
quarters when those storms struck was 1.8 percent.
The Obama administration suggests measuring the severity of
weather in terms of the U.S. temperature for the first quarter
of the year. But, again the data doesn’t support their claim.
There is absolutely no relationship between how cold it was and
GDP growth. In fact, if there is anything, unusually warmer
winters are associated with slightly less economic growth.
The Obama administration graphs out the “Deviation from Normal
Temperatures, 1954-2014,” correctly show that this past winter
was unusually cold. But what is missing is any evidence that
GDP growth indeed gets slower when it is cold.
Economic growth has been abysmal during the Obama recovery,
growing just 1.8 percent. The average growth since 1965 has
been over 3.1 percent. Normally, during a recovery, economic
growth is so fast for a while that lost economic growth during a
recession is made up for quickly. But the opposite is true
during the Obama recovery, where we are falling further and
further behind the average growth rate.
As proof that the economy is growing strongly, the
administration points to five months in a row above 200,000 job
growth. But what they fail to mention is that since the
beginning of the year, full-time jobs have actually declined.
The added number of jobs has entirely been in part-time jobs and
over 80 percent of them have been in the relatively low paying
service sector.
Over the weekend, Furman responded to critics:
“Skeptics point to the higher unemployment indicated by a
broader gauge of unemployment and underemployment that includes
people involuntarily working part time and those who have not
looked for a job recently but who still want to work. But this
criticism ignores that this measure is always higher than the
official unemployment rate . . . .”
While he is indeed right that this broader measure of
unemployment has slowly declined, Furman overlooks one thing:
five years into the Obama recovery and this measure of
unemployment is still higher than during any previous
administration since January 1994, when the number first started
being calculated.
But the ultimate test for whether the Obama administration is
right will come on July 30th, when the initial estimates for the
second quarter’s GDP will be released. If the drop were just a
temporary blip due to cold weather, we would need GDP growing at
an annual rate of 3.1 percent just to dig ourselves out from the
first quarter drop. But even that would mean effectively no
growth for the first half of the year.
However, I suspect that the media won’t have this type of
perspective and will be euphoric with any growth rate of 3
percent or more.
For years, President Obama has blamed George Bush. But five
years into the “recovery,” Obama has been forced to find another
scapegoat: the weather.
John R. Lott, Jr. is a columnist for FoxNews.com. He is an
economist and was formerly chief economist at the United States
Sentencing Commission. Lott is also a leading expert on guns and
op-eds on that issue are done in conjunction with the Crime
Prevention Research Center. He is the author of eight books
including "More Guns, Less Crime." His latest book is "Dumbing
Down the Courts: How Politics Keeps the Smartest Judges Off the
Bench" Bascom Hill Publishing Group (September 17, 2013). Follow
him on Twitter@johnrlottjr.
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