Dude, Where's My Recession?

Jimmy P. at the DNC—The broad strokes of the economic picture the Democrats have been painting here in Denver are as follows: (1) We're on the verge of the Great Depression 2.0; (2) Markets and the private sector (Wall Street) have failed working people; (3) Barack Obama is the new FDR who will save the economy with a "green" New New Deal. (At least that is the wiseguy version.)

So how terribly inconvenient is it that the Commerce Department reported today that the economy grew at a revised 3.3 percent in the second quarter. Was it all about the government rebates? Nope. Here is Mike Englund over at Action Economics: "It turns out that a hefty 4.8 percent real growth rate was seen for real final sales in Q2, with the bulk of the strength in the net export component that defies the explanations that the gain was 'all due to rebates.' The rebates likely did boost nominal consumption growth with a gain split between price gains and real growth. Yet, Q2 was clearly poised for a solid performance anyway, led by trade, nonresidential construction, and a bounce in government spending there were all likely insensitive to the rebate program." Yes, yes, I know, global growth is slowing. But a lower "oil tax" on consumers will help growth. And we'll see if John McCain in St. Paul amps up his growth agenda with any new proposals. His skimpy middle-class tax cut has been getting hammered here. Hard.

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