Trump trying to lower the bar

Business Insider has a story this morning citing the Autocrat’s case for fiscal “stimulus.”

“Well, sometimes you have to prime the pump,” he told Time. “So sometimes in order to get jobs going and the country going, because, look, we’re at 1% growth.”

One (not me) might think that the journamalist writing this story would do the bare minimum and check to see if Trump’s claim has any validity. But one would be wrong. So I will do it.

The consensus estimate for Q4 GDP growth is 2.5%. If that is confirmed, then the 4-quarter growth rate to Q4 will have been* 1.9% and the 20-quarter growth rate will have been 2%. So measured by GDP, which I concede is dubious, Trump is understating growth by a factor of 2.

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I am not a huge fan of using the GDP as a measure of social welfare – or anything else really.  But it is standard to refer to GDP when speaking of growth, so we can presume that the Autocrat meant that as the reference. Of course, one could just ask.

As for pump priming, the time for that is not when the Fed is raising interest rates and the economy is at full employment.

* Whatever the Q4 GDP growth rate turns out to have been, it has already been determined. The Q4 growth rate is based on the average level of activity (as measured by GDP) in October through December vs the average level of activity in July through September.  That period is centered on Septermber 30 or October 1, if you want to boil it down to a single day. Right now, the economy is working mostly on the Q1 GDP growth rate. This is the sort of remedial stuff that is a wondrous mystery to journamalists.