After the disaster of the economic numbers yesterday, president Obama told a crowd in the Midwest that economic growth was hurt because of events in Europe. Many folks know that there has been an ongoing crisis in the European Union focused on the difficulties of Greece, Ireland, Italy, Spain, Portugal and maybe other countries to pay their debts. During May, there were elections in Greece which were inconclusive. No party was able to form a government, so there will be new elections in June. Support for the parties that favor the austerity required by the EU and continued funding from Germany and others fell in the first election. The end result may be that Greece leaves the Euro zone. Meanwhile, in the last week, interest rates on Spanish debt has started to climb into the danger zone. So the question arises: did this crisis in Europe slow American economic growth in the first quarter and reduce job creation during the last three months of paltry numbers (as Obama now claims)?
The answer is a resounding NO! It seems that Obama has trouble with his time lines. The big problem in Europe over the last year has been Greece. During that time, the EU approved a major bailout package for the Greek economy. Indeed, in February, a package totalling $170 billion was put in place and that was followed by agreements to reduce Greek debt overall. A rational business leader who followed events in Europe in February through May would have come to the conclusion that Europe was taking strong measures that ought to resolve the Greek crisis. Sure, there were day to day ups and downs in the news, but the movement was towards a solution at least until the Greek election brough inconclusive results. It is hard to imagine that the news from Europe was detering American companies from hiring new workers. When the big news about the Greek election came, it certainly had no effect on the economic growth of the first quarter; that had ended a month and a half earlier. When the big news about the Greek election came, it also had no effect on the May employment numbers. These had been determined by the government based upon a survey that had already been completed by the time of the Greek election. Put another way, all of the economic results were determined BEFORE the Greek election. The recent upset in Europe had no effect in America at all. Absent time travel, it just could not have such effect.
So, Obama's speech yesterday blaming the bad numbers on Europe was (surprise, surprise) a lie. That may sound harsh, but to call it a mistake is not sufficient. The average person in America may not be clear about the sequence of events, but you can be sure that the White House knows exactly what happened.
Next we ought to see what the response of the media has been. This morning I heard a report from CBS news in which the economics reporter actually said that the key driver in both the paltry first quarter economic growth and the disasterous jobs report was the crisis in Europe. What will come next? If there is a bad holiday season for retailers will this same reporter tell us that the reason was problems with Santa's sleigh? Shouldn't the media attempt to report the actual facts rather than the White House talking points, especially when those talking points are lies?
I guess I should not be annoyed by what I heard on CBS. After all, another reporter announced that the jobs reports were "bad numbers at a bad time". Huh? They were clearly bad numbers, but wasn't it a "bad time for Obama"? Only someone totally in the tank for Obama would just call it a bad time. Of course, we all know that the media is in the tank for Obama, but I still find it annoying to see.
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