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Timothy Geithner – Prosperity Is Just Around the Corner

Posted on August 4 2010 5:00 pm

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I don’t know when they are planning the next revival of “Annie” but I think Timothy Geithner would be fabulous in the lead role.  Not only does he have that perpetual look of earnest, optimistic, cluelessness so essential to the part, but by the time the financing is in place, he will probably be available.

Consider his latest “The Sun Will Come Out Tomorrow” offering in the New York Times, modestly entitled “Welcome to the Recovery.”

THE devastation wrought by the great recession is still all too real for millions of Americans who lost their jobs, businesses and homes. The scars of the crisis are fresh, and every new economic report brings another wave of anxiety. That uncertainty is understandable, but a review of recent data on the American economy shows that we are on a path back to growth.

If this seems eerily reminiscent of other, long-dead politicians studying sheep’s entrails and declaring “prosperity is just around the corner …” you aren’t imagining it.

Sing with me now …

Geithner’s primary basis for optimism is the July 30 GDP numbers from the Bureau of Economic Analysis (BEA), a largish document with teeny-tiny font that he clearly hopes won’t be scrutinized too closely, so he can apply his sunny interpretations without a constant chorus of guffaws.

Geithner writes:

Together, private consumption and fixed investment contributed about 3.25 percent to growth. Even the surge in imports, which lowered the rate of increase of G.D.P., actually reflects healthy and growing American demand.

Which puts  the actual Q2 GDP growth figure at 2.4%, down from 3.7% in Q1. Why don’t I feel better? Perhaps it’s the characterization of a ballooning trade deficit as “healthy,”  which on the spin meter ranks right up there with “apart from that Mrs. Lincoln, how did you enjoy the play?”

But since he brings it up, and our fingers are already doing the walking through this tome anyway, how about the bit below:

Real federal government consumption expenditures and gross investment increased 9.2 percent in the second quarter, compared with an increase of 1.8 percent in the first.  National defense increased 7.4 percent, compared with an increase of 0.4 percent.  Nondefense increased 13.0 percent, compared with an increase of 5.0 percent.  [Emphasis mine].

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