“U.S. economy likely shrank in quarter one, but fundamentals strong”

The quote is from Reuters which maintains the delusion that all is well with the American economy. As with the data on unemployment, there are people across the American Government, throughout the public service and at every level of the left media whose job it is to pretend all is well so long as Democrats are in charge. If the White House changes hands in 2017, we will hear a different story. But until then, the good times will continue to be around the corner, as they have been for the past six years.

But some things you cannot hide, which is that U.S. economy contracts in first quarter. The national accounts are, unfortunately, a truly inadequate measure of what you would like to know. If one economy grew by 10% and another by 2%, which one has a higher standard of living? The fact that you cannot tell is one of the signs that the number really doesn’t get to what is actually of interest. And here is a question that is less easy to answer than you think it ought to be. If an economy grew by 10%, just what exactly is 10% bigger this year than it was last year? Again a difficult question that few are ever taught. But it is not what you really want to know if you are interested in prosperity and jobs.

Almost all of our economic measures are incompetent if the aim is to understand present economic conditions and current trends. But there is no disguising this one. A contraction in economic activity is not part of the story of an economy in recovery.

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