The Wall Street Journal, upon the release of the most recent annual GDP growth figure of 2% (up from 1.3% in the previous quarter), observes:
The economy plowed ahead at a 2% growth rate in the third quarter, which thrilled more than a few of our liberal friends who think it’s enough to re-elect President Obama. We’ll soon find out if they’re right, but there’s no doubt their prosperity standards are slipping. In the third quarter of 1992, growth came in at 4.2% (3.4% for the year) and Democrats called it a catastrophe.
Even the liberal New York Times took a sober view of the anemic uptick:
Still, the pace of economic activity is short of what’s needed to substantially reduce the unemployment rate, now at 7.8 percent and also well below the level of growth typical in this stage of a recovery after a sharp downturn.
What’s more, fears are growing that the economy could slow again in the fourth quarter. Companies are preparing for the possibility of steep tax increases and sharp spending cuts if Congress cannot agree on a deal to reduce the deficit after the election, a combination of factors frequently referred to as the fiscal cliff.
In fact, a series of disappointing earnings reports from the nation’s biggest companies this week, along with a handful of layoff announcements from corporate bellwethers, suggest businesses have already begun to retrench.
Next week America will decide whether to gamble on the economic prosperity prescription being offered by Republican presidential candidate Mitt Romney, or on the social equity model presented by the incumbent president Barack Obama. The contest presents as something portended in one of the wisest observations ever made by the in-certain-ways-defunct John Maynard Keynes. Previously cited in this column, it bears repeating:
Keynes, in the General Theory of Unemployment, Interest, and Money (chapter 24, part V) famously wrote: