You may not have noticed yet, but a few posts back I took a gentle swipe at an item from Angry Bear attacking a recent speech by Karl Rove (wherein Mr. Rove did what I think is his job, and attempted to defend the economic record of the Bush administration). pgl has thrown the ball back in my court (as I hoped he would, having never failed to learn something from our past exchanges). At issue is my assertion that Mr. Rove is fully justified in pointing out that the downturn in the U.S. economy was well under way before the Mr. Bush took office. pgl:
As I re-read your evidence for a "downturn" that occurred before 2001, I have to cry FOUL. A reduction in the GROWTH RATE of real GDP is not the same thing as a decline in real GDP.
Can't argue with that, but a couple of points are in order. First, the passage of the speech in the original post at Angry Bear does not include an assertion that the economy entered a recession in 2000, only that
The economy itself began slowing in the third quarter of 2000 as GDP declined by an annual rate of 0.5 percent.
That statement is true, although I'll accept that it is just a bit tricky. The outright decline in third quarter GDP growth became apparent only with the 2003 benchmark revision of the National Income and Product Accounts:
I would not generally look at that picture and make a whole lot of it, were it not for the clear downward trajectories of employment and investment growth that I documented in my earlier post. Which brings me to my second, and more important, point. Official recession dates are, as we know, somewhat arbitrary (chosen as they are by a committee employing little more than reasoned judgment). The dynamics that ultimately lead to an official recession are usually in play well before the chosen date arrives.
By my own reasoned judgment, the dynamics that led to the 2001 recession were in full motion by the latter half of 2000. All recessions are, in essence, perfect storms, and in retrospect we can identify the clouds that were converging at the turn of millennium: An investment overhang associated with both the stock market boom and the (much under appreciated) effects of the build-up to Y2K; an acceleration of energy prices that began in 1999 an persisted into 2001; monetary policy that was arguably restrictive throughout 2000 (as evidenced, I now think, by the flattening of the yield curve that I was at the time busy ignoring). pgl asks why I feel compelled to defend Mr. Rove. The answer on this particular issue is that I think he is absolutely right.
On the broader aspects of the Rove speech, I did not see that his remarks represented an egregious distortion of anything that can be definitively resolved by facts, especially after applying the politico discount. I found this comment, near pgl's close, intriguing:
I’ll concede that Rove was more guilty of extreme spinning than lying – given that modern political correctness almost rules out the possibility that anyone is ever guilty of lying no matter how they twist facts in order to deceive.
As I reflected on that, it became clearer to me why was moved to respond to pgl's post in the first place. I don't believe that the problem is political correctness inhibiting people from calling a liar a liar, speaking the truth to power, or anything of the sort. Rather I believe that passions have begun to make it politically correct to demonize those with whom we disagree.
One of the things I have found most satisfying about being part of the blogging community is the respect and graciousness with which I have been treated by those who nonetheless think I am full of it. I guess I'm just trying to spread some of that goodwill around.
UPDATE: The Nattering Naybob joins the fray.