4th Qtr 2009 GDP, 1st Revision

From Calculated Risk and the government:

The headline GDP number was revised up to 5.9% annualized growth in Q4 (from 5.7%), however most of the improvement in the revision came from changes in private inventories. Excluding inventory changes, GDP would have been revised down to around 1.9% from 2.2%.

Not really any encouragement here.  Yes, the overall is revised up 0.2 points, but what really counts for a sustained recovery was actually revised down 0.3 points.   The risk of a stumble and falling into a double-dip recession is looking stronger.

Best Idea I’ve Read Today

from Angry Bear:

globalization–the idea that corporate entities should be able to operate their business world-wide without any “barriers” from the nations themselves–is at the heart of our systemic economic problems. The rage at the base of the tea party movement is real–it has been misdirected at government, as though government were the source of the problems, when it should have been directed against the Big Business mentality that casts morality aside and considers profit the only god–community, workers, and product quality/service be damned. The tea partiers’ rage itself is real, because people are so fed up with having no real choices, at being at the mercy of multinational corporations that set their own terms and, often, have near monopolies. This is especially true with health insurance, where the lightly regulated industry is made up of a few giants who often dominant their markets, leaving a typical person little ability to “shop” for a better deal. Even where you shop, once you create a business relationship you are in many ways at the mercy of the corporate giant. They change prices when they please, they charge ridiculous add-on fees for services that cost them only a small fraction of the fees they charge, they hide information and manipulate their clients–from cable providers to banks to mortgage lenders. They are no longer local, and they no longer care about your community or you as a client. It seems to me that if we want businesses that are more responsive to the typical person, we need businesses that are smaller, not businesses that are bigger. We need more Mom and Pop stores and less Wal-Martization of the country.

Explanation: “Core Inflation”

Krugman explains “core inflation” and the measurement thereof:

So: core inflation is usually measured by taking food and energy out of the price index; but there are alternative measures, like trimmed-mean and median inflation, which are getting increasing attention.

First, let me clear up a couple of misconceptions. Core inflation is not used for things like calculating cost-of-living adjustments for Social Security; those use the regular CPI.

And people who say things like “That’s a stupid concept — people have to spend money on food and gas, so they should be in your inflation measures” are missing the point. Core inflation isn’t supposed to measure the cost of living, it’s supposed to measure something else: inflation inertia.

For the full explanation, go to the link.