The inevitable GDP conspiracy theories

Updated
 
The inevitable GDP conspiracy theories
The inevitable GDP conspiracy theories

The economy grew a little faster than expected in the third quarter (July through September), with the GDP report showing 2% growth. I suggested earlier that the right would likely start pushing conspiracy theories, and I wasn’t kidding.

Fox News’ Stuart Varney suggested that third quarter economic growth as measured by the Commerce Department was a conspiracy to help reelect President Obama, pointing to the fact that economic growth was driven in part by increased government spending. […]

Varney, discussing the figure on Fox News, raised doubts about the numbers, saying: “Dig deeper. Look inside that report, and you see a big 9.6 percent jump in government spending. There is some suspicion that these numbers have been juiced by government spending deliberately in that quarter, in the report, right before the election.”

In fairness to Varney, it looks like I predicted the wrong conspiracy theory. I thought Fox News and others would accuse Commerce Department officials of manipulating data and deliberately releasing fraudulent figures, just as the right did with the Bureau of Labor Statistics.

It turns out, Varney is pushing a different conspiracy theory – that government spending went up, which in turn “juiced” economic growth.

Let’s unpack this a bit, because I think it’s important to appreciate the scope of the argument. First, Stuart Varney argued, without a hint of shame, that he now believes government spending is necessarily a good thing – the public sector spending taxpayer dollars, he suggested, boosts economic growth and leads to a healthier economy.

That’s true, of course, but it’s also the exact opposite of what Varney, Fox News, and other Republicans have said for the last four years. Indeed, the right has committed itself to the exact opposite economic vision, arguing that government spending hurts economic growth. If government spending can “juice” the economy and improve conditions so directly, why have Varney, Fox News, and other Republicans fought against it throughout the Obama era? Since when does Varney not believe his own talking points?

As for the conspiracy theory itself, no one is trying to artificially create growth. Public-sector spending was up for the first time in years, but much of it was the result of defense spending, which Republicans supported. None of this is unprecedented.

To be sure, if someone wants to make the case that the GDP report should be taken with a grain of salt because it’s only a preliminary estimate, fine. These figures will be revised, and the later, more accurate figures may look better or worse. We’ll have to wait and see.

But to argue that there’s “suspicion” about the legitimacy of the figures is deeply ridiculous.

GDP and Fox News

The inevitable GDP conspiracy theories

Updated