Breaking News

My little tablet recently beat the networks on some important breaking news. Then I told my wife, which means that I beat MSNBC on important breaking news. No applause, please. Just a little incident that proves a big point.

Let me flesh it out. There I was, comfortably in bed, while my wife was in the shower. I had fed the pets, and was playing a game on my tablet - Sim City, if you care to know - when a bulletin flashed on the screen. The nation’s economy had grown by 4.1 percent in the second quarter of the year.

“Honey,” I said as my wife was drying her hair with a towel. “The economy went up by 4.1 percent in the last quarter.”

“What does that mean?” she asked.

“Hard to tell,” I said. “But it’s good for Trump.”

Now. I don’t only watch MSNBC. I also look at Fox and CNN and a couple of other news sites, including some business sites and international news. And CBS and NBC and ABC too, although none of them win when the Yankees are playing the Red Socks.

That said, for the first hour or so, there was little news being reported beyond the  4.1 percent number. Then President Trump held a press conference, and his economic advisor lied and say the growth was certainly sustainable and could even hit 5 percent, because that is what the president predicted.

Then back to game shows, reruns of old comedies and mysteries, and back to the real world to take out the garbage. See, I do what most people do.

But, I also take some time to look at things, and try and figure out what they really mean. For instance, the reaction across many of the networks quickly became purely political. Does it help or hurt the President? What to his supporters and his critics think? Was he really responsible for all that growth?

Most of the coverage also ignored the important basic questions. Just what went up 4.1 percent? How does it effect real people? What does it mean?

                                       It's Hard, But I Will Explain. Or Not.

So, let me tell you. Not that I know, of course, but as a former reporter - actually, you never stop being a reporter even when you retire - I can make a pretty good guess. And, give some solid observations. And, let me tell you, it’s really complicated.

For example, I am willing to bet that while our nation’s economy went up 4.1 percent in the second quarter of the year, the salaries of workers did not go up 4.1 percent. And the money people get from Social Security did not go up 4.1 percent. The cost of groceries that people buy every week did not go up 4.1 percent (although some things did) and the price we pay for gas at the pump did not go up 4.1 percent, although it was probably closer to that increase than any of the other things I have mentioned.

Now, all of this goes to a bigger point. The nation’s economy is not the nation’s people. The two are linked of course - the Great Depression really ruined the lives of millions of our citizens and led, at least indirectly, to World War II. But the economic figures used to calculate that 4.1 percent number have very little to do with our day-to-day lives.

A commonly-accepted definition is that the increase in the economy shows the increased value of all goods and services made in the second quarter - April, May and June - of this year.

Most salaries didn’t go up at all. But lots of stocks did. If you own a lot of stock, you made a lot of money. If you spent some of that money on a new car or boat or airplane, you are raising the economic growth. If your company used a $200 million tax break to buy back some of its stock - which raises the value of all the remaining stock - and you own 50,000 shares, the economy really did go up. For you.

Now, thanks to some good reporting by other people, we learned that consumer spending really did jump in those months, by about four percent. Some experts say that accounted for about 70 per-cent of the growth. That means the economy went up, and also means your credit card debt went up. See, economic growth can be a two-way street.

                                           Direct From The Horse's Mouth

If you look it up, the Department of Commerce’s bureau of economic analysis noted that   things may already getting bumpy. It said the real PCE reflected a $1.4 billion decrease in spending for services, which was offset by increased spending for goods, with recreational goods and vehicles being a leading contributor.

(Sorry about that. Welcome to economics, the dismal science. the PCE index is the personal consumption expenditures index used as part of the Department’s calculation. It covers the money people spend, but excludes food and energy prices. There are exceptions. If you are interested, you can download it all from the department’s website. If you want to print it, start printing, go out to the store and buy some caviar and truffles for lunch, and come back and eat, then watch it finish printing. That would help the economy. Or, you could just go out and buy another RV or yacht. That would help even more.)

What really  helped was that our nation’s exports went up by 13.3 per-cent, which is really good. Unless it went up because people in other countries made a lot of purchases before our announced new tariffs made them more expensive. That means the things they bought are in warehouses, and orders will start to fall off in the third quarter. Which is not good. See, it’s complicated.

                               But, It's Historic. And, History Tends to Repeat.

Our president said this dramatic increase was historic. Now, forget for a moment that the economy has been going up steadily for more than a decade. Let’s just look at quarterly economic growth - what this 4.1 figure shows -and see if it has hit that number before. You know, historic.

Well the most recent big historic jump was 5.1 percent - bigger than 4.1 for people who can’t do math - and that happened long ago. The second quarter of 2014, to be precise. In fact, while President Trump rarely gives credit to President Obama, the economy grew by 4.1 percent or more four - using quarterly measurements - times under President Obama, in 2009, 2011 and twice in 2014.

So, let’s just wait and see if it hits a 5 percent growth rate this Summer - July, August and September. Hey, lots of people spend money in the Summer. I can think of some pricey golf courses owned by...well, let’s just say our President’s personal economy might grow by 5.2 percent.

For the rest of us, we can just wait for the fourth quarter to do something about our personal economy. Sometime in early November.