It was bad, but nowhere near as bad as expected.
Is it possible that all the hysterical gloom and doom emanating from the media is way overdone, and that things are not close to as apocalyptic as we've been told the past five months?
Consider the actual numbers reported Friday morning by MarketWatch:
The U.S. economy contracted at a 3.8% seasonally adjusted annual rate in the fourth quarter, the Commerce Department estimated Friday. This is the largest contraction since the first quarter of 1982. Economists surveyed by MarketWatch were expecting a negative 5.5% growth rate in the fourth quarter.
For the year, GDP rose 1.3 percent which was its worst performance since 2001. Is this the end of the world we've been hearing about since September?
After all, this 3.8 percent decline is only the 13th worst since the Commerce Department began doing quarterly reports in 1947. This means that there's been twelve worse quarters since 1946, and none of them signalled the end of the world nor required the kind of government spending now being discussed in Washington.
For instance, GDP declined by an astounding 6.4 percent in the first quarter of 1982. This followed a 4.9 percent drop in the fourth quarter of 1981. History now shows this to be the worst of that decade's recession, as the economy exploded in 1983 beginning one of its most powerful and long-lasting expansions ever.
A similar situation occurred in 1974 when the third quarter GDP declined by 3.8 percent followed by a 1.6 percent drop in the fourth quarter and a 4.7 percent drop in the first quarter of 1975. Yet, once again, the world didn't come to an end for the following quarters showed growths of 3.0, 6.9, 5.4, and an amazing 9.3 percent.
As such, there have been two recessions in the previous three decades when we experienced far worse economic growth than this most recent quarter without it indicating a depression and without the need for historic increases in deficit spending to get the economy going again.
Is it therefore possible all this doom and gloom is way overstated?
To be sure, the fourth quarter of 2008 might not be the worst of this recession. Nobody knows. However, isn't it just as possible that this will be the low point?
Isn't it also possible that Obama-loving media are hyping the hysteria because they want his stimulus package to be passed?
After all, it was indeed the economic gloom and doom that began in September which basically handed this election to Obama as McCain-Palin had briefly taken a lead in the polls after the Republican National Convention and just before Lehman Brothers declared bankruptcy on September 15.
The press accomplished a similar feat in 1992 when they aided and abetted presidential candidate Bill Clinton's false depictions of a poor economy despite the recession having ended in the second quarter of 1991.
Now, with their man back in the White House, given the economic number just released, isn't it possible they're playing the same game of overhyping the gloom in order to further their agenda?
As always, we will know in the fullness of time.
