I said it just over a month ago upon the release of September's CPI (Consumer Price Index) numbers. "I predict here and now that the inflationary hype that will soon ensue across the nation via the "MSM" will be nothing more than that, hype." Well, one month removed from the devastating effects of hurricanes Katrina and Rita on the Gulf Coast, energy prices are falling and the price index is back to a manageable rate of increase.
The Bureau of Labor Statistics published their monthly CPI release this morning, showing the entire price index increasing 0.2% in October. This compares to a 1.2% increase in September and a 0.3% average increase over the five months prior to the hurricanes. The most telling statistic, however, is a 0.2% decrease in energy prices last month. In September, energy prices shot up 12% and the three month average increase from July-September was 7%. The big reason for the dropoff is the quick downturn in the trend of gas prices. According to AAA, the current national average price for regular unleaded gasoline is $2.276/gallon. One month ago, that average price was a whopping $2.752/gallon.
I understand that this great news is only for one month. Circumstances could pull a 180 very quickly and put us right back in the situation of a month ago. However, it's fun to be able to say to the MSM, "I WAS RIGHT AND YOU WERE WRONG!"
Given ceteris paribus, the Latin phrase for "all things constant", the economy will continue down this path of minimal inflation and stellar growth. According to the BEA (Bureau of Economic Analysis), the real (adjusted for inflation) gross domestic product grew 3.8% in the third quarter, following a 3.3% growth rate for the second quarter. Since President Bush was sworn in at the beginning of 2001, the GDP has grown at an average rate of 2.66% per quarter. However, that number grows to 3.31% without the poor numbers of 2001 which should count towards Clinton because of economic lag. Just to make things more interesting, since 2003 the average growth rate is all the way up to 3.84%.
President Clinton's average quarterly growth rate from 1992-2000 was 3.22%. It's hard to prove that Bush has screwed up the economy so horribly with numbers so close to Clinton's.
Back to my previous point, when spikes such as the bloated numbers from September are included in the overall economic outlook, President Bush doesn't look like the spectacular failure the left and the MSM are trying to say he has been. In fact, it seems that his economic philosophy has had the same effect on the economy as Clinton's.
So the surplus has turned into a deficit, big deal! There was an enormous deficit in the 1980's due to Reagan's fight against Soviet Russia and Communist satellites but he still managed to keep the economy growing at a marvelous rate. Reagan took an 11.6% inflation rate in 1981 and turned it into a meager 3.2% by his final quarter in office. He turned a 1.325% growth rate in 1981 and turned it into a superb 3.675% in 1988. Reagan inherited a horrible recession from Jimmy "the Goober" Carter and turned it into one of the most prosperous decades in American history. President Bush is on pace to leave in 2008 with similar numbers to Dutch, but don't expect the media to congratulate him on a job well done.
The simple truth is, the economy is growing and energy prices are falling. What more could we ask for? Unemployment is at its optimal level and GDP is growing at the optimal rate. We have given freedom to nearly 50 million people in Iraq and Afghanistan and will soon be able to hand over the reins to the newly established democratic government of Iraq as we have already done in Afghanistan. Nevertheless if you turn on a television or read the New York Times, you'd think it was 1932 and a quarter of the population was unemployed and standing in line waiting for free soup and coffee.
Sorry MSM, your time is up. The death knell has been sounded and Charon is waiting to take you to the underworld.