In the opening paragraph in a story on the persistent economic slowdown, the AP finds several groups to blame: “Shoppers won’t shop. Companies won’t hire. The government won’t spend on economic stimulus—it’s cutting instead. And the Federal Reserve is reluctant to do anything more.” Yes, the AP feels that after hundreds of billions of dollars of “stimulus” and two rounds of unsuccessful quantitative easing, the national economy just needs more government intervention. Likewise, the AP is miffed that households, after years of historically minimal saving, are spending more responsibly.
When the AP considers why “economists are lowering their forecasts for the full year and recalculating the odds that the economy will slide back into recession,” the AP acknowledges “a short-term rise in gasoline prices and an earthquake in Japan” and claims that “a political fight over debt and deficits raised the risk that the U.S. government would not be able to pay all its bills.” The AP lets pass without mention that the day after the signing of the “Debt Control Act of 2011” the national debt exceeded national income as measured by GDP.
The AP also cites several stocks that have taken a value hit because of the economic slowdown. Several of these, however, have problems that go beyond those the AP is willing to mention. Among those AP cites are Boeing, Caterpillar, ExxonMobil, Shell and Amazon.
Boeing has been harassed by regulators at the National Labor Relations Board, which has insisted that it build its new 787 airliner in Washington State with trade union labor rather than in right-to-work South Carolina as the company planned. Caterpillar’s CEO sent a letter to Gov. Pat Quinn (D-IL) protesting an increase in that state’s corporate income tax. Caterpillar employs 23,000 workers in Illinois. Both ExxonMobil and Shell (as well as all other oil producers) face constant attacks from the President himself. Amazon has been hit with a California law that would force online retailers to collect sales tax, driving up costs to consumers in the largest state economy.
Of course, the AP finds it easier to blame government spending cuts than increasing regulation costs. The AP asserts that “government cutbacks reduced economic growth by 0.2 percentage points” but does not question the costs of the 4,200 new and pending regulations. In the month of July alone, federal regulators proposed or promulgated over 600 new rules.