This morning, data released by the Bureau of Economic Analysis showed third-quarter growth of gross domestic product (GDP) at 2 percent. This beat expectations slightly as, according to Bloomberg, “the median forecast of 86 economists surveyed by Bloomberg called for a 1.8 percent gain.”
No one was claiming this growth rate was spectacular. “Nobody expected gangbusters,” conceded liberal economist Jared Bernstein, a former aide to Vice President Joe Biden, on CNBC this morning.
The Associated Press piece noted that this “growth remains too weak to rapidly boost hiring, and the 1.74 percent rate for 2012 trails last year’s 1.8 percent growth.” The Weekly Standard, as well as Mitt Romney in a speech in Iowa today, noted that through 2011 the Obama administration predicted that GDP growth would be around 4 percent at this time.
Still this growth was better-than expected. President Obama and his supporters can find other modest “green shoots” to point to such as housing starts and, until the disappointing earning reports of this week, stock market gains. And next week’s jobs report for October may also be better than expected.
No doubt the administration will seize on any slight economic improvement to claim its policies are working, and that the economy would be even better off if “gridlock” hadn’t stopped his big spending plans. “We’ve come to far to turn back now,” the president said in a weekly address and elsewhere.
Yet as I write this week in Forbes, to the extent we are experiencing slight growth, it is probably due to the Obama administration’s ever-so-slight retreat from its most burdensome regulations. As I say in the piece,
the President’s actions belie his rhetoric as over the past year, the Obama administration has itself turned back, ever so slightly, from new rules and mandates through waivers, delays, and exemptions. This mini-reversal may have given employers just enough breathing room to create this modest, but better-than-expected, increase in jobs. It’s a slight start, but much more regulatory relief is needed, and even these small measures may be temporary.
I point to delays — until 2013 — of costly regulations from the Environmental Protection Agency, and the withdrawal of the”fiduciary rule” from the Department of Labor “that would have limited choices and raised costs for holders of individual retirement accounts and 401(k)s.” (I testified against this rule at a DOL hearing a few months before it was withdrawn.)
I note that over 100 rules from the Dodd-Frank financial “reform” have also been delayed, though I added that the law “has still done tremendous damage and caused many small banks to quit making mortgages for fear these will be deemed ‘unqualified’ or ‘abusive.’” That’s why CEI, the 60 Plus Association, and the small State National Bank of Big Spring (Texas) have filed suit against the 2,600-page monstrosity.
Yet at the end of the day, I conclude in the article, the mixed signals of the administration is preventing growth from rising much further. Obama isn’t even taking credit for these regulatory delays. Instead, he is doubling down and “launching a full-throated defense of Dodd-Frank, Obamacare, and the regulations his administration has pushed through.” I point out that “these conflicting signals, combined with the ad hoc nature of regulatory relief to date, mean that entrepreneurs still face a great deal of uncertainty as to what will happen next year.”