Quicker growth? first estimate of fourth quarter GDP growth released

Catherine Rampell reports based on a BEA release that in the 4th quarter real Gross Domestic Product (sometimes referred to as 'the economy') grew at an annual rate* of 5.7%. Since this is a first estimate, Rampell rightly points out that the first estimate for 3rd quarter annual growth rate was 3.7%, which has since been revised downward to 2.2%. Less encouraging still is the fact that more than half of the reported growth is increase in inventories, meaning businesses didn't sell as much stuff as they were planning to, or are building up inventories in expectations of a return to higher consumer spending. But the latter added only 1.44% to the overall growth rate, half a percent off from its 3rd quarter showing. Given the continuing job losses last quarter, inventory increases coupled with a consumer spending slow down looks to me like a bad situation for employment in the near future.

* Annual growth rate here means that if the economy grew as fast as it did in the 4th quarter all year, the economy would grow by 5.7%.

Facts versus Other Facts About the Chicago School's Influence

John Taylor, in a post entitled Opinions versus Facts About the Chicago School, tries to make the case that blaming Chicago School economics for the financial crisis just isn't fair, because Chicago PhDs haven't been in the president's Council of Economic Advisers. He even has a graph that proves it's a TRUE FACT. Maybe. Maybe.
However, the CEA isn't the only important player in the world of financial regulation. Take these guys, for example:

What are these guys doing? Read more about it in this WaPo story. Which school of thought do YOU think those guys wielding chainsaws and pruning shears menacingly over that defenseless pile of financial regulations are from? I lean towards Friedman more than Samuelson on that question.

Economic Theory Throwdown

Check out the Keynes vs. Hayek rap video. Hilarious, at least for an economist like me.

Something I like about Paul Krugman

While Krugman agonizes over the Bernanke Conundrum, he says Bernanke has been assimilated by the banking Borg. Gotta love a geek, I say in an entirely self-serving way. I don't agonize over the decision of whether or not to keep Bernanke. I don't trust him to take the right side between bankers and workers (in other words, I think he's been assimilated by the banking Borg). Krugman himself would be better, as Simon Johnson argues. I think he's probably the best of the could-happen category. My favorite in the wish-it-could-happen category is Jim Crotty.

Still Shedding Jobs

Today's employment report from the BLS shows that we are still shedding jobs (only 85,000 this month, though; woo-hoo!). The unemployment rate remains 10%. Graphs like this one (from Calculated Risk) help make clear why some folks call the the Great Recession. You can see that the employment-population ratio hasn't been this low since 1983. This is most likely not because people are opting for more leisure.

Update:Here's a link to the BLS employment report.

For 6 million Americans, Food Stamps are Their Only Income

In The Safety Net - Living on Nothing but Food Stamps, we learn that: "About six million Americans receiving food stamps report they have no other income, according to an analysis of state data collected by The New York Times." Oy.

H/t Brad DeLong