Rich Lowry at the Corner says he got this email from a very smart friend:
The ISM Manufacturing Index for January was at a five year high (58.4 versus consensus at 55.5). The 4th quarter GDP was up well above consensus. It was 5.7% growth. The next quarter GDP growth will be even higher, as might all four quarters of 2010, each probably high single digit growth, between 5 and 9% quarter to quarter, seasonally adjusted. This is well above consensus.
So. The economy is going to look like it is getting better. It is – in the short run:
The distinction between the long and the short run of economic policy is crucial. More than $30 trillion was poured into the global economy in 2008 – 2009 by world central banks and governments. That central bank credit expansion has been a much more important stimulus to growth than Obama’s so-called “stimulus program.” This short-run, central-bank financed growth will surely last through the election of 2010.
Republican candidates and conservative media commentators must prepare the American people for this phony boom with terrible long-term consequences. The news story here is: the revival of the economy by central bank money-printing and enormous government deficits to be paid for by our children.