AN INCONVENIENT RECOVERY
Despite assurances among some on the left wing, the 7.2% GDP growth in the third-quarter was not revised down, but up. It now appears that the growth is 8.2%. This is good news and other economic indicators indicate that the economy is poised to make some good, continued growth leading into the primary season.

This is inconvenient for the Democrats, who (consistent with modern politics) spin until the spin becomes a lie. Clinton did it in 1992 when he called the economy the worst in 50 years, a provably false assertion. Now the Democrats have a decision to make. Will they "spin" the rapid third quarter growth as being meaningless and continue to argue that the economy is in bad shape, supported by arguments uninformed by the rules of economics? Or will they seize the opportunity to say, "Great job, Mr. President, maybe we were wrong about the tax cuts, but now's the time to do this, that and the other thing"? That would be honest.

Back in October, Paul Krugman, New York Times columnist, economist and former Enron advisor, argued that the third quarter numbers were good, but that the failure of jobs to grow would undercut consumer spending, thereby leading to further economic trouble. Democrats inserted the words "jobless recovery" into their talking points, despite an increase in employment in August, September and October.

But Krugman forgets that the last indicator of economic recession is an increase in unemployment. Jobs aren't cut until after capital expenditures drop, advertising spending slashed and production orders fall, because reversing job cuts is expensive. It works in reverse. Businesses don't add employees before the market recovers, but after they gear up for that recovery. Capital Expenditures (e.g. investments in equipment in preparation for increased production) increase when business owners perceive increased demand (an indicator: increased consumer spending). Then, advertising is renewed, production orders increase and only then are new jobs added -- because that is the most expensive act to undo.

So, why was third quarter GDP revised? The new number reflects "stronger investment by business on new equipment and software, less severe cuts in companies' inventories and more brisk spending on residential projects." Looks like we are set now for jobs to be added, probably at the beginning of the new year.

Will the Democrats spin the news of sunshine as rain?

John Edwards, last night, articulated the winning strategy for Democrats: "We have to offer a positive, optimistic, uplifting vision for this country. The American people are hungry for it. They are tired of complaints about each other." And complaints about the economy won't do in a recovery. Now, it remains to be seen if any Democrat can implement that strategy. None has so far.

Instead, they appear to hope for bad economic news and bad news in Iraq and increasingly, this is becoming the image of the Democratic party. Leaders don't emerge from such nattering negativity.