While the Media Spun Its Wheels, the Economy Gained Traction in Q2

Comedian Jerry Seinfeld once joked that it’s amazing that every day the world’s news always fits the exact dimensions of a newspaper. It seems quaint now. Newspapers are a shrinking business, replaced instead by the 24-hour cable news cycle and the boundless content of the internet.

Even though the size of the vehicles delivering the news have increased exponentially, the amount of hard necws they’re carrying feels, if anything, smaller. Consumers are offered up every conceivable angle, opinion and viewpoint of a given story, but the problem is that we’re only given stories that conform to the chosen narrative.

What this means is that journalism, which often takes reporters down rabbit holes filled with unpredictable twists and turns, is dying. Editors and producers need to know where a story is going before they devote resources to taking the first step down the path. The result is that we know more about less. And the less is all in service of creating drama and fostering division.

Right now the narrative is that the White House is in chaos and that Washington is in disarray. But what about the issue that Americans care about the most: Jobs and the economy? Nary a peep.

So it wasn’t exactly surprising, though it was imminently disappointing, that when the new quarterly data about the economy was released there would hardly be a whisper about it. In any neutral environment, where facts won out over ideologies, the media should be shouting about it. After all, the new numbers showed that the economy grew at a 3.0- percent annualized rate in the second quarter, the best quarter in more than two years.

Most significantly, the results showed that domestic investment, which was initially only estimated to have increased by 2.0%, actually increased by 3.6%, making it only the second quarter in years that investment rose by more than 3.0%. Stephen Stanley, writing for The Hill, explains the importance of this number:

Business investment spending has been a laggard through most of this expansion but appears to be perking up this year. A revival in domestic energy production has contributed, but the big improvement so far this year has come in outlays for business equipment. This category posted an outright decline in 2016, as firms waited to see the election results and how the economy might play out post-election.

Going into 2017, business confidence jumped, likely reflecting optimism that regulatory policy would be less restrictive and, more importantly, that corporate tax reform might finally be passed. I suspect that what we are seeing now in terms of stronger equipment investment is merely a trickle of the pent-up reservoir of spending that could gush if a well-crafted corporate tax reform were to actually be enacted.

If anything, the numbers actually understate the economic progress made in the second quarter. Unusually, though business spending increased rapidly, inventories remained relatively flat, which actually subtracted a full half a percentage point from GDP growth. As companies work to build larger inventories in anticipation of sustained sales, the economy is set for continued strength through the remainder of the year.

These are tremendous developments that are, in some respects, directly related to hope in the Trump Administration. If a hearty congratulations seems inappropriate or premature, can we at least say definitively that this development is worth reporting even if it doesn’t contribute to the prevailing anti-Trump narrative?

Perhaps the better question is whether it matters at all. If businesses are willing to up their investment on the hope of a more friendly regulatory and tax environment, one that actually incentivizes them to invest in America rather than keep money stashed abroad, imagine what actual tax reform will do. And whether or not Americans read about those legislative achievements in the newspaper, they will no doubt feel it in their pocket books. And regardless of the media moment du jour, putting more money in the hands of more Americans is what matters most.