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Friday, October 26, 2012

Fox News accidentally reports economic truth

Steve Benen:
The economy grew a little faster than expected in the third quarter (July through September), with the GDP report showing 2% growth. I suggested earlier that the right would likely start pushing conspiracy theories, and I wasn't kidding.

Fox News' Stuart Varney suggested that third quarter economic growth as measured by the Commerce Department was a conspiracy to help reelect President Obama, pointing to the fact that economic growth was driven in part by increased government spending. [...]

Varney, discussing the figure on Fox News, raised doubts about the numbers, saying: "Dig deeper. Look inside that report, and you see a big 9.6 percent jump in government spending. There is some suspicion that these numbers have been juiced by government spending deliberately in that quarter, in the report, right before the election."

In fairness to Varney, it looks like I predicted the wrong conspiracy theory. I thought Fox News and others would accuse Commerce Department officials of manipulating data and deliberately releasing fraudulent figures, just as the right did with the Bureau of Labor Statistics.

It turns out, Varney is pushing a different conspiracy theory -- that government spending went up, which in turn "juiced" economic growth.

Of course, there's a term for that particular "conspiracy theory" -- Keynesian economics. After years of shrieking that you can't spend your way to economic recovery, Varney's basically saying, "Of course the GDP numbers are up -- government's cheating by spending their way to economic recovery! They're using Keynesian Jedi economics tricks to fool us into believing that Keynesianism works!"

What we're seeing here is the rare 360-degree spin. Varney's twisted his story so badly that he's turned everything completely around in one orbit -- and now finds himself accidentally reporting the reality that Keynesian spending boosts economic growth. I'm surprised Fox producers didn't cut him off and put up a "technical difficulties" message over the screen.

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