Fox expert pundit panel gets everything wrong on the economy

Good news, folks! On Thursday morning, Fox News assembled a panel of expert pundits to explain why the nation's GDP shrunk by 0.1 percent in the fourth quarter of 2012, and boy oh boy did they ever deliver some insightful analysis. For example, Charles Payne of their business channel revealed this stunning conclusion: "The economy has been slowed in part because there has been a war on success and constant threatening and demonization of business."

Well that's a bold explanation. The only problem with it is that despite declining in the fourth quarter, GDP grew faster over the course of the full year of 2012 than it did in 2011. And that means that if President Obama is waging a war on success, he's doing a pretty shitty job of it, because on a full-year basis, growth accelerated.

Fortunately, Fox is a Fair & Balanced network, so Payne's attempt to pin all the blame on President Obama didn't go unchallenged. Instead, former Clinton pollster Doug Schoen said both sides were to blame. Why? Because, he said, "we haven't done full-scale tax reform, entitlement reform, spending cuts, we haven't looked intelligently at defense, we haven't dealt with the issues of the debt and the deficit."

Uh, sorry Doug, but that's feel-good puffery with no basis in reality. GDP dropped during the fourth quarter because government spending dropped. It had nothing to do with the failure to achieve a grand bargain or make even bigger cuts. It had everything to do with a 22% decline in defense spending.

Towards the end of the segment, Payne took another shot at explaining the economic slow down. "Today we got numbers out on income and spending," he said, noting that income skyrocketed. "What scared me about the report, though, was spending was really below estimates. Again, it feels like maybe the American people are beginning to hunker down."

Actually, spending growth was in line with estimates'and it grew, just as it did in the fourth quarter. In fact, consumer spending growth in the fourth quarter is a big part of the reason the quarter didn't turn into a complete disaster. Not only that, consumer spending accelerated in the fourth quarter from the previous one.

Facts notwithstanding, the image of consumers hunkering down is fairly easy to visualize, so it's no surprise that Schoen decided to agree, but with a twist. "Given that have no long-term agreement [to cut spending], consumers are doing exactly what you're saying, they're hunkering down, because they're scared."

Well, they aren't hunkering down, at least not in the fourth quarter. But if they had been, it certainly wouldn't have been because there's no long-term spending cut deal because there is a long-term spending cut deal. It takes effect on March 1. And as we learned with yesterday's GDP report, the GOP's insistence on proceeding with it'or cuts that are equivalent with it'the single biggest threat facing the economy.