- The Washington Times - Monday, August 12, 2002

When voters went to the polls on Nov. 7, 2000, the reported annual economic growth rate for the first three quarters of 2000 averaged 4.4 percent; reported corporate profits, having seemed to rise inexorably, smashed records from one quarter to the next, and the unemployment rate was below 4 percent. What a contrast, then-Vice President Al Gore constantly reminded the nation, with the economic environment eight years earlier. When voters went to the polls on Nov. 3, 1992, for example, the reported annual economic growth rate for the first three quarters of 1992 averaged 2.4 percent.
With the exception of the October 2000 unemployment rate, which was poised to rise by more than 50 percent with the onset of the recession that began three months later, none of those statistics we now know was true.
In fact, revised data reveal the annual economic growth rate during the first three quarters of 2000 averaged less than 2.7 percent, falling to 1.1 percent during the fourth quarter. On the other hand, revised data for 1992 reveal that the annual economic growth rate for that year's first three quarters averaged 3.6 percent, rising to 5.4 percent during 1992's fourth quarter. Far more staggering are the revisions to the alleged record levels of corporate profits for 2000. In fact, we now know, pretax profits for nonfinancial domestic industries peaked at $504.5 billion in 1997. Those profits then declined during each of the next three years, completely contrary to the reports emanating from the Department of Commerce throughout the last three years of the Clinton-Gore administration.
The differences between the contemporaneous reports in 1999 and the first half of 2000, on the one hand, and the subsequent revisions, on the other, are absolutely astounding. Reported corporate profits for 1999 were $530.4 billion. They were subsequently revised downward by 16 percent to $455.9 billion. For the first two quarters of 2000, the annual rates of corporate profits were reported to be $574.9 billion and $606.5 billion. These figures have since been revised to $441 billion and $449.7 billion, respectively, reflecting downward adjustments of 30.4 percent and 34.9 percent.
How could discrepancies averaging a stunning $145 billion during each of the first two quarters of 2000 be possible, columnist Robert Novak, who first reported the massive revisions, wanted to know. "The gap is a bit larger than usual," Brent Moulton, associate director of Commerce's Bureau of Economic Analysis (BEA) acknowledged to Mr. Novak, "but not really out of line." Well, compared to the profit overestimations exceeding 30 percent during the crucial first two quarters of 2000, the BEA underestimated profits by a relatively paltry 10 percent during 1996 and overestimated profits by a mere 2.5 percent in 1997.
In hindsight, we now know, the falsely reported surging profits from the second half of 1998 through the first half of 2000 fueled the soaring stock market. This, in turn, generated wealth, which financed greater consumption. It also encouraged the massive overinvestment, which, given the rapidly deteriorating economy evidenced by the downwardly revised growth figures for 2000, probably prevented the economy from falling into recession during a presidential election year.
There is no evidence that Clintonistas infiltrated the BEA to produce these colossally false profit reports. At the same time, there can be no doubt that the supreme beneficiary of these conveniently timed false profit reports was none other than President Clinton's designated successor: Al Gore.

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