Behind the 5.7 % Growth Number

Economy: Gross domestic product grew a robust 5.7% last quarter - much stronger than expected. Like everyone, we're glad the economy's getting back on its feet. But this number isn't nearly as good as it looks.

After two years of no growth at all, that annual rate of growth looks dazzling, gaudy even. But scratch the surface, and another picture emerges - one not of gathering strength, but of ongoing weakness.

So let's deconstruct that 5.7% a bit. For one thing, most of the gain - nearly two-thirds, in fact - was a result of an end to the panicked inventory liquidation that took place at U.S. firms last year. Remove that, and a different picture emerges - a 2.2% rise in GDP.

Most economists agree that GDP growth of 3% or so is needed to boost employment. That may in part explain why GDP could grow 2.2% in the third quarter and 5.7% in the fourth quarter, while businesses slashed 735,000 jobs over the same six months.

More meaningful is year-over-year growth. By that measure, we barely grew - real GDP rose just 0.1% in the fourth quarter from last year, virtually flatWorse, real nonresidential fixed investment - a proxy for business investment in future output - plunged 14.6% from last year. That's a shocking vote of "no confidence" in Obamanomics by America's entrepreneurs and businesses.

We wish that was all, but it isn't. According to the Labor Department, wages and benefits rose in 2009 by just 1.5%, the smallest rise in history. Meanwhile, weekly earnings for nonmanagement workers fell 1.6% last year, the worst since the 1991 recession.

These subpar numbers only underscore the weakness of our job market. In just two years, we've destroyed almost 8 million jobs and watched as the unemployment rate surged to 10%.

Early last year, we predicted the economy would turn up later in 2009, and that those in government would claim it was all due to their massive spending on stimulus and bailouts. That's exactly what's happening now.

The fact is the economy, after its big drop in 2008, was set to rebound anyway. It's resilient. (And zero-percent interest rates don't hurt). If things had been done differently, we'd be in a huge recovery by now, with job growth of 200,000 or more a month.

Instead, after $862 billion in "stimulus" and $700 billion in bank and auto company bailouts, our real economy's barely growing and we're left counting gimmicky short-term inventory reversals as "economic growth." That's one reason why the stock market yawned Friday, despite the "good news."

In recent days, President Obama has returned to his old nostrums, once again proposing to raise taxes on the successful, increase regulations and everywhere punish success. He's still dead-set on an economy-destroying health care takeover - not to mention a cap-and-trade program that will saddle businesses and homeowners with enormous new taxes going forward.

If we didn't know better, we'd almost think this was deliberate. Despite the manifest failure of the policies followed for the last year, the president seems to be doubling down on his bet. If so, we think it's a losing one.