Republicans stubbornly insist that tax hikes are job killers despite copious evidence to the contrary.  The expiry of President Obama’s payroll tax holiday coupled with the legislative phaseout of many Bush-era giveaways should have, by their central tenet, strangled the economy.  Yet the private sector has expanded for 31 straight months and the housing sector has stormed back; prices in the most deeply ravaged markets (Las Vegas, Phoenix) have jumped over 20% in the last year.  And even though sequestration couldn’t preclude consumer sentiment from reaching a five-year high, Democrats resolutely drone on about government spending as the life-blood of the economy.  In fact, California’s unexpected budget surplus has sparked an internecine battle as to how best to piss away the excess revenues as fast as humanly possible.

Yet today’s most discredited economic theory comes not from Washington, but rather from the hallowed halls of Harvard University.  In a 2010 study, economists Carmen Reinhart and Kenneth Rogoff avowed growth begins to dramatically plummet once a country’s debt-to-GDP ratio hits 90%.  While the study has been widely paraphrased to justify austerity measures both in Europe and here at home, researchers at the University of Massachusetts at Amherst have recently debunked the work by uncovering  “coding errors, selective exclusion of available data and unconventional weighting of summary statistics.”  In other words, Reinhart and Rogoff fudged the data to support their assertion that the average real growth rate when debt exceeded 90% of GDP was  -0.1.  Actually, the real growth factor was more like +2.2, but then again this kind of thing is far from novel at the Cambridge campus; National Academic Quiz Tournaments vacated four Harvard wins from 2009 to 2011 after discovering a student hacked into its database, while 60 others were dismissed for cheating on a take-home exam.

What is true is that the economic recovery has been rather uneven: housing and financials are booming while commodities remain in the shitter.  Even within sectors, fortunes can wildly diverge.  In the last quarter, Tiffany’s earnings rose significantly while Target’s earnings plunged by a fifth.  JC Penney, meanwhile, may well be the worst of the discount retailers, posting a loss of $348 million on rapidly eroding same store sales.  Although jcp.com Internet sales were off by a third, one item, namely the Michael Graves Design Bells and Whistles Stainless Steel Tea Kettle, sold out in a matter of hours once consumers noticed the appliance’s uncanny resemblance to Adolf Hitler.  Looks aside, however, the reviews have been less than stellar.  One user complained the screak wasn’t loud enough to be heard in the next room while another grumbled, “I couldn’t even fit a whole Jew in it.”