Economy UP

“In spite of the gloom and doom that the National Press predicted for Forth Quarter performance the economy actually grew 1.4 percent.

The Liberals have a vested interest in a slow economy and they are fudging the numbers and hampering growth for political gain.”

“Much of the "growth" was gasoline prices going up.”

“I rest my case.”

“Rest it on what?”

“Another good example.”

“This is useless”

“LA Times

GOP Always Falls Down on the Jobs

Without fail, the jobless rate rises under GOP president, according to data since 1947

By Larry M. Bartels, Larry M. Bartels directs the Center for the Study of Democratic Politics at Princeton University's Woodrow Wilson School of Public and International Affairs.

President Bush appeared in Ohio, Missouri and Indiana this month to tell Middle America that the U.S. economy was now "looking up." But a Labor Department report that employers shed another 93,000 jobs in August intensified public concerns about a "jobless recovery" and persistent unemployment. "We've got a short-term problem," the president acknowledged, but he added that tax cuts and economic growth would spur job creation.

The question that looms large 14 months before the 2004 election is how much, if any, of the current unemployment problem should be blamed on President Bush. The president's supporters point out that the economy was already in a recession when he took office and that employment trends were significantly affected by long-term changes in technology, demographics and foreign trade. Critics respond that Bush, as his father did, has paid too little attention to domestic economic problems and done more for the wealthy than for the jobless.

Citizens wary of contradictory partisan claims would do well to look at the record. The Bureau of Labor Statistics has monitored the ups and downs in unemployment since the 1940s. The figures show that presidents can and do have a significant effect on the job prospects of working Americans.

Simply put, these statistics indicate that high unemployment has been a chronic problem under Republican presidents. From 1947 through 2001, five Republican presidents produced an average unemployment rate of 6.3%, while five Democratic presidents produced an average unemployment rate of 4.8%.

Regardless of the specific economic conditions and challenges facing each president, average unemployment rates have been more than 30% higher under Republicans than under Democrats. Given the current size of the civilian labor force, that difference suggests that there would have been more than 2 million more jobs under President Gore than there are now under President Bush.

What about the argument that Bush inherited an economic downturn? The comparisons presented here attribute the 2001 surge in unemployment (from 4.0% to 4.7%) to Bill Clinton and similarly assume that each president's policies took effect one year after his inauguration. However, significant partisan differences appear in the data regardless of whether we assume that presidents' policies take effect in the year they assume office, the next year or even two years later.

Are those differences mere coincidence? Perhaps — but they have persisted with striking consistency through periods of war and peace, presidential ascendancy and scandal, and economic expansion and retrenchment. Allowing for nonpolitical employment trends doesn't make the differences go away; nor does focusing on changes in unemployment from the level prevailing at the beginning of each president's term; nor does limiting the comparison to the last 15 or 20 years.

Why would Republican presidents routinely produce more unemployment than their Democratic counterparts? One answer has to do with the two parties' distinctive supporting coalitions. The Republican Party appeals disproportionately to people with high incomes, while the Democratic Party draws support from those with modest incomes. For example, in the 2002 National Election Study survey, about 25% of Republican Party identifiers had family incomes above $85,000 and a similar proportion had family incomes below $35,000; but fewer than 15% of Democratic identifiers had family incomes above $85,000, and more than 40% had family incomes below $35,000.

Not surprisingly, then, the parties have pursued different economic policies. Democratic presidents have aimed to stimulate the economy and boost employment, benefiting people of modest means. By comparison, Republicans have concentrated on reducing inflation and, in President Bush's case, cutting taxes, which has benefited the wealthy more than the middle and lower classes, while doing little to create jobs.

The current unemployment rate, 6.1%, corresponds almost exactly with the average unemployment rate under the five previous Republican presidents. What's more, the increase in unemployment from 2001 to the present, 1.4%, corresponds almost exactly with the historical difference in average unemployment rates between Republican and Democratic presidents.

Both of these comparisons underline the fact that the current employment situation is neither unusual nor short-term. Rather, it is a predictable consequence of priorities and policies that have characterized Republican administrations throughout the last half-century.”

“If you consider the fact that my dollars are worth less than ever before in MY lifetime a good thing, then yeah, I'm better off...



...NOT!”

“Hey, stop makin' with the negative waves, Moriarty!”

“Ok, Tom! Then you get the daunting task of finding me something positive this administration is doing!”

“I'll get back to ya :]”

“When? 2004?”

“In November '04 I believe there will be cause for dancing in the streets!”

“It doesn't matter what you wear
Just as long as you are there



(don't forget the Motor City)”

“Baltimore and D.C. now!”

“Ewww,,, thanks for the vision.

Do you guys ever work?”

“Yeah, BR! They're economic forecasters for the Bush Administration...”

“Ever work?

Hell no, we're among the working wounded!

Ya know, a dollar ain't a dollar anymore.”

“First Japan, now China is the culprit

In reality, the US has only itself to blame for its swelling trade deficit

Joseph Stiglitz
Wednesday October 15, 2003
The Guardian

For decades America seemed to dominate manufacturing, so US officials focused on liberalising trade in manufactured goods. They put little effort into creating a level playing field for farmers, since they knew the US couldn't compete in agriculture.
Now China is out-competing everyone, racking up huge trade surpluses with the US. So America's treasury secretary accuses China of deliberately keeping its exchange rate low, and calls for China to let market forces determine the value of the renminbi. The departing IMF chief economist, Ken Rogoff, warns that the surpluses put global stability at risk.

For those who recall east Asia's crisis of five years ago, much of this seems to run counter to what was said then. China was urged not to float its currency. Until Argentina's peso imploded, fixed exchange rates were fine. The US treasury welcomed government intervention in exchange rate markets, and encouraged the IMF to support such interventions with mega-billion dollar loans. If China had let its currency float back then, it would have depreciated in value, deepening the crisis.

Countries were warned: avoid trade deficits and build up reserves, because they are the key frontline defence. East Asia's countries followed that advice, and for a good reason: they had seen the consequences of a lack of reserves. East Asia's governments knew then that the IMF's policies would deepen their downturns, but were helpless to resist. The IMF had the money they needed. China and Malaysia, lucky enough not to have to turn to the IMF or brave enough to set their own course, did what every textbook said to do: they pursued expansionary monetary and fiscal policies. China's economy continued to grow at 7%; Malaysia had the shortest and shallowest downturn.

To understand what is at stake, a few basic economic points need to be spelled out. First, international trade is based on the principle of comparative advantage: countries export goods in which they have a relative advantage and import goods in which they have a relative disadvantage. America now has a relative disadvantage in manufacturing, while China has a relative advantage. China should be exporting manufactured goods to the US.

Second, if a country invests more than it saves, it will need to borrow, and the counterpart to that borrowing is a trade deficit. America's burgeoning trade deficit is a result of Bush's unprecedented mismanagement. Tax cuts that the US could ill afford turned a huge fiscal surplus into a massive deficit; rather than saving, America is borrowing, much of it from abroad. That - not China's exchange rate policy - is the culprit.

In fact, China's overall trade surplus today is small, around 1% of its GDP. Of course, the Bush administration wants to shift the blame, but neither China, nor anyone else, should be fooled. This is reminiscent of what happened 20 years ago, when President Reagan engineered huge tax cuts which incited huge fiscal deficits, which in turn led to huge trade deficits. Back then, Japan was blamed!

The harsh truth is that neither the IMF nor the Bush administration really believes in free markets. They interfere with markets when it suits their purposes. Bush supported bailouts for airlines, unprecedented subsidies for agriculture and tariff protections for steel.

The IMF is right: there is a real risk of global instability, but the underlying cause is massive US borrowing from abroad. If, some day, America's creditors decide that they want to hold fewer dollars, it could set off large exchange rate movements, causing global instability. Why hasn't the IMF sternly criticised these deficits?

This problem is compounded by the global reserve system, which sees most countries demanding US dollars, effectively to bury them in the ground. The system requires the reserve currency country (the US) to be a massive debtor - to the point where others lose faith. But to solve deep-seated problems with the global financial system, we need to go beyond the complacency that has long marked the G-7 and the unilateralism that defines the current US administration.

China is right to have ignored America's demands. Floating the exchange rate would expose the country to instabilities that would lead to a host of further problems. A higher exchange rate would undermine job creation and would contribute to deflation, which China is successfully combating.

China is fortunate to have the freedom to follow its own views. Its huge foreign currency reserves give it the freedom to ignore the IMF and the US. In the end, this may be the most compelling reason for why China should continue to run trade surpluses. Once again, China has shown its mastery of basic economic principles. Others in the region only wish that they could have acted similarly.

· Joseph Stiglitz , professor of economics at Columbia University, is a Nobel prize winner and author of Globalisation and Its Discontents”

“Oh well, I guess we’ll just have to wait a while longer for that “trickle-down” effect to kick in:

Affluent Gain Confidence, Slow to Spend

NEW YORK (Reuters) - Affluent Americans are increasingly optimistic on the U.S. economic outlook, yet are not spending more and expanding their investments only slowly, a survey reported on Monday.

continued


I know, I know! Time for another tax cut:

House Leaders Are Pushing to Cut Corporate Taxes

WASHINGTON, Oct. 23 — House Republican leaders are nearing agreement on a bill to give nearly $60 billion in additional tax breaks to corporations, brushing aside Democratic complaints that the measure would deepen the federal budget deficit.

According to a draft circulated among Republican lawyers, the bill, which is expected to come up for a vote next week at the House Ways and Means Committee, would gradually reduce the corporate tax rate for most companies from 35 to 32 percent.

It would also relax or abolish a number of longstanding tax regulations on foreign profits of American multinationals, a move that Congressional tax analysts say could save companies more than $40 billion in taxes over the next decade.

continued”

“Unbold.”

“Right up the old whazoo!”

“Sheesh, Undead! I take it that, other than your continual spam of this forum with your grim and angry and pessimistic view on life, you're an otherwise semi-happy individual? I sure hope so! Gosh, you sound like you'd be as fun to hike with as one of those toll booth collectors at the Bay Bridge! Smile, dude. Okay, you don't have to, it's just a suggestion.”

“"Right up the old whazoo!"

Hey hey! Keep your sexual preferences to yourself!

Hey Buck, if someone taught Violin how to backpack he'd be a lot more lighthearted.”

“Why don't you both #&%!$ off?”

“LOL! Don't worry Viola, day hiking still counts as hiking...just not real backpacking. It's OK. Stick to what ya know as I always say.”

“Somebody tell me when I can quit grabbing my ankles, I think my foot is falling asleep.”

“One person's grim and angry is another's insightful and informative.”

“"Somebody tell me when I can quit grabbing my ankles,”

November 22nd around 3:30 PM EST.”

“Ditto what Tom posted. You're alright Violin.”

“hmmm, the market finished 185 UP today.....anybody got a 401K?


didn't think so...


the economy is crankin up and liberals are crackin up.....keep tryin, maybe people will believe you when you tell them they are miserable....















BAAAAAAAAA HAHHAHAHHAHAAAHAHAHAHHAHAH!”

“The economy is based on Bush's writing blank checks, moron. If I could write $500 billion to debt each year, I could create the illusion of wealth, too.”

“Sheesh strat, maybe you think that having the International Monetary Fund warn the US about our fiscal indiscipline is good news, but that sort of thing is usually reserved for banana republics.

The IMF's cheif economist, Kenneth Rogoff, put it this way, "If we were looking at a poor developing country, the world gives them just enough rope to hang themselves. A country like the United States, they give them enough rope to tie the noose around their neck several times. But it does happen in the end."


I don’t remember there being an electoral mandate to eliminate taxation on capital or to bankrupt the New Deal and Great Society. In fact, I thought Bush’s platform was to return a small percentage of the (long gone) surplus to taxpayers. Talk to some folks old enough to remember life without these programs and explain to me why you think we should return to that economy.”

“Damn it Strat! You know libs hate to hear good news when there's a repub in the House! Keep your happy, sunshiny news to yer self!”

“Mostly just copper mines and tourism. The snow tends to keep people away.”

“Loss of 3 BILLION jobs, record deficits, a looming credit crunch and plummeting dollar. Yeah, you’re right, I can’t stand to hear the good news when a Republican in da house.

This is very serious stuff folks. It goes way beyond partisanship.”

“Big whoop Strat; the Dow is almost up to 1999 levels...the NASDAQ's at 1,923 compared to 5,000 3 years ago.

Interesting, the DOW was about 11,700 when Bush took office...
9,741 today”

“Yeah... I'll say... when every man woman and child in the US has lost an average of a dozen jobs each, that is way serious.”

“Seriously though... the loss of 3 million jobs, despite the war effort and huge deficit spending is very serious.

Like the Onion had Bush saying at the inaugural, "Our long national nightmare of peace and prosperity is over."”

“You say million, I say billion.

Let's call the whole thing off !”

“Yep! We are in a recession

http://apnews.myway.com/article/20031030/D7UGHGD02.html”

“No one said recession. It is a jobless recovery. The old term was "growth recession".”

“Insiders can’t wait to sell
MSN Money columnist Michael Brush offers this look at the trend in legal corporate insider selling.

For months, insiders have been negative on stocks, but last week they turned downright depressing -- as selling hit the worst levels in over three decades.

Insider selling by executives and directors of shares in their own companies outweighed buying by an enormous 10 to one. "We have not seen a level of pessimism of this magnitude since we started tracking corporate insider trading activity in 1971," says Vickers Insider Weekly, an Argus newsletter that tracks insider activity.

The newsletter's eight-week rolling sell/buy ratio, meant to smooth out weekly blips, also hit record lows -- with insider selling six times as much stock as they bought. "That exceeds by a significant margin the previous record rate of selling, which occurred in August of 1983," says the newsletter. "It is a strong indication that, in the eyes of corporate executives and directors, the market is not currently a safe place for investment capital."”

“Dollar down, Deficit up. Will inflation remain at bay long enough for Bush to have a chance in 2004?

We've gone from big budget surplusses to huge deficits. We've gone from a soaring dollar to a crashing one... with the Euro setting new records against the dollar. McCain and the bipartisan Concord Coalition are incensed at the huge pork barell spending that is resulting in spending increases at twice the rate of the Clinton years. It will be worse if the energy bill passes.

I think Bush is counting on the chickens not coming home to roost until after the 2004 election.

The Euro is up more than 25% percent against the dollar since Bush took office. I think this is a reflection of the fact that the US budget is totally out of whack. In the short run, the crashing dollar should stimulate US exports. In the long run, it will hurt... everything we need to import (including oil) will get more expensive.

Also, I look at the figures for the expanding economy over the past few months. First, it still has miles to go before it begins to get back to where it was when Bush took office. Second, its expanding in dollar terms. If we look at it in Euro terms, Yen terms - or in terms of what it can buy internationally, any gains are more than wiped out. I read, watch and worry.”

“If the administration announces the economy is improving, it triggers a new round of layoffs.”

“Don't worry, Ped. Worrying will take away from your shopping time.”

“LOL!”

“Sorry Geo,

Unemployment has dropped each of the last three months.”