Economy UP

“Clinton raised taxes on the upper 1.2% and lowered them on the bottom by expanding the earned income credit. The budget worked its way to surplus and we had a record breaking expansion with what was thought to be unattainable employment figures.

Kerry is proposing something quite similar.

Please explain why you think it wouldn’t work this time around, arclite.”

“We make 50% Nokia products here, please tell me the 3000 workers here that the 300 jobs in New York should be what they plan to do when they get layed off. The overall economic plan by Bush is to raid everything domestic and use military means and government jobs to improve our power in world politics. in other words a war economy. We will pay for it in education, health, and other domestic programs. The overall economic plan by Kerry is completely new and untried, and because of that we cannot know the outcome. I admit that it sounds like a risky proposal, but my bet is on the wild card, not the predictable. How do you feel about your tax return going towards your gas bill? Does the Bush administration really want to push the hydrogen fuel cell? What about more options for tax-reduced wind and solar? Do you know of any American-made cars that run on alternate fuels, how many? Why have electric cars fizzled out? What incentives do we have? I have to read Bush's budget on Cspan before i can comment specifically. I am also investigating amconmag.com , spectator.org, for traditional conservative viewpoints.”

“So, Arc, should there be any regulations on the "free market" at all? Please explain.”

“"Please explain why you think it wouldn’t work this time around, arclite."

Violin


Clinton didn't increase spending as Kerry has talked about. Clinton did well to let the economy take care of itself. He also presided over the dotcom bubble. Since the President doesn't control the economy, I’m not sure why people gave him credit for a surplus fueled by taxes collected on an overvalued market. That bubble burst and the “liberals” blame Bush. Go figure. It’s a different economy, Violin. I can’t find an economist (even in The Economist) who believes that Bush's tax cuts didn’t help fuel this recovery. I have a philosophical problem with soaking the rich, Violin. It’s easy for some people to take from “the other guy” for good intentions. I’m not one of them. I have a moral problem with that philosophy and I don’t believe in socialism. Kerry is also proposing a business tax reduction. What will he do, make up for it by soaking “rich” private individuals?

What about the inheritance tax? I believe that it is shameful to double-tax money. The tax-free inheritance ceiling was $600,000 before Bush. Kerry says that he wants to return to those days. Say I want to give my wife $600,000 when I die because I want her to be able to live comfortably for the rest of her life. Kerry also thinks the stock market is too risky in which to invest our social security funds. So let’s invest our $600,000 at the rate of 3-year CDs. At around 3% that would give my wife a whopping $18,000 a year to live on. Just at the time in her life when I would have liked to provide her with good healthcare. So Kerry thinks I should not be able to control how I pass down the entirety of my life savings. That’s a philosophy I have yet to hear justified. Do you justify that philosophy, Violin?



Le Bast, it’s so interesting how talk as if you have a complete handle on Bush’s overall economic policy. But I don’t believe that you do. I think you’re speculating about things you don’t truly understand.

Without my tax refund, my gas bills would have effected me much worse. Are you saying you think Bush caused gas prices to rise?


“Does the Bush administration really want to push the hydrogen fuel cell? What about more options for tax-reduced wind and solar? Do you know of any American-made cars that run on alternate fuels, how many? Why have electric cars fizzled out? What incentives do we have?”

Le Bast

Now this is worthy of discussion. I don’t know. Reagan cut funding for solar energy incentives and I think it was a big mistake. I understand his reasoning, but I would have preferred that our govmint take a lead in this. Business often doesn’t think further ahead than the next quarter, let alone five years. I would love to see more expansion in energy efficiency and alternate energy. But rather than mouth about how someone else should provide me with a solution, I’m doing something about it. All of my buildings are as energy efficient as I can make them. What kind of house do you live in, Le Bast? I’ll bet you chose price and curb appeal as your parameters, rather than environmentally friendly and super energy efficient. Most folks do.



"So, Arc, should there be any regulations on the "free market" at all? Please explain."

Dunadan

Of course there should, Dun. In my opinion, they should be as few as possible. But I'll leave exactly how to do it up to people with much more knowlege about economics, and legal philosophy, than I have. When I see something I don't like, I'll talk about it, as is my democratic right. Having educated myself to a small understanding of economics, I know that Kerry's idea of protecting jobs here is a bad one.”

“arclite, you make some very interesting points (dotcom bubble, inheritance tax, alternative fuel vehicles. i have thought about those three a good bit in the last week. i have also come to much the same conclusion you have. thank you for articulating it a bit for me.”

“Electric cars fizzled out because they were the wrong first step in the move towards more "green" transportation.

Too much of a jump forward waaaaaaaay too soon. The infrastructure wasn't ready and the American consumer wasn't ready. It's a fact that Americans generally adopt new technologies as consumers slowly and they need more targeted marketing to accept radical ideas.

The true next step is highly fuel efficient gas powered cars (40 mpg '05 ford escape to name one), then hybrids (honda insight and toyota prius and much more palatable to the average American the Toyota '05 highlander hybrid) When the American consumer can be convinced that they won't be giving up anything to go electric then the movement will gain momentum.

The electric car is not dead. It has been tabled until the infrastructre and public mentality has been made ready.”

“"Too much of a jump forward waaaaaaaay too soon. The infrastructure wasn't ready and the American consumer wasn't ready."

humanpackmule


Interesting point, HPM. I’ll never forget a conversation I had with a guy in banking back in the 70s. When asked if I thought solar energy was a good idea, I said that I did and talked on about the benefits of environmentally friendly solutions and energy efficiency. He said that people weren’t yet ready to invest capital in a risky idea because the monetary payback was not good enough.

I’ve since learned that it takes more energy to create the components for solar electric collection than the energy saved. If you look at the problem from a total system perspective, we don’t have the problems figured out.

I’ve wondered if we will eventually discover that electricity-generating windmills are effecting climate by changing wind flow patterns. There are many variable parameters to figure into any problem. Many folks try to oversimplify issues. That doesn’t work for me.

One thing that is easy is making houses more in tune with their environment. That is something that has fascinated me for years. The houses most folks live in are not well designed for their climate. People want to impress others with the size and “good taste” of their houses. People want curb appeal so that the house sells faster. This is really a catch-22. I want a house that is designed specifically for its site. There are designs that take advantage of local climate and do not add substantial cost to the structure. I prefer substance over style.



BTW, isn't it great that our economy is recovering thanks in part to our tax burden being reduced?”

“Contrary to what the title might lead you to expect, "The Economist" is not a scholarly journal of economics, arc - it's a newsmagazine with a decidedly conservative bias.

There’s no doubt that Bush’s deficit spending helped stimulate the economy. The Congressional Budget Office has estimated that it had very little effect however and warns that the long-term impact will be hugely negative. The International Monetary Fund has given us a warning usually reserved for banana republics. Seems like the cost far exceeds the benefit, especially since there were far cheaper and time proven tools available.

Kerry has already explained how he proposes to pay for a cut in corporate tax rates (a good move in my book). Surely you’ve been reading all about it (or do you get your news filtered by talking heads too?).

Not all liberals give Clinton such high marks on the economy arc. If you’d like an insiders view of the successes and failures of Clinton’s handling of the economy, I highly recommend reading “The Roaring Nineties: A New History of the World's Most Prosperous Decade” by Joseph E. Stiglitz, head of Clinton’s economic advisors and past World Bank chief economist. You do read things that challenge your preconceived notions, don’t you?

As for the rest of your post - we’ve been over those points too many times.”

“I’ve since learned that it takes more energy to create the components for solar electric collection than the energy saved.

Over what time table? If you're talking about the effective life of the equipment, I'm pretty sure that's incorrect.”

“Of course, it also depends on where you're setting the panels. A solar panel in New Mexico is going to produce better than one in Vancouver.”

“arclite - is there an example of the houses you speak of? What you say about that sounds very interesting.”

“Arclite and I share an interest in sustainable architecture, it would seem.”

“here ya go Earthships Thats just one school of thought. There are a some less radical ones out there too.”

“I think Prowler wanted to build one of these. They kinda remind me of something out of Star Wars.”

“Earthships, Straw-bale construction, standard passive solar, rammed earth, and a number of other alternatives exist for sustainable architecture-type housing. It's all pretty fascinating stuff.”

“I don't know if I would want to live in one but I find arcology comunities fascinating. If I ever get wealthy I'd love to see Arcosanti completed. That and the Groupius designed cathedral in Barcelona.”

“Wind generators disrupting wind-flow patterns???? Maybe that is why the GW administration doesn't want to protect our public forests. All those nasty trees disrupting wind-flow patterns.
Arc, I'm sure you've seen a wind tower. There is very little of the structure to stop the wind. They have to be built that way, and the props actually move with the wind. So, in conclusion, we can put that concern to rest.”

“OK. I can’t just let it lie there. Do you do these things to cloud the issue, arc? In what country would you pay taxes to leave money to your wife at death?


Clinton let the economy take care of itself? Was the intervention in the Mexican currency crisis doing nothing? Cutting capital gains taxes?”

“Violin's absolutely right. There is no inheritence tax between spouses. Your misconception may be a side effect of the misnomer "death tax".”

“clinton NEVER would have cut ANY taxes if not for the republican revolution.

never”

“The expansion of the earned income tax credit in 1993 was due to the republiCON revolution?

Go figure...”

“Violin, I never said that The Economist was a scholarly journal. I said that it wasn’t light reading for me. I’ve got opinions differing from yours about how “conservative” it is. What left-leaning economic journals would you recommend? The Independent Review seems to be right of center.

Deficit spending is always bad, but can have short-term benefits. That much is obvious. But you never mention how the tax cuts effected the economy. Since I have read a lot of articles from economists who all believe that it had a major impact, this seems disingenuous on your part.

I’m always open to new reading. ESPECIALLY when it doesn’t agree with my preconceived notions. My problem is finding the time to read everything that I’d like. Thanks for the recommendation. You’ve been a good source in the past, it’ll be on my list.



“In what country would you pay taxes to leave money to your wife at death?”

Violin

You and Phaedrus are right. I was wrong to use that as an example. Are you using that to conveniently ignore the question of whether I should be able to pass on the entirety of my life savings to my heirs? How about if I live to be 100 and my child is 80 and in need of good healthcare?



“Was the intervention in the Mexican currency crisis doing nothing? Cutting capital gains taxes?"

Violin

It should have been obvious that I didn’t mean Clinton did absolutely nothing. Why do you act stupidly on purpose? Cutting Capital Gains was a good idea in my opinion. Intervention in Mexico’s currency is a little cloudier. I have read some articles that pointed to bad consequences from that action. No, I don’t remember the exact articles. I’d need to do more research on that.



“As for the rest of your post - we’ve been over those points too many times."

Violin

What a cheesy way out of answering some simple questions. Do you think people with incomes over a certain amount should carry even more of our tax burden? Do you believe that double-taxation on inheritance is inherently fair? Do you think proposals for “protecting” American jobs make good economic policy? I am eagerly waiting to be educated.



"I’ve since learned that it takes more energy to create the components for solar electric collection than the energy saved.

Over what time table? If you're talking about the effective life of the equipment, I'm pretty sure that's incorrect."

Phaedrus

If you look at the entire process as a system, from extraction of raw materials to manufacture and installation, photovoltaics is much less energy efficient than many other ways to produce energy. The homeowner payback takes many years as well. It’s often as long as 15 years before the cost of installing photocells and batteries pays off. By then, it may be time to replace the system. But I was referring to the first point in my post. It doesn’t matter where you install photovoltaics. You need to look at the entire process as a system. Solar water heating is another matter.


I’m talking about entire fields of electricity generating windmills, Dunadan. It was just something I though about that I don’t think is entirely understood. Freon was a good thing until we understood more of its effects.



Laqtis, there are many books on various ideas for environmentally friendly buildings. I have always been interested in solar, earth shelters, and super insulation as ways to design. One of my favorite books is called, Design with Climate (Design with Climate). There are all sorts of good environmental ideas, but you’ve first got to know how and where to apply them. Design with Climate explains conceptual ideas like how adobe works well for homes in the desert Southwest, but not for humid climates like the Southeast. That’s because the massive adobe walls absorb heat all day, insulating the interior, and then slowly releasing it at night. In the desert, it gets cold at night because heat radiates to a clear sky. In humid climates there is not as much diurnal change in temperature due to moisture in the air. With adobe, your house would stay cool all day and then give off heat at night when most folks return from work. That process doesn't work well in places like Florida. It's good that the house stays cool during the day, but you don't want your walls giving off heat on a warm, humid night.

By the same token, massive walls work well for business occupancies in Florida. The building stays cool all day, and starts to radiate heat as everyone leaves work.

You’ve got to know which energy strategies work in what environments. There are reasons that people built adobe, cracker style, sod-roof, and different regional styles of buildings before we had hermetically sealed climate control. People came up with regionally sensitive design responses to local climate. I’d like to see us get back to that. Most folks don't think about it. But even among environmentally conscious people, I’ve run into many who think that rammed earth walls work everywhere. It’s best to understand the concepts first.

But this is a topic I know something about. Let’s get back to something I know less about so I can learn something. Doesn’t everyone agree that I should learn something? How many hands raised?”

“We have been over these things many times. I see you still insist on comparing the SS system to a retirement account even though you say you understand it's not. You know… if you think that SS should be getting a better return (you do understand that implies greater risk, right?) there is nothing preventing the government from going into the securities market if Congress says it should. They could be prohibited from voting so the gubmint wouldn’t ‘control’ business. Trouble is, that wouldn’t generate the huge fees that a semi-privatized system would – you don’t hear too many people pushing for such a system do you? It could be done without losing a big chunk of the gains to fees and yet nobody lobbies for it… hmmm… Wonder why?

The effect on our cost of borrowing by taking a huge buyer out of the market for treasury notes needs to be considered too.


As to your questions: “Do you think people with incomes over a certain amount should carry even more of our tax burden? Do you believe that double-taxation on inheritance is inherently fair?”
-- Asked and answered (many times). Yes and yes – I see them as dues for participation in a system that offers such great rewards.

“Do you think proposals for “protecting” American jobs make good economic policy?”
-- I am generally a free trader though I think that where corporations develop technologies with taxpayer funded research, we ought to benefit more from the jobs they create.”

“Also - I'm not sure what economists are saying the Bush tax cuts had a huge impact (do you mean pundits?). Everything I've read says somewhere from .5 - 1 % of GDP (or even less).”

“keep hopin for bad news boys...your pony is fading fast down the stretch....

the economy is cranking up and all you can do is try to convince people it isn't happening....

you want people to think it's bad bad bad. doesn't that seem odd? that you want people to suffer, to get laid off, to loose their life savings, to get kicked int othe streets?”

“Tax cuts are not 'spending'
By Roy Blunt

With deficits rising as a result of the war on terror and a faltering economy, the House has passed a budget for 2005 that will cut the deficit in half in four years and continue pro-growth tax-relief policies to make our economic recovery last.
One important component of the debate on spending is budget reform, and House Republicans are pushing for greater efforts to rein in spending by rooting out waste, fraud and abuse in federal programs. In fact, this budget mandates that five House committees must find $13.2 billion in wasteful federal spending in their areas of oversight over five years.

We also want to see all new federal spending paid for. In other words, if you want to propose a new program, you also need to propose a way to pay for it. House Republicans believe in this pay-as-you-go approach, known in Congress as PAYGO, as a realistic way to slash the deficit.

What we don't want to see, however, is PAYGO for tax relief. House Republicans don't believe that tax relief is "spending." To spend money, it must first be yours. To us, tax relief is simply returning a family's hard-earned money.

Also, the idea that tax cuts don't produce new revenues is wrong. Of course they do, if they lead to a stronger economy. President John F. Kennedy's 1962 tax cut increased the deficit in its initial flat-line projections. Like the tax cuts in the 1980s, though, it ultimately created a huge increase in total federal revenues.

Putting more money in the pockets of American workers is the most effective and direct way to grow the economy and create jobs. We saw that firsthand last week with the announcement of 308,000 new jobs in March, the strongest monthly job growth in four years. President Bush's tax relief is working, and so are more Americans.

On the other hand, PAYGO for taxes is a recipe for higher federal spending, stymied economic growth and further reliance on the outdated notion that Washington politicians can spend families' money better than they can.

Rep. Roy Blunt, R-Mo., is House majority whip, the third-ranking House Republican.”

“How times have changed
Charles Krauthammer
April 9, 2004

``This is the first generation in all of recorded history that can do something about the scourge of poverty. We have the means to do it. We can banish hunger from the face of the Earth.''
-- Hubert Humphrey, 1965

WASHINGTON -- When Hubert Humphrey said this almost 40 years ago, concern about the wretched of the Earth was the almost exclusive preserve of American liberalism. Barry Goldwater sure did not talk that way.

It was a Democratic Party that was behind the establishment of the United Nations with its various humanitarian agencies (such as UNICEF and the High Commissioner for Refugees). It was the Democratic Party that pushed for foreign aid, starting of course with the Marshall Plan. It was John Kennedy who created the Peace Corps.

And it was in liberal households that little baby boomers were exposed to their first guilt-inducing non sequitur: ``Finish your cereal. There are people starving in India.'' Which was not just a way to get you to clean your plate, but a reminder -- while you were enjoying yourself! -- of a social obligation to strangers out there.

That same spirit carried over a generation later when, upon arriving at her post as ambassador to the U.N., Madeleine Albright pledged ``to terminate the abominable injustices and conditions that still plague civilization.''

How times have changed.

Turns out, Humphrey was wrong. At the time, we really did not ``have the means to do it'' because we did not yet know how to banish poverty and hunger. Today we do.

The answer is not foreign aid, which is corrupting and often worse than useless. In many cases, it actually further impoverished an already poor country. Enriched urban elites bought luxury goods, while donated food and socialist controls drove down the local price of food, ruining the farmers on whom these subsistence economies had depended.

We now know that the secret to curing hunger and poverty is capitalism and free trade. We have seen that demonstrated irrefutably in East Asia, which has experienced the greatest alleviation of poverty in the history of man. In half a century, places like Hong Kong, Taiwan and South Korea have gone from subsistence to First World status. And now free markets and free trade are lifting tens of millions of people out of poverty in India and China.

And what has been the Democratic reaction to the prospect of fulfilling Humphrey's (and their party's) great dream? Fear and loathing. Democrats today thunder against the scourge of ``outsourcing'' -- American firms giving (what would otherwise be American) jobs to Indians and Chinese and other menacing foreigners.

The anti-outsourcing vogue is part of a larger assault on free trade, which until recently -- meaning the Clinton administration -- Democrats had supported. Remember Al Gore's televised debate with Ross Perot, in which Gore demolished Perot's anti-free-trade arguments? Which makes the recent Democratic assault on free trade so jarring, never more so than when John Edwards and John Kerry competed with each other before Super Tuesday to see who was against more trade agreements with more Third World countries.

Edwards boasted about his opposition to trade agreements with the Caribbean, Chile and Africa. Who would have thought we would hear a Democrat attacking his opponent for supporting a measure that would help millions of Africans to emerge from poverty?

Unions are a powerful Democratic constituency, and Democrats are genuinely trying to protect workers from foreign competition. But whatever the merits of the argument, the effect is startling: a radical reversal of the older liberal vision of America as helpmate for the poor and suffering of the world.

Interestingly, the Democrats have enough residue of this old vision that they cannot admit to having betrayed it. They pretend they are engaged in altruism. They say what they really want is for trade agreements to grant foreign workers the same labor and environmental standards that American workers enjoy. Why, this is super-altruism -- workers' rights carried far beyond our borders to the workers of the world.

Unfortunately, the ruse is transparent. Everyone understands that imposing U.S. standards on Mexican or Chinese factories is a way to make them noncompetitive. They lose their one comparative advantage: radically lower costs. The factories will shut down. And their workers, rather than being helped, will be sent back to the rural destitution they had fled in hope of a better future.

You can say, too bad. You can say, Americans count for more. What you cannot deny, however, is that the Democrats have given up the mantle of tribune of the world's poor -- precisely at a time when we have finally figured out how really to rescue them.”

“doesn't that seem odd? that you want people to suffer, to get laid off, to loose their life savings, to get kicked int othe streets?"
stratdewd
10:31:43 AM
04/11/04

Yes, it would seem odd, because that is the Republican position (excluding top 10% income bracket), and if we changed our views, you'd just call us a bunch of flip-floppers!”

“Strat, the whole doom and gloom trick is the only way the liberals can win. They don't even have a platform other than whatever Bush does, do the opposite. If things are going good they can't even stand on that platform and they will be forced to show their hand wich is simply the liberal agenda...more taxes, weaker defence, more forced PC tolerence...”

“correctamundo, el-nigalistic amigo...

good news for america is bad news for kerry.

here's more proof of our incredible economy...

us back in Hooverville. Like Rodney Dangerfield, this is the recovery that can't get no respect.

By nearly every objective measure, the U.S. economy is strong and getting stronger. Just look at the Misery Index, the measure created by the late economist Arthur Okun adding the rates of unemployment and inflation. This may not be the most sophisticated of metrics, but it does capture the two greatest threats to household wealth and security. And it's indicating that, comparisons to the 1990s' bubble years excepted, the U.S. economy is doing very well.

Today's unemployment rate of 5.7% is close to the level Bill Clinton boasted about as he sought re-election in 1996. Meanwhile, inflation has fallen by a full percentage point over the past eight years. As the nearby table shows, the economy compares favorably by re-election standards and President Bush's policies should be enjoying at least a modicum of respect.

Instead, the media have done a terrific job of convincing everybody that these are the worst of times. A poll conducted by the American Research Group in mid-March found that 44% of Americans believed that the country was still in a recession. That's passing strange when you consider that the last recession ended way back in November of 2001, and for the last two quarters of 2003 the U.S. economy grew at an annualized rate of 6.1%, the fastest in 20 years. Even more remarkable, the percentage of gloomsters was higher in March, when we now know 308,000 new jobs were being created, than over the previous three months.
The angst is also hard to fathom given that Americans are richer than they've ever been before. Household wealth recently hit $44.4 trillion, an all-time high. A big part of that is due to the stock market's 35% recovery last year, as well as rising property prices. OK, not everyone is convinced that the real estate market will hold up, and we're also concerned that price signals are warning that Federal Reserve policy has been too accommodating. Nevertheless, when a record 68.6% of households own their own homes, that should at least create a feeling of security.

And it's not just asset prices that are rising. Household income is up 4.1% year on year, driving even bigger gains in disposable income and consumption. Corporate profits also hit a record level in the fourth quarter of last year, and are expected to rise at a more than 15% clip in the first quarter of this year.

So why are Americans feeling so peevish? One possible explanation is that globalization has brought on increased job turnover, and the experience of losing a job, even if another one is found, can be profoundly unsettling. The only problem with this theory is that the "churn rate," the process of creative destruction by which declining industries shed workers and rising ones snap them up, has been falling since the middle of 2001.

Less Miserable
The "misery index" (inflation plus unemployment) in Presidential re-election years

Year Inf. Unemp. Misery
index
1976
Ford 5.8% 7.7% 13.5%
1980
Carter 13.5% 7.1% 20.6%
1984
Reagan 4.3% 7.5% 11.8%
1992
Bush I 3.0% 7.5% 10.5%
1996
Clinton 3.0% 5.4% 8.4%
2004
Bush II 2.0% 5.7%* 7.7%

*Unemployment rate in March 2004

Source: Club for Growth

That leaves the inescapable conclusion that the problem is perception. This pessimism is understandably fed by Democrats who want to retake the White House. But it's also flogged by a media that can't seem to admit that the real news of the past three years is how well the U.S. economy has weathered the shocks of a huge stock-market blowoff, September 11, business scandals and the long prelude to war in Iraq.

Contrast this to 2000, when nearly all economic coverage portrayed only sunshine even though the stock market plunge had begun in April of that year. The National Bureau of Economic Research now fixes the onset of recession at March 2001, meaning that the economy was heading down long before the Bush Administration took office.

This year's favorite bad news story has been the job market, especially outsourcing. Yet few bother to report that government data show that the U.S. is actually a net recipient of outsourcing jobs, and this surplus is widening. The growing trade in services helps the economy because American companies are market leaders in many high value-added niches.
For those who fear that the U.S. will somehow be stripped of high-paying jobs, consider how manufacturing, which was also supposedly in terminal decline in the 1980s, is again coming back. Early this month, an important factory index showed a high level of hiring, and output is at 20-year highs. High productivity growth has kept American manufacturers competitive, even in the face of low-wage competition.

Speaking of productivity growth, it's worth noting how little positive coverage this is attracting. Throughout the Reagan years when job creation was strong, the critics complained that productivity was lagging. Now that productivity is surging but employment has taken longer to bounce back than in other recoveries, the good news is again lost in the noise of lamentations.

Still and all, by November the American people will have had ample time to figure out the good news behind this smokescreen of negativity. Sooner or later, the Dangerfield economy is going to command some respect.



THE SKY IS FALLING! JIHAD BUSH!”

“Grads see brighter job prospects
By Barbara Hagenbaugh, USA TODAY
WASHINGTON —

Good news, Mom and Dad. Your soon-to-be college graduate might not have to move back home, after all.
After years of barely any activity, the job market for college seniors and graduate students finally appears to be picking up. Firms are interviewing more, giving more offers and even bumping up pay a bit.

"It is starting to pick up," says Carol Lyons, dean of career services at Northeastern University in Boston. "Not in any drastic way; in a slow, hopefully steady, way."

Andrew Ferguson, director of the career development center at the University of Richmond, calls this market more "normal," unlike the late 1990s. "It's actually been a decent year."

The same appears to be true for graduate students.

"This year is a definite improvement than earlier in this decade," says Dan Poston, director of the business school at the University of Washington in Seattle. The number of second-year MBAs at the University of Washington with job offers is up 20% from last year.

Megan Wasserman, 22, hasn't even gotten her diploma from Northeastern University but she has already started work as a production assistant at the Dr. Phil show, where the journalism student interned in the fall.

With enough credits to skip the final semester, Wasserman jumped at the chance for a full-time job with the show in Los Angeles when it was offered to her late last year.

"I'm one of the lucky ones," she says.

Grads finding jobs

Although there is little solid data about the current job market for college students, anecdotal evidence suggests things are getting better:

• Booz Allen Hamilton expects as many as 400 recent college graduates will start work in its government and technology group this fiscal year, which began April 1. Last year, 300 were hired, while the year before, 220 new college grads started work, says Judy Merkel, director of recruiting at the McLean, Va.-based consulting firm.

• The number of firms recruiting students at Georgetown University's business school is up 24% from a year ago. Half of second-year students have job offers, up from 40% at this time a year ago, says John Flato, director of MBA career management at the Washington, D.C., school.

• Enterprise Rent-A-Car plans to hire 6,500 college seniors for its management training program this year, up from about 6,000 last year.

• During the 2002-03 school year, 79 employers came to Southern Methodist University to interview students. This year to date, 124 firms have come to campus, a 57% increase.

SMU senior Joe Santos last week accepted a job with Comerica, a financial services firm in Detroit, after receiving four job offers. Santos, who is getting a degree in finance with a minor in psychology, even got a signing bonus.

"Last year I thought, 'Wow, it's going to be hard to find a job,' ... but it is far better than it was last year," the 22-year-old from Laredo, Texas, says.

Salaries higher

A sampling of universities across the country suggests hot areas this year are health care, accounting, defense, education, hospitality, insurance and even consulting, which had shown a large drop-off in earlier years.

Salaries are also up. More than half of college majors showed an increase in starting salary offers from a year ago in a recent study of career services officers by the National Association of Colleges and Employers.

Many career counselors also say they expect hiring to pick up in May, as more firms practice "just-in-time" hiring, rather than making offers months in advance, assuming the students will be needed down the road.

"Everybody is being cautious," says Leslye Ellison, director of career services at the University of New Mexico.

Julie Hochheiser, a senior at Boston University, is waiting until after graduation to try to find a job in the radio industry. "I tried to apply earlier this year, and I didn't get any responses," the 22-year-old from Potomac, Md., says.

Like other soon-to-be graduates, Hochheiser figures she will do another internship during the summer, even though she has already interned at National Public Radio, America Online, Disney and People magazine.

Such real-life experience is especially important now because, with the overall job market still fairly sluggish, college students are competing against young, laid-off workers with a few years of experience.

"Many of them are underemployed, and they are competing with (new) graduates for entry-level positions," Robert Johnson of the University of Dayton says.

Not only are students coming into the interview process with a fuller résumé than in years past, they also are preparing more, says Jason Farago, spokesman for money management firm Lord Abbett, which plans to surpass last year's hiring of 18 students. Students are studying up about the companies and asking good questions, he says. "The caliber of applicants has increased," he says. "In 2000, the question was, 'How big is my signing bonus going to be?' Now it's, 'Will I get a job?' "”

“Dazzled by data, economists see blue skies ahead
By Sue Kirchhoff, USA TODAY

WASHINGTON — Some economists are raising their forecasts for growth in the first quarter of 2004, based on surging consumer spending, rising factory orders and glimmers of a turnaround in the job market.
The better-than-expected performance is beginning to translate into rising consumer and business confidence. But it is also breeding concern in financial markets as traders worry the Federal Reserve will start raising interest rates in the summer or early fall to keep the economy from overheating.

A Commerce Department report Tuesday that March retail sales posted the biggest jump in a year added to the interest rate concerns, helping push the Dow Jones industrial average down 134.28 points to 10,381.28 and send yields higher on 10-year Treasury notes. The Fed has been holding rates at a low 1%. (Related story: Retail sales surge in March)

"The implications of these data are massive," says Steve Stanley, chief economist at Greenwich Capital Markets, also responding to the retail sales report.

"Off the top of my head, I would say that we just moved from 4% gross-domestic-product growth in (the first quarter of 2004) to something like 5%."

The numbers refer to economic growth on an annualized basis.

Brian Wesbury of Griffin Kubik Stephens & Thompson, a Chicago-based investment bank, predicted the government could report a 6% growth rate in the GDP, the broadest measure of goods and services produced in the USA. The GDP expanded at a 4.1% pace in the final months of 2003.

The government also reported Tuesday that factories and retailers built up inventories as they tried to keep pace with demand. The Federal Reserve Bank of Richmond (Va.) said factory shipments in the five states it oversees hit the highest level since 1999.

The figures come after the Labor Department reported April 2 that the economy created more than 300,000 jobs in March — a sign the "jobless recovery" may be easing. Ten-year note yields have risen nearly half a percentage point since that report.

The better numbers may be slowly filtering into consumer confidence. Gallup Briefing poll data Tuesday showed 34% of Americans think this is a good time to look for a high-quality job. While hardly a ringing endorsement of the economy, the measure has risen from just 19% last August.

A survey of 1,200 businesses by the PNC Financial Services Group found that 88% of business owners were optimistic about the next six months, with 21% planning to add full-time employees.”

“IMF warns of consequences from U.S. deficits
Global prosperity at risk if America doesn't control budget

The Associated Press msnbc.msn.com

The IMF released a new analysis that predicted if nothing is done to get control of the soaring U.S. deficits, it would shave global economic output by 4.2 percent by 2020 and reduce U.S. economic growth by 3.7 percent during the same period.

IMF economists said much of the adverse impact would occur because of increased borrowing demands in the United States to finance the budget deficit. This would drive up U.S. interest rates and interest rates in other countries as the global supply of available capital is reduced, they said.

"The rest of the world is affected seriously by the U.S. fiscal deficit," IMF chief economist Raghuram Rajan told reporters in a briefing on the new report.

The IMF's forecast that the U.S. budget deficit will be a significant drag on growth reflected what will occur if there is no improvement in the deficit, which the Bush administration projects will hit $521 billion this year, a record in dollar terms, and show little improvement in coming years.

President Bush submitted a budget to Congress this year which projects that he will be able to cut the deficit in half over the next five years, reducing it to a shortfall of $237 billion in 2009.

The IMF said that if Bush is able to accomplish that such a reduction in the budget deficit, it would significantly lower, but not eliminate the adverse effects from the deficit on the U.S. and global economies.

It saw a long-run impact from such a budget reduction as reducing global economic output by 2.55 percent, compared to a reduction of 4.2 percent under the worst-case scenario in which the deficit remains at the current record levels.

Under the Bush program to reduce the deficit, U.S. economic growth will be depressed by 1.88 percent in the long-term, compared to 3.68 percent under the more adverse deficit path.

However, the IMF said that if the United States decided to pursue more rapid deficit reduction, the adverse drag on growth would be greatly reduced to just 1.03 percent in the long-term in the United States and 1.47 percent worldwide.

"It would be good if there were stronger measures put in place to contain the deficit and that is what we are looking for," Rajan told reporters.

The IMF analysis of the economic impact of the U.S. budget deficits represented the latest in a series of reports in which the 184-nation international lending agency has urged stronger measures to get control of the deficit.

The IMF report conceded that the U.S. deficit, which reflected in part the impact of President Bush's tax cuts, was useful in helping the United States and the global economy recover from the adverse effects of a number of shocks such as the 2001 recession, the terrorist attacks and the bursting of the stock market bubble.

While interest rates have yet to show significant increases in spite of the large budget deficits, the IMF said it was only a matter of time before rates did start to rise, reflecting an improving economy, increased demand for credit by businesses and actions by the Federal Reserve to start raising interest rates to keep inflation under control.

The IMF said it was important to make as much progress as possible to get the deficit under control now, before rising interest rates greatly increase the cost of servicing government debt.

It also warned that the huge U.S. budget deficit could have other adverse impacts on the U.S. economy such as helping increase the country's foreign trade deficit and putting downward pressure on the U.S. dollar.

The IMF analysis of the U.S. budget deficit was contained in the analytical chapters of its World Economic Outlook, which will be released in full next week in advance of the spring meetings of the IMF and the World Bank.

The United States is likely to face criticism at those meetings from other countries about the need to reduce its budget deficit and trade deficit in order to lower risks to the global economy.”

“I wonder what percentage of that alleged deficit reduction occurs in the 5th year.”

“It's a top secret plan - the details are classified.”

“Snowdrifts of Debt

by Christopher Mayer

[Posted April 6, 2004]

The following article is from the April issue of The Free Market, available to members of the Mises Institute.

Debt is an institution in American government, long established and widespread. A cursory glance at debt statistics will quickly show that there has been a lull in the truth about debt, namely, that it cannot grow indefinitely at the rate at which it has been growing—at least not without a serious revaluation of the dollar, something we are already in the midst of seeing.

We know that the US government is the world's largest debtor with deficits feeding debts that pile on in increasingly larger numbers of numbing proportions. The current federal debt outstanding according to the Bureau of Public Debt stands at $6.9 trillion. [1] It was only in 1981 that the legal debt ceiling was $1 trillion. Then again, expecting debt ceilings to curb debt growth is sort of like trusting the fox with the henhouse.

Though it may be surprising to some, particularly those who believed in the supposed fiscal responsibility of the Clinton years, the public debt has risen without interruption since 1956. Incredibly, the $6.9 billion is conservative because if you add in all the off-balance sheet contingencies and guarantees (implicit and otherwise) you probably triple that figure, at least. This also excludes debts incurred by states, municipalities, etc.

Given the large amount of debt outstanding, it is easy to see that creditors are not likely to win any votes in deciding the future monetary policy of the country. Democratic hopefuls are not likely to rail against the effects of inflationary monetary policy in transferring wealth from creditors to debtors. The Bush Administration is not likely to lead a charge for hard money. No, the more likely path will be to perform some sort of con, like legalized counterfeiting—the modern form of the old art of repudiation.

Statecraft learned the art of repudiation a long time ago, at least at early as Solon, the lawgiver of Athens in 7th–6th centuries BC. Thomas Cahill, in his latest book, Sailing the Wine-Dark Sea, called Solon "a sort of Athenian Franklin D. Roosevelt." Indeed, both men led famous swindles on the citizens they governed.

It was Solon, according to the historian Plutarch, who lightened the debt burdens of Athenians by "raising the value of their money; for he made a pound, which before had passed for seventy-three drachmas, go for a hundred; so that, though the number of pieces in the payment was equal, the value was less; which proved a considerable benefit to those that were to discharge debts."

In fine Athenian fashion, and very much like our own modern age, treachery was given a pretty name. This was "softening the badness of a thing," as Plutarch called it, where harlots were mistresses and tributes were customs and a jail became a chamber. The Greeks called Solon's act a seisacthea, meaning a relief or a disencumberance. Plutarch cites a poem, credited to Solon where he "takes honor to himself that" "The mortgage-stones that covered her [Athens], by me, removed,—the land that was a slave is free . . ."

Solon forced a revaluation, in effect transferring wealth from creditors to debtors. The mortgage stones would make their marks again and again through the ages. Solon's financial alchemy would not be unique.

It was probably not Cahill's intent, but his linking Solon with FDR is most apropos in this respect, because FDR too pursued a similar policy of debt relief in the 1930s—by breaking contracts.

Faced with paying for the extravagance of the New Deal and also grappling with a severe crisis, Roosevelt chose the tried old hand of repudiation. (Note, we call it the "New Deal" when in fact it was basically "Old World Socialism," more "softening the badness of a thing.")

In 1933, the incoming Roosevelt administration assaulted the monetary order of the country, forcing it off the old gold standard, confiscating the gold of American citizens and putting it under the ownership of the Federal Reserve. They placed an embargo on the export of gold and devalued the dollar to $35 an ounce, where once an ounce of gold could be had for about $20.

The Roosevelt administration also brazenly stepped in and repudiated private and public contracts that required payment in gold. In other words, it had been customary for contracts to have gold clauses requiring payment in gold and thereby protecting the creditor. Roosevelt said that this was no longer legal and that if you had signed a contract stating that you promised to pay in gold, you no longer had to do so. A promise was not a promise anymore.

The anti-New Dealers, a spirited group still clinging to simple morals and personal liberty, fought the Roosevelt administration. History would later show they were part of a rearguard action. For the most part, they are written out of mainstream histories of the period. The victors do write history, after all.

This group was dealt a severe blow when the Supreme Court upheld the government's repudiation of private and public contracts to pay in gold, by the slimmest of majorities, 5–4. The court reasoned that these contracts interfered with the government's ability to control the supply of money—which they did and which was precisely the point of such clauses.

These actions were largely consistent with the goals of the New Deal. As economist Benjamin M. Anderson noted in his financial history, "the New Deal tax policy from the beginning has been more concerned with the redistribution of wealth than with raising revenue." All of these schemes simply robbed creditors and handed the gains to debtors.

With all the debt still saddled on the US, it is an irony that the rising stock market and happy GDP statistics have given most Americans the hope that things have turned and the boom is on. GDP is growing, we are told, among other things. The economy, many believe, has turned the proverbial corner and is now gingerly making its way forward once again. But what sort of prosperity is this?

Commenting in the 1930s, Albert Jay Nock noted the "the regular pre-election effort to start a boom in the stock market" and observed how optimistic Americans remained despite the large amount of debt and deficits. He wrote that "American have a strange notion that the ordinary laws of economics do not apply to them. So doubtless they will think they are prosperous if the boom starts, and that deficits and indebtedness are merely signs of how prosperous they are."

This false sense of prosperity has deceived many and has produced a fertile field for the institution of debt to grow—fertilized as it is by a fiat currency, a central bank, fractional reserve banking and other monetary interventions.

The laws of economics likewise never cease. These debts must be dealt with. They cannot grow indefinitely at their current rates. History tells us that these debts are not usually repaid as agreed. In a world of fiat currency, debt relief takes a subtler path than the overt aggression of a Roosevelt. Inflation (an expansion of the money supply) or legalized counterfeiting, is the modern spin on an old idea. The forces that led to these earlier swindles are converging now on a debt-laden America. From Solon, to Roosevelt, to Nixon's closing of the gold window, the tradition of fraud is evident. In today's world, all you need is a printing press. My guess is that Bernanke's printing press will be busy.
`”

“Senator Kerry sir, sorry to bother you but I'm afraid I have some disturbing news:

"Virtually every major sector of the economy added jobs in May, from retailing to construction industries. Particularly notable were 32,000 new hires in manufacturing -- a fourth straight monthly increase and the biggest for any month since August 1998 when 143,000 manufacturing jobs were created, the department said.

Nearly 1.2 million jobs have been added since the start of the year,"”

“32,000 new hires in manufacturing

McDonald's doing that well from the new 'lite' menu?

Nearly 1.2 million jobs have been added since the start of the year

and how many were 'guaranteed' this year?”

“Great news! If we keep up this pace, we can get back where we were in 2000 by the end of the decade.”

“That's a lotta McRibs!”

“Growing an economy
Edwin J. Feulner
June 3, 2004

Governing can be like gardening. If you do it correctly, the investment in time and energy is worthwhile -- even though it takes a while to reap the benefits.

The “garden” known as the U.S. economy is producing more jobs than ever before. Unemployment is 5.6 percent, below the average rates of the 1980s and 1990s. The Labor Department’s household survey shows that 2.2 million more Americans are working now than were working just two and a half years ago. An all-time record number of Americans, 138.6 million, now have jobs.

How is this like gardening? Simple. Nature will grow by itself, but plants grow better if a gardener weeds carefully and protects them from storms. Plants, of course, also suffer if subjected to overprotection, sloppy gardening or excess fertilizer.

We’re getting these good employment numbers now because of the sensible “supply-side” tax cuts enacted over the last three years. Those cuts have allowed businesses both large and small to plant even more seeds of growth. Lawmakers water the garden by keeping those cuts in place.

For example, last year lawmakers cut the tax rates on dividend and investment income almost in half. It’s now more profitable to save and invest -- and more people and businesses are doing so. Over time, that helps explain why we have a roaring economy and a steadily increasing stream of jobs.

Of course, job creation, like gardening, takes patience. You won’t see a healthy harvest a week, or even a month, after you plant the seeds. And so it has taken months for the tax cuts to work.

But, as in a garden, all that hard work can be undone quickly if the wrong policies are pursued. If you stop watering the plants, they wither and die. And if we suddenly raised taxes by repealing the tax cuts, the economic growth we’re enjoying (gross domestic product increased 4.2 percent in the first quarter of this year, 4.1 percent in the quarter before that and an amazing 8.2 percent in the quarter before that) also could go away.

Still, despite the fact we’re clearly on the right path, some liberal economists want to change course. On May 25, Princeton economics professor and New York Times columnist Paul Krugman tried to downplay our growth.

“The job forecast in the 2002 Economic Report of the President assumed that by 2004 the economy would have fully recovered from the 2001 recession,” Krugman wrote. “That recovery, according to the official projection, would lead to average payroll employment of 138 million this year -- 7 million more than the actual number. So we have a gap of 7 million jobs to make up.”

Well, as cited above, Krugman’s wrong about the jobs number. The household survey has our economy at 138 million jobs today -- right where we were supposed to be. He’s getting his number by using the less reliable payroll survey, which has been presenting a gloomier jobs picture for some time.

As far as blaming the president for a “jobs gap,” well, that assumes there’s a magic button somewhere that the president can push to instantly create jobs. There isn’t.

Now, the government could increase short-term employment by launching some make-work building programs or by increasing the size of the federal government even further. But this won’t create jobs. It’s sort of like diverting water from farmland and using it to make concrete. Yes, you’ll create a few jobs building a road. But you’ll lose all the produce that would have grown on the farm.

Our economy is strong and improving every month. The president can speed that growth by plucking out some of the weeds that still exist. That means repealing excessive government regulations and eliminating the double taxation of savings.

By staying the low-tax course and making the cuts permanent, the government can ensure a good jobs harvest -- and healthy growth -- for years to come”

“The news up here in the Motor City, is that we're adding some jobs in the up coming quarter. That's good news to an area that lagged behind the rest of the Nation in this so called recovery; I guess we're the last to get "trickled" on, but I digress....

1.2 is goot to hear. We only need, like Vi said, another 2 or so million to get back to normal. Then, let's see real recovery jobs!

We ain't outta this yet, no matter how much lipstick you Repubs try to put on this pig......”

“reread that article laqtis, you're quoting violennon's BAD numbers....

""Well, as cited above, Krugman’s wrong about the jobs number. The household survey has our economy at 138 million jobs today -- right where we were supposed to be. He’s getting his number by using the less reliable payroll survey, which has been presenting a gloomier jobs picture for some time.""”

“STRAT, darn you, quit spreading good, positive news around here. Twist your positive crap into something negative and depressing, if you search hard enough I know you can something to #&%!$ about. Frankly, I'm tard of your chirpy little attitude, Shirley you can find a weed under that pot of gold at the end of the rainbow. Shove the box of gold to the side and show me the friggin' weed, that's what I wanna see, man. You positive little punk.”

“oh, i'll show you the weed....AND QUIT CALLING ME SHIRLEY!”

“Productivity Soars at 3.8 Percent Annual Rate; Jobless Claims Drop Again

NewsMax.com Wires
Thursday, June 3, 2004

WASHINGTON – The productivity of America's workers in the opening quarter of 2004 grew at a brisk 3.8 percent annual rate, faster than previously thought. Labor costs moved up.
The increase in productivity, the amount an employee produces for every hour on the job, was up from an initial estimate of a 3.5 percent growth rate for the January-to-March quarter and exceeded the 2.5 percent pace registered in the final quarter of 2003, the Labor Department reported Thursday.

The new reading on first-quarter productivity was slightly better than the 3.7 percent growth rate that some economists were predicting. It marked the best showing since the third quarter of 2003.

Unit labor costs, meanwhile, rose at a 0.8 percent pace in the first quarter, up from the previous estimate of a 0.5 percent pace and following a 1.7 percent rate of increase in the fourth quarter. Unit labor costs is a measure of how much companies pay workers for every unit of output they produce. The recent rise in these costs, should they continue, could put pressure on companies' profit margins, analysts say.

In other economic news, initial claims for unemployment benefits fell last week by a seasonally adjusted 6,000 to 339,000, the Labor Department said in a second report that provided further evidence of an improving jobs market. Claims hit a high last year of 444,000 in the middle of April and have slowly drifted downward.

On the productivity front, efficiency gains are important to the economy's long-term vitality. They allow the economy to grow faster without igniting inflation. Companies can pay workers more without raising prices, which would eat up those wage gains.

With the economy on a solid growth track, increasing numbers of business analysts believe the Federal Reserve might increase short-term interest rates for the first time in more than four years at its next meeting June 29-30. The Fed's main interest rate has been at a 46-year low of 1 percent since last June.

The economy grew at a 4.4 percent rate in the first three months of this year and is expected to grow at a healthy but possibly slower pace in the April-to-June quarter, some analysts say. With companies feeling more confident about the staying power of the economic recovery, the jobs picture has been improving.

The nation's payrolls grew by a sizable 288,000 in April, on top of an even bigger gain of 337,000 in March, signs that the long awaited recovery in the jobs market was finally coming to pass. Some analysts are expecting employment to increase by a net 225,000 in May, which would provide further evidence of the labor market's improving health. The government releases the employment report for May on Friday.

In the productivity report, companies in the first quarter boosted output at a 5.4 percent rate, stronger than previously estimated and up from a 4.2 percent growth rate in the fourth quarter. Workers' hours, meanwhile, rose at a 1.5 percent rate, faster than first estimated and following a 1.6 percent growth rate in the fourth quarter.

During the economic slump, gains in productivity came at the expense of workers. Companies produced more with fewer employees. But with the economy rebounding, companies have slowly stepped up hiring and are boosting their efficiencies”

“I bet this kind of good news is making Violin turn purple and bust every string he owns. He 'frets' this kind of stuff.”

“he's probably sending me a virus as we speak....”

“strat - The payroll survey looks at about 400,000 businesses, the household survey looks at about 60,000 households. Even you can see which would be the larger sample.

The Bureau of Labor Statistics, the Congressional Budget Office the President’s Council of Economic Advisers and President Alan Greenspan are all in agreement on this.

Don't talk about stuff you don't understand - you end up making a fool of yourself.”