November 10, 2005
The Economy, Real and Imaginary
Robert Samuelson speculates in the WSJ (I can’t link to it because it is a premium page) about why what people say about the economy doesn’t correlate with what they do. They are spending money and making home improvements. Since mid-2003, the number of payroll jobs has increased by 4.2 million. The unemployment rate of 5% is low. People are spending money. Gains in housing have more than made up for losses in stocks, which helps explain why household net worth is higher than it was in 1999 and per capita income is up 9% from 1999 to 2004.
Despite all the good news, people are pessimistic. Samuelson thinks it is because of fond but misguided memory of the golden age of 1999. It was not that the economy was really much better by the numbers, but people felt better about it. In those pre 9/11 times, everything seemed to be working out. The business cycle was still out there and Osama bin Laden was planning his next round of attacks, but the pundits told us we had repealed the former and many people thought Osama bin Laden was a type dish made with chick peas and garlic.
People's perceptions change more erratically than the underlying realities of their lives. Couple this with lag times in economic policies and human proclivity to remember the "good times" of the past, and it is easy to see the sources of confusion and how politicians can exploit them.
The whole thing reminds me of Coleridge poem.
Put on your rose colored glasses and crank up the spin machine!
Posted by: JayJay Snowman at November 11, 2005 12:08 AMTranslation:
The hardships you are suffering are all in your head. The number of those living in poverty are NOT increasing. Your children HAVE health insurance. America will never have to pay its debt.
Posted by: Aldous at November 11, 2005 12:13 AMIn Xanadu did Kubla Jack
An econ bubble-dome decree,
Where Bush, the silver spooned son
ran markets measured wrong by man
down to a debt filled sea
Apologies to Sam. You write:
“Since mid-2003, the number of payroll jobs has increased by 4.2 million.”
That’s true. Unfortunately, Bush has been president since 2001. On a net basis, since the beginning of this administration the economy has added a net total of 1.2 million jobs.
The addition of 4.2 million jobs from the low point of the Bush administration sounds great, doesn’t it? That comes out to an average of, say, 150,000 jobs added per month- rounding in Bush’s favor. Fair enough?
To keep up with population growth, the economy should be adding 150,000 jobs per month.
Whoops! Ah, but such is the Bush recovery. It’s great for companies in certain industries. Exxon just recorded the most profitable quarter in history, $9.92 billion. Quite an achievement. Think about that- the most profitable quarter in history. Isn’t that amazing? And what a coincidence! The record is set by an oil company during the Bush administration.
Debt, rising interest rates, and their effect upon the housing market are playing out before our eyes, but with luck it will take time for the economic roullette Wheel of Fortune, or lack thereof, to cycle…
Posted by: phx8 at November 11, 2005 01:06 AMSince mid-2003, the number of payroll jobs has increased by 4.2 million.
On a net basis, since the beginning of this administration the economy has added a net total of 1.2 million jobs.
The question is not how many jobs were created, but rather how many jobs were created that paid a living wage? I think you will find that millions of high paying jobs in the tech and manufacturing sectors were traded for low paying jobs in the “Wal-mart” sector.
Anyone who says that the poor can not invest money is fooling themselves.
Not a bad thought but, don’t the Repubs in Washington give enough of our money away to wealthy companies, without us turning our money over to them willingly. Maybe these companies should have to pay dividends to the tax payers on their profits. Even if they did our return wouldn’t come close to the $14.5 billion in new tax payer money given to the energy industry in the recent energy bill.
Posted by: JayJay Snowman at November 11, 2005 03:01 AMHey Jack, of the 1.2 million jobs the Bush economy has created, how many are government jobs? I remember before the elections last year that Bush’s record breaking expansion of the federal government was providing more public sector govt bureaucracy jobs than private sector jobs.
Couple this with lag times in economic policies and human proclivity to remember the “good times” of the past…
Isn’t it odd that there aren’t any Republican “good times”? No one looks back fondly on the Hoover depression or the Nixon/Ford stagflation.
Posted by: American Pundit at November 11, 2005 08:13 AMJack:
You’ve once again provided evidence that partisans on the left will never find the silver lining, because they are always looking for the cloud.
JayJay, you should go into FactCheck.org to find out what they say about the jobs being created. They show that the average pay stats went UP, which debunks the idea that only lower wage jobs were created. Read the article—I’ll leave it to you to find it in the FactCheck archives should you want to educate yourself.
I find it interesting that the left won’t admit to the economy falling at the end of Clinton’s term BEFORE Bush took office. Remember when it was their opinion that Bush was “talking down” the economy—now they remember the economy as having been good. The left then called it the Bush recession, then called it a jobless recovery, then admitted that jobs were in fact created, but they were not good jobs……
Such an endless spin of despair and hopelessness. Its easy once you put your head in the clouds to miss the silver lining. But it still makes you dead wrong.
Posted by: joebagodonuts at November 11, 2005 08:30 AMIt seems to me that this points out the fallacy, and even bias, of the current round of polls supposedly showing that everything is going down - the economy, President Bush’s approval ratings, the view of the US in the rest of the world, the sky…..
Posted by: SEDeuce at November 11, 2005 09:17 AMpundit. Or the runaway interest rates of the Carter administration? Anybody remember Jimmy Carter standing before the nation telling Americans the ‘good times’ were over. America was gonna have to live a different lifestyle? I sure do. Outsourcing of American jobs also began under the Carter administration. Textile mills closed in the south by the hundreds as jobs went to Mexico then Asia. The jobs didn’t just suddenly go ‘away’ after 9/11. They’ve been going away for the last 30 yrs.
Posted by: pige at November 11, 2005 09:55 AMYou’ve once again provided evidence that partisans on the left will never find the silver lining, because they are always looking for the cloud.
Yes, during a Republican administration, the Dems are as blind to the “silver lining” as you are to the “cloud”. They both exist, but good luck trying to get either party to admit it.
Posted by: Rob Cottrell at November 11, 2005 09:58 AMAP
I remember the Reagan times post 1982 very fondly AND that was a sea change in the economy when it went up after years of malaise. Since 2003 we have been living in very good times. That is the whole point of this article.
As I have written on many occasions, I believe that presidents get too much credit or blame for the economy. Things just take a long time to happen, so even when a policy is right it takes years to be effective. It is the classic systems problem of delayed and incomplete feedback.
Also as I have often written, I think Clinton did a good job. But he inherited an economy on its way up and he left an economy on the way down.
Think of an ordinary day. The sun is the warmest at 12 noon, but you don’t feel that until about 2 pm. If the administration was a day, Clinton arrived on the scene at about 12:15 and left around 3:00.
Beyond that, many of the things that worked so well in the 1990s were put in place a decade before. The great restructuring of U.S. industry was largely complete by the 1990s. The Internet was ready to go. The Cold War had ended. The baby boom was entering its most productive years.
It is a myth that Clinton made all this happen. In fact it is a myth that any president COULD make this happen. When you start at 12:15, the day seems warm.
Anyway, bottom line is that these are good times. People know that about their own situations. That is why they do what they do. But they don’t know that about the whole economy. That is why they say what they do.
The good news is that the bad news ain’t.
It is interesting Jack, that you have omitted the immigration numbers both legal and illegal, which represent the bulk of the recipients of those jobs created.
About 12 million people have been added to our population since 2000, Jack. But, only 4.2 million new jobs. Given the difference of 7.8 million as dependents of the 4.2 million new job holders, and what do you get? Unemployment that remains at about 5%, given retirements and non-immigrant new work force entrants being about equal.
Then of course, there is the black market. All those independent contractors who work for cash which is never recorded as income like landscaping and gardening services for example and maids and nannies who are paid under the table by the upper middle class. These constitute a huge drain on our nation’s resources in lost taxed revenue, and these employment numbers are not added to the rolls nor are their substandard wages.
Add it all up, and what we have is a government turning a blind eye to millions of jobs being held in this country which are not recorded, and whose incomes are not taxed, while honest American workers foot the bill for the infrastructure and and benefits of this invisible immigration and work force.
And why is government turning a blind eye? Because Republicans don’t want to step on their constituent’s toes on the issue of cheaper labor, and Democrats don’t want to offend constituents who are working to bring their illegal relatives into the country. Illegal immigrants cross our borders every month, Jack. They are not crossing for a sight seeing tour, Jack. They are crossing for money, your money, my money, and every legal American taxpayer’s and wage earner’s money.
And they are putting a huge downward pressure on American wages, but because it is all off the books, (convenient for this Administration), the statistics aren’t there to prove in hard numbers just how much downward pressure on American wages is taking place.
USGovInfo reports in California alone illegal immigration costs the state 10.5 billion dollars a year. Add New Mexico, Texas, Arizona, and the Canadian border, and that rises dramatically.
According to Bear Stearns analysts, (PDF & PW access) Robert Justich and Betty Ng:
* The illegal alien population of the U.S. is about 20 million - roughly the population of New York State.
* The report asserts that there are between 12 and 15 million jobs in the U.S. currently held by illegal aliens, or about 8 percent of the work force.
* Moreover, between 4 and 6 million jobs have shifted to the underground economy since 1990. These are not “jobs Americans won’t do, but rather jobs Americans used to do.“
* “On the revenue side, the United States may be foregoing $35 billion a year in income tax collections because of the number of jobs that are now off the books.”
* “We estimate that approximately 5 million illegal workers are collecting wages on a cash basis and are avoiding income taxes.”
* “The United States is simply hooked on cheap, illegal workers and deferring the costs of providing public services to these quasi-Americans†conclude Justich and Ng.
David
You are supporting the idea that things are better than people think.
We we need not apologize for a 5% unemployment rate. If - as you say - there are so many people working off the books, we must be approaching full employment.
The immigration issue is one for another post. Suffice to say, this is not a new problem or one created by Bush.
One more thing, more related to other posts. Those 4.2 million jobs the U.S. created since 2003 is about the same as the number of jobs the Europeans have created since the 1970s. I guess our version of the free market is a better job creator.
Jack said:
“As I have written on many occasions, I believe that presidents get too much credit or blame for the economy. Things just take a long time to happen, so even when a policy is right it takes years to be effective. It is the classic systems problem of delayed and incomplete feedback.”
I would tend to agree with this statement. It takes more than a president to improve or devestate an economy. Even when they do it may take several years to see the result of some of the policies.
However, I do believe that policies set by the president AND congress can affect the economy. The time frame would depend on the policies. My biggest problem with this administration and this congress is their spending. We have borrowed more money during one president’s administration that the previous 42 presidents combined. That is OUTRAGEOUS!
Many say debt doesn’t matter. That depends on if the debt is productive and how much debt one is talking about. PRODUCTIVE debt is money borrowed that will be used to make more money. The AMOUNT of debt will affect the interest rate one obtains on future borrowed money. Think about it, if a company has a huge debt and they go to a bank or private investor to finance more borrowing the interest they pay will be much higher because, as the debt increases, the likelyhood of default also does. Since our debt is increasingly financed by foreign countries these countries will ultimalely be requiring a higher return on the T-bills they invest in. It’s simple economics.
What do higher interest do to our economic growth? What do they do to the prime rate? How is the prime rate interest reflected in everyday loans like mortgage, auto, personal, or credit cards?
I know the answers to these questions. If others don’t I would urge them to look into those answers before they justify our continued mounting federal debt.
Posted by: Tom L at November 11, 2005 11:09 AMReading all the comments form the left side just shows their hatered for any one that doesn’t agree with them.
Of course they’re not going to admitt that the economy was doing great in the 80’s. There was a recession in the early 90’s but the economy was still good.
But the Democratic Presidential Canidate kept harping on ‘The worst economy in 50 years’. And the liberial press chided right in with him. Soon people started believing it. That won him the election.
Then all of asudden it was the best economy EVER. And the liberial press chided right in there. And people started believing it.
Fact is there wasn’t much change in anything except that the economy kept growing.
The general public has a tendecy to believe whatever they’re told when it keeps getting told, and told, and told……………………
The liberial media today is harping on the economy is going down the tubes. And the public is buying it. Because they keep hearing it and when the media does give someone that says the economy is doing good any air time they down play the story.
If the economy is doing so bad why is it I have to keep hiring new employees to keep up with orders? Why are housing starts up?
Do Presidents matter for the economy. Oh yes, they do, they most certainly do. For example, Bush chose to invade Iraq. Consider the economic consequences of this decision alone- over $200 billion squandered already.
But there’s more to it than that. Remember Jimmy Carter? Most conservatives think Carter was a terrible president. Yet Jimmy Carter created over 10 million jobs in four years. Bush has created 1.2 million jobs in five years.
I figure that statistic alone is enough to cause some conservatives to crash mentally, see a blue screen of death, following by a slooow, twitchy reboot. Then come the posts arguing with ‘them.’ Unlike me, ‘they’ never respond, and do not bring up those terrible, undeniable statistics.
But one item Carter and Bush do share, and that’s a depressing effect upon the economy. Carter publicly called it a ‘malaise.’ Bush depresses by constantly instilling fear.
Posted by: phx8 at November 11, 2005 11:23 AMTom L
The deficit is a problem and we need to cut spending. The measure, however, is the debt in relation to the GDP.
We might suffer higher interest rates in the future, but we are not suffering them now BTW.
Phx8
Even if you want to give the president credit or blame there is LAG TIME. Even the simplest things like budgets have a lag time of at least a year. The government’s fiscal year starts and ends in October. The new president takes office in January and lives with his predecessor’s priorities in a real sense. It also takes a while for even the most direct policies to have any effect. The lag time is at least two years. So look at the Carter figures as 1978-1982. Clinton gets credit for the economy until 2002 (and you can blame Bush I until 1994)
Clinton (and Carter too) were lucky to come into a growing economy and leave when it was in trouble. Carter got the blame he deserved.
So my response to those statistics is that they miss the target. When the Reagan policies began to take hold after 1982, there was morning in America after the Carter malaise. The Bush economy that started to take hold has been good. It has been great since the targeted tax cuts of 2003.
Remember Reagan’s “are you better off today than yesterday?”. I make more money, I have more stuff, my kids are in college (albeit with student loans to pay off), I employ 5 people making a good wage - better than most in their industry - so yes, I am better off today. Is it because of President Bush? Not necessarily. Is it due to President Clinton? Probably not. Congress? No, they just keep increasing my tax burden. Iraq? No. Israel? No. Europe? Not likely. I’m better off because I work hard. I’m better off because my children are doing better than I did at their age. I’m better off because I live in America and not some god-forsaken third world county. Do we have poor people? Yep. But even they are better off than most people in Africa. They have more food, clothing and healthcare that 90% of Ethiopians. I guess what I’m getting at is that we are better off NO MATTER HOW BAD the media and the politians say just because we are Americans. If people want jobs, they are out there. It’s just that some people think they are too good for the jobs available. See—- even they think they are better off than some.
Posted by: Ilsa at November 11, 2005 12:00 PM4 million additional people have joined the poverty ranks since Bush took office; there are now hundreds of thousands of children without insurance; wages are not keeping up to costs; the number of jobs “increased” in the Bush administration has not kept up with population growth.
The top 1-2% of “earners” are doing quite well…regular workers, not so hot. ARe people buying houses at a record rate? Yes, but that has already cooled as housing costs soared and mortage rates have increased. That bubble is leaking air rapidly.
Posted by: Lynne at November 11, 2005 12:21 PMJack,
Lag time? It’s 2005.
As a rule of thumb, fiscal policies effect the economy in @ 6 months.
Meanwhile, the stock market, which is a leading indicator, remains at levels roughly the same as when Bush took office.
Posted by: phx8 at November 11, 2005 12:53 PMReading all the comments form the left side just shows their hatered for any one that doesn’t agree with them.
Typical Republican response. When things don’t go your way start name calling.
JayJay, you should go into FactCheck.org to find out what they say about the jobs being created. They show that the average pay stats went UP, which debunks the idea that only lower wage jobs were created. Read the article—I’ll leave it to you to find it in the FactCheck archives should you want to educate yourself.joebagodonuts
I decided to take your advice and educamate myself. Here is what I found:
A new study from the University of California at Berkeley, using the most detailed classification of jobs and distribution of wages so far found that, since 2001, job categories that are growing pay an average of 10 percent to 12 percent less than jobs categories that are shrinking. A new full-time position would therefore pay about $4,000 a year less than one of the jobs that were lost.
A June study by USA TODAY and Economy.com concluded that lower-wage jobs were growing faster than higher-wage jobs, based on analysis of lower and higher-paying industries. Morgan Stanley’s chief global economist, Stephen Roach, drew similar conclusions in his July study by industry.
t’s possible, however, that generally lower-paying industries, such as the restaurant industry, are adding more higher paying jobs such as chefs and managers, researchers at FactCheck.org noted. In a July study, FactCheck.org used new Bureau of Labor Statistics data to conclude that a more detailed breakdown of occupations within industries suggests that job quality is actually increasing.The Economic Policy Institute countered by using the same BLS data to arrive at the opposite conclusion. The FactCheck.org study forgot to weight its sectors by their contribution to overall employment, the EPI pointed out.
Dube’s study attempted to overcome each of these flaws and anticipate others. He looked at both occupations and industries to create 440 job categories. Rather than just use average earnings, he looked at the entire distribution of jobs and the wages they pay. And to back up the findings, Dube showed his conclusions were consistent over various time periods within the nearly four-year scope of the study. The result, he said, is a clear picture of a wage gap between growing and shrinking jobs.“The good news is that finally there seems to be some growth in jobs at the middle,” Dube said. “But the bad news is that growth in jobs in the bottom third outpaces those in the middle by roughly two to one. The other bad news is that finally middle-wage jobs are growing, but that’s typically at the expense of higher-paying jobs.”
After all of the slicing and dicing of employment data, one conclusion is incontrovertible: this economy, despite strong economic growth, is still not creating a sufficient number of jobs, high paying or otherwise.
Of 290,000 private-sector jobs created since April 2003, most - 215,000 - have been temporary positions, according to last week’s employment figures. Private-sector employment would have fallen last month without the creation of 32,000 temporary jobs in the professional and business services sector.
About 4.3m Americans are also forced to accept part-time positions because they have failed to find full-time work - 1m higher than the January 2000 number.
“It is slightly depressing to think that even the poor job-creation figures we have had have been flattered by temporary positions,” says Drew Matus, US economist at Lehman Brothers. “A lot of what we have been getting is lower-quality jobs.”
The prevalence of such stop-gap job hiring casts doubt on President George W. Bush’s ability to benefit from an economic feel-good factor. It also helps explain why wage growth is only just managing to keep pace with inflation, at about 2 per cent.
Companies are becoming more aware of the attractions of temporary staff, says John Challenger, chief executive of Challenger, Gray and Christmas, an agency that helps find new jobs for dismissed workers.Technology has made it easier for companies to recruit quickly when they urgently need to expand output, he says. “Companies are trying to think of staff more like inventory, keeping things to a minimum.”
Some economists even suspect that Mr Bush’s tax incentives for business investment, which allow for 50 per cent depreciation in the first year on most business equipment, may have temporarily helped tilt the balance in favour of spending on equipment instead of new permanent workers.
Ok joebagodonuts, now that I am all educated, and your suggested source was discounted, I can answer my own question: Yes, jobs from the high paying sectors are going to the low paying “Wal-mart” sector.
Phx8
Yes it is 2005 and times are good.
Six months fiscal stimulation for money but there are various structural decisions that take much longer. It takes several months from the time of an up turn to the time when you decide to hire to the time when you actually get someone on board. You can’t build a new plant in six months. You can’t even plan a new plant in six months.
Besides, Bush’s policies did not start on January 2001. Given the fiscal year and the fact that policies take at least a little time to be formulated, even your six months takes us into 2002. There is just no way that Bush could have been responsible for most of those job losses and stock market declines, no matter what he did or didn’t do. No time.
I am not blaming Clinton either. The declines started in 2000 when he was still firmly in office, but the declines were worldwide. If you had a diversified U.S. portfolio the last year of Clinton, you lost nearly 10%. But if you had a diversified international portfolio, you lost about 15%. This was a world wide problem. You cannot blame Clinton and you sure cannot blame Bush.
But now that the economy is good again, it is funny that people are still trying to blame Bush. For what? Being right?
In Xanadu did Kubla Jack An econ bubble-dome decree, Where Bush, the silver spooned son ran markets measured wrong by man down to a debt filled sea
Points for creativity, phx8!
Truth is, arguments can legitimately be made that the economy is better than many think and that it’s also worse than the blinkered analysts know. One way of looking at the state of the economy can be found here and here. Wage growth isn’t keeping up with inflation, which makes people feel they’re losing ground. Meanwhile, they’re losing healthcare benefits or paying a lot more out of pocket for those benefits (largely due to our insanely inefficient system), which makes them feel less secure. Also, their jobs don’t feel secure, and they don’t feel physically safe these days, either, thanks to terrorism, pandemic threats, etc. Their productivity is way up in recent years, but they’re not seeing the benefits of this in their paychecks (yet).
It all adds up to the blues. Yet, we’re still a vibrant and entrepreneurial culture for now. Things could be a lot worse. But we’re getting quagmired by deficits (government irresponsibility), a lack of personal savings (individual irresponsibility), and a lack of social investments in the right areas (just dumb government hamstrung by special interests, ideology and pork). We need to do better - and pretty quickly.
Posted by: Reed Sanders at November 11, 2005 02:40 PMJack,
You said: “We might suffer higher interest rates in the future, but we are not suffering them now BTW.”
Here’s a trend of the 91 day T-bill interest rates at auction:
1/04 .939%
3/04 .957%
4/04 .945%
5/04 1.001&
6/04 1.251%
7/04 1.344%
8/04 1.49%
9/04 1.663%
10/01 1.716%
11/04 1.987%
12/04 2.253%
.
.
.
11/05 3.983%
I agree, interest rates are still low, historically speaking. What trend do you see going on with this data?
Posted by: Tom L at November 11, 2005 03:27 PMCheney said “Reagan proved deficits don’t matter.”
But, if your spend a few trillion dollars, even a chimp should have been able to make things better than “just the same.”
As someone once said, “there’s a sucker born every minute” and his name is Bush supporter
It’s all too revealing as to why this column wants to spin things as being so rosy.
Yes, hold on for a moment.
Let me put on my rose colored glasses, put on my headphones, and some ENYA, take a Valium, and I might just fall for it.
Sure, you can paint a really rosy picture by borrowing, spending, borrowing more, spending more, continuously.
Sure, you might even make other countries think you’re rich.
But, there will be consequences, eventually.
The federal government better get some fiscal responsibility soon, or it may not matter what they do.
It’s amazing how government ignores the National Debt (now $8 Trillion, and will soon jump to $10 Trillion)
Does anyone understand how long it will take to pay down the $8 Trillion National Debt?
If we started 01-Jan-2006 to:
[1] stop borrowing $1 billion per day (used to pay the $1 billion per day for interest alone on the National Debt),
[2] and, started paying $1.003 billion per day (i.e. the payments must must exceed the daily interest, or the debt grows ever larger forever), it would take this long to pay down the $8 Trillion National Debt:
_____127 YEARS____ .
Look at the years column in the chart (i.e. click on 127 YEARS above). It would take until the YEAR: 2133 .
And, check out the accumalative interest on the Debt. It’s a staggering $38 Trillion (in 2005 dollars). And, that’s only if the interest rate doesn’t increase. If it jumps a point (from 4.5% to 5.5%), the Debt payments must increase, and the total interest will increase, and the time to pay it off could increase.
Hell, that’s not just dumping debt on our children, but their children, and their childrens’ children, and their childrens’ childrens’ children.
So, just based on track record, who thinks our fiscally and morally bankrupt government has the discipline to even attempt to do that, much less actually ever do it (consistently, for 127 years)?
Countries and others investing in the National Debt may soon (if not already) start becoming a little nervous about that much debt, when you consider the fiscal irresponsibility of the federal government that continues to grow government to nightmare proportions, and has also grown the National Debt for 45 consecutive years (and almost every year for the last 60 years).
What if those investing in the National Debt start getting nervous, and stop loaning the U.$. $1 billion per day?
What if the nervous investors start dumping U.$. currency for other more stable currencies?
The U.$. can not default on the loan.
That would be more disastrous.
What will the federal government do?
They will do the only thing they can do.
They will print more money.
That’s historically, what many fiscally troubled governments do. If the worst happens, you may need a wheel-barrow full of U.$. currency to just buy a loaf of bread, or a truck load for a gallon of gasoline.
Many economists think we can grow enough, immigrate enough tax payers, tax more, and print enough money to slightly bump up inflation, to shrink the debt. But, with globalization, increasing competition overseas, continuously falling manufacturing in the U.S., the falling dollar, a U.S. population with $40 Trillion in personal debt already, and an aging population (77 million baby boomers earning less, paying less taxes, spending less) drawing upon already troubled Social Security and Medicare systems, that type of growth, like seen after World War II is unlikely.
We need fiscal responsibility now, before the consequences of so much fiscal and moral bankruptcy, and our many pressing problems, combined, and growing worse every day, culminate to create a significant economic down-turn (or worse).
The federal government will not reform itself.
The People must now become responsible, and do their part, and do the one simple thing voters should have been doing all along, that is simple, easy, inexpensive, non-partisan, and provides the peaceful force required to incent government to be responsible too.
Vote Out Incumbents, Repeatedly, Every Election, Until they become transparent, responsible, and accountable, and begin to address the serious problems that threaten the future and security of the nation.
For starters, how about something simple they can do immediately. How about ONE PURPOSE PER BILL, so that we can see whose voting for what. With 10,000 page BILLs laden with pork-barrel, graft, and waste, no one knows why anyone voted for or against a BILL.
How about that incumbents ?
Why can’t incumbents do that one simple thing?
Refusing to do it is revealing.
The incumbents are corrupt, and need to go.
Ron Brown,
You’re right. Some stats look good now.
They looked good in 1999 too.
But, for it to last, requires fiscal responsibility.
No one knows for sure, but I’m predicting a severe down-turn in 2009. Some respected economists (who have called it accurately before) are predicting a severe down-turn in 2010.
And some are predicting it will last for a decade.
The real problem is not just one problem.
It’s all of these problems at the same time.
But, I know you realize this.
You make a valid point.
We’re not suffering terribly now.
In fact, I’ve seen a rise in hiring in some areas.
False claims (making like conditions are worse than they are) discredit the real problem.
The time lag is what fools everyone.
But there will be consequences, eventually.
There is cause and effect.
Someone said we’d never have to pay of the debt ?
That may be more true than many realize.
You can’t get blood out of a turnip.
The U.$. may indeed perpetrate one of the biggest ponzi schemes ever, on the world (and all those countries investing in our National Debt).
But, watch what happens when some inflation starts to set in, and the interest per day reaches $2 billion.
What do you think will happen then ?
But, you know, these things take decades to transpire. What on president does often has no impact until decades later.
But, we’ve had 45 years of fiscal irresponsibility, and it may be catching up to us soon, when all the many other issues are also take into account.
So, it doesn’t ring true to say things are awful now.
They are not bad right this moment.
But, will that last?
That’s the real question.
I don’t think so.
Not unless we immediately cut, waste, pork-barrel, corruption, and ignoring pressing problems.
The other thing is this.
Think how much better things could be, if we made government more responsible and accountable.
I think many solutions to many problems would almost majically start falling into place.
But, as it is now, problems go ignored, for fear of risking re-eletion by tackling problems and tough issues.
_________________________________
P.S. Ron, could you please send me an E-Mail me (d.a.n@comcast.net)? Thanks!
Truth is, the perceived state of the economy has nothing to do with what the numbers crunchers have to say, on the left nor the right.
But has everything to do with real world experience, and what is going on around us. I live in the Motor City, where the auto industry is aggressively trying to cut wages and slash benefits. Some are trying to cut wages from $27 p/h to just $10 p/h. A 63% cut in wages. Plus they want concessions in benefits. While the company pushing for these concessions, Delphi, is in bankruptcy, other auto manufacturers not in bankruptcy are already asking for large concessions from their workers. This stands in stark contrast to the Auto industry boom of the Clinton years.
This is just one example of the economy in my area, another is the bankruptcy of Northwest airlines, Detroit Metro is home to Northwest’s main hub.
Now, I know Republicans will try to spin the hell out of this and blame it all on Governor Jennifer Granholm, a Democrat. But the point is that we can point to all the facts and figures we want, but the only thing that matters is our personal experience.
One of the reasons (just one, there are many) that I am a Democrat is because of my personal experience. Was I better off in the Clinton years than I was in the Papa Bush years? You bet, much better off. Am I better off today than I was in the Clinton years? No. No better, no worse. Just stagnant, and I consider myself to be lucky to be in that category. Many are not staying stagnant, but losing, as I pointed out above.
d.a.n.
I realize what you are saying about the irresponsibilty of government. The way they’re doing thing’s is only going to make things get bad. And it could be real soon.
If you or I ran our finances the way the government runs it’s, we’d be bankrupt in very short order. Of course with all the shady financeing it’s doing you or me would be in prison if we tried it.
Actually, Jay, it is the other way around.
When people are asked about their personal prospects (their own experience) they are optimistic. When they are asked about the general economy (the perception they get from the media and the pundits) they are pessimistic.
That is the paradox.
Most people are a lot like you (and me) they are not much better or worse off than they were in 1999. If you own a home, your net worth is a little higher, but that doesn’t make much difference in your daily life. When you consider the recession that started in 2000 and the terror attacks of 2001, and everything else that happened that is actually surprising.
Posted by: Jack at November 11, 2005 04:46 PMphx8
Exxon just recorded the most profitable quarter in history, $9.92 billion. Quite an achievement. Think about that- the most profitable quarter in history. Isn’t that amazing? And what a coincidence! The record is set by an oil company during the Bush administration.
I assume you ride your bike to work and don’t buy bottled water.
Gasoline $2.01 Gallon Anoka MN low
$2.19 Anoka MN High
Low taxes in MN
Bottled water 12 12oz. Dasani $3.98 or $3.52 Gal.
1 16oz from machine 75 cents or $6.00 gal
And it could be real soon.Yes, no one knows for sure, but it could be relatively soon. What leads some people to think it doesn’t matter is because of the very long lag time. It’s the culmination of many many things, and being ignored, for decades, and bad policies for a long long time, that eventually have an effect. There is cause and effect. It’s just that it takes many decades usually, and can be felt for 40 or 50 or more years later. What we’re doing now will be felt by our children, and their children, and longer perhaps. Also, it’s an attitude. It’s the character of the nation. We’re not the same as in 1940. That’s also a large part of it. And, I believe in cycles too. Just like stock markets, the seasons, and cycles of life. History shows us it repeats itself often. It would be nice, for once, if we didn’t have to repeat history. I’m holding out hope that we can learn to skip the hard lesson (again). But, our federal government is so entrenched in partisan warfare, so consumed by raising campaign money, votin’ for pork-barrel & graft, and so beholding to their big money donors (their puppeteers), that they ignore The People, and our many serious problems. The entire problem has two major parts: [1] Incumbents, that can’t be unseated, that are irresponsible and unaccontable, [2] and The People that allow it through complacency, and/or apathy, and/or ignorance, and/or seduction into the petty partisan warfare warfare (cleverly) fueled by the incumbents, who essentially just take turns threatening the future and security of the nation.
Lastly, though…this problem will resolve itself eventually, one way or another. The question is, will it be the smart, peaceful, quick, easy, non-partisan, least painful, responsilbe way?
Or, will it be the hard, painful way?
What harrm can it do to hope for the least painful way ?
You know, that even among some Republicans, they are starting to think about the budget again. Some have concerns, and it’s getting more attention now. Politicians know they can’t keep doing what they’re doing. The problem is, they don’t have the discipline to make any reform happen. They never will.
But, the voters could peacefully force that reform, by simply doing the one thing they were supposed to be doing all along.
Vote out the irresponsible incumbents.
There’s a reason those seats are so coveted.
That reason needs to be eliminated.
Voting out incumbents eliminates that problem.
Government shouldn’t be For Sale.
Quick question. Why has every post that I have made in the past four days been deleted over night? I know the moderators and owner of this site will not respond to this. Just wondering if any of the members have any idea?Thank you in advance
Eric L. Goempel
thegoempels@yahoo.com
Were you banned ? That would be the reason. Posted by: d.a.n at November 11, 2005 05:23 PM
Eric
I don’t know. I write the post and I never taken down any posts from anybody. Try again.
Posted by: Jack at November 11, 2005 05:59 PMMore people are working, but the majority of them are working on minimum wage jobs. There are those who have given up looking for work and have dropped off of our statistics. Job services where I live and the state beside mine meet you at the door to tell you not to bother looking for jobs because there are none there. If your applications are thrown away, who is going to know that you applied.
This is also not including the overweight among us who are denied even an application for a job. These people make up 60+% of our population. The cost of work is also very high with insurances for Blue cross Blue shield averaging $250.00/month. Some male and female spouses are opting to stay home instead of looking for work and are living off of their spouse or partner. Check this out on Genocide of the American Woman
http://www.geocities.com/gwenbo_2001/genocide.html
I don’t know, Eric. What kinds of things do you write.
Posted by: Jack at November 11, 2005 07:24 PMInteresting link, Gwenbo. But if 30% of American women are dying of AIDS, I expect someone would have noticed by now.
Posted by: Jack at November 11, 2005 07:27 PMGeorge,
Your point? Which would you rather do without? Water or oil?
And since when did Dasani or its parent company make $9.92 billion in one quarter? In fact, George, make you a bet. I will bet you cannot name any three corporations (outside the energy sector) which make as much as Exxon made in one quarter.
Jack,
Short of time- but in a nutshell, I follow interest rates when it comes to the economy. Once upon a time I was Series 3 & Series 7 licensed, and did thousands of transactions, including a lot of bond trading. It was really interesting- margining 30 year zero coupon treasuries on spec, and hedging the bet. What I learned is that, while stocks are interesting, bonds are where its at… just a little background on my perspective.
Jack, I can make my family live high on the hog too if I load up my credit cards, and take out as many loans as I can. This is exactly what this administration and Congress have done. Yes, the economy is in good shape today. But, my daughter is going to have to pay much higher taxes when she enters the workforce paying off the high on the hog debt your president and Congress have created for her.
And no, Jack, you are flat out wrong. Debt to GDP ratio is not the tell all of whether debt is out of control. There are a host of other factors that play in. Not the least of which is a trade deficit reaching ever new highs under your president and Congress. The stifling effect of paying the service on the debt is growing toward abominable in terms of limiting our government’s options in both domestic and foreign policy. A government which can’t make appropriate choices because it is hamstrung by escalating interest on the debt, escalating debt itself, as well as fighting an anti-tax sentiment which it created, is a prescription for creating more problems than get solved.
Smart voters will vote all incumbents out and teach them once again who the hell they work for. Currently, they are in it for themselves, their big dollar contributors, and special interests who will be there at reelection time. Solving issues like border security, illegal immigration, deficit and debt, education quality drops, and preserving a safety net, all issues a majority of Americans agree on, take a back seat to politicians first priorities. They have indeed forgotten who the hell they work for. Time for voters to ram the reminder down their big fat salaried careers on our dollar.
Posted by: David R. Remer at November 11, 2005 09:11 PMDon’t know why gas is so cheap in America…but a spike in fuel prices will definately hurt us short term. I think in the long term, with the right incentives, alternative energies (and our future) could be the biggest beneficiaries.
George,
I don’t know about most folks but I can cut out the bottled water and soda and still drive my a$$ to work. I would think “paycheck-to-paycheck” living folks have cut out buying sodas and other non-essentials to afford to fill up their tank with black gold so they can afford to buy other essentials like food and shelter.
Comparing soft drinks and bottled water price per gallon to fuel that most folks need for transportation is a bit of a stretch to say the least. These things don’t get me to work where I earn a living to feed and shelter my family and try my best to put a little away for golden years and my children’s college.
Posted by: Tom L at November 11, 2005 09:12 PMThe price of gas is too low in the U.S. Every time it goes up the people cry so we can’t tax it. It reflects the market cost, which is lower than the Euros charge. It is one of the few cases where we should tax more. Good luck in trying to get it done. Conservatives oppose it because interferes with the market. Liberals don’t like it because it hurts their “poor”.
If you support higher gas prices (and you are American) that makes two of us.
Posted by: Jack at November 11, 2005 09:17 PMJack, something we agree on. I support higher gas taxes, provided every dime of the increase goes toward alternative energy development or conservation R&D. That at least would be an investment in the future of America instead of a drain upon its future options.
Posted by: David R. Remer at November 11, 2005 09:27 PMDavid and Jack,
I’m with you on gas taxes. You may want to add highway improvement and developement to your list though, David. This is our major funding for the highways. I certainly agree with you on alternative energy developement. However, tax incentives in this area would further spur growth in alternative energy.
Posted by: Tom L at November 11, 2005 09:38 PMIf I knew with 100% certianty that it would go to research for alternative engergy, I’d support a higher gas tax. But given our governments proven irresponsibilty with our tax money I’d have to be skeptical.
Posted by: Ron Brown at November 11, 2005 09:39 PMAnd since when did Dasani or its parent company make $9.92 billion in one quarter? In fact, George, make you a bet. I will bet you cannot name any three corporations (outside the energy sector) which make as much as Exxon made in one quarter.
You probably are writing this on a MSN browser.
Yet, you are not bitching about the profits of Micosoft.
This is America, a capitalistic country.
The object is to make money. My point earlier was ‘you can buy gas’, it is available.
It is not a right afforded you in the constitution to buy gas.
Posted by: George at November 11, 2005 09:46 PMGeorge,
Well put. However, I would argue that the oil companies have lobbied (paid off) congress for less fuel efficient automobiles. PAC’s run our country not us…the oil industry is one of the larges PAC’s and this administration has all but bent over for the oil industry.
We are a capitalist…but that isn’t gauranteed in our constitution either. When companies take advantage of their own citizens for the benefit of a dollar then their should be consequences.
Posted by: Tom L at November 11, 2005 10:00 PMTOM L, I would rather see the energy companies pour those windfall profits back into their future alternative energy markets than give them even more tax incentives. Jesus, doesn’t anyone want to balance the budget?
Posted by: David R. Remer at November 11, 2005 10:02 PMEric
Post what you want and do it now. Let’s see what happens. I don’t understand what is happening. I don’t even know how to delete any particualar post and I never have done it. When the Watchblog manager deletes, he always posts the fact that he has made a deletion.
Posted by: Jack at November 11, 2005 10:50 PMI will bet you cannot name any three corporations (outside the energy sector) which make as much as Exxon made in one quarter.
You can’t. ExxonMobil’s third quarter profits are bigger than any other company in capitalist history, In or out of the energy sector.
Exxon has big profits because it is a big company. It is the percentages that count. If I make a $50 profit on a $1000 dollar investement and you make a $25 profit on a $100 investment, who is doing better?
Posted by: jack at November 11, 2005 10:56 PMEric
I am not the owner of this blog. I post here and have never had any trouble and I am reasonably certain that the manager does not agree with my political philosophy. Nor has anyone ever censored anything I have written. Yours is the first case I have heard of like this. When the manager deletes something, he makes a note. I don’t know what else to tell you.
Posted by: Jack at November 11, 2005 11:26 PMERIC G, you were banned from commenting here for calling others here moronic. Everyone else here can read and follow our policy. Again, your comments are no longer welcome here and will continue to be deleted.
Posted by: Watchblog Managing Editor at November 11, 2005 11:46 PMproof once again of the failings of the public school system. I love how people on the left constantly speak about the economy as if it were an emotional issue. it is not. it is a system of equations. you can spin the numbers any way you want to if you want to talk about the plight of windsurfers in Indiana. yet why, if libs constantly want to talk about debts and “borrowing money”, do they also want to forgive the debts of other countries? and why are there 100’s of thousands of “get out of debt” companies out there? we all live in debt it seems like. lifestyles are lived to their fullest, but then extenuating circumstances lead to debt. sounds like the politics of war doesn’t it?
Posted by: Robert at November 11, 2005 11:51 PMit’s just a matter of absolute hypocricy on the left. lying isn’t important until a republican does it (much less PERJURY). the economy isn’t “horrible” until a republican is in the white house despite 20% unemployment and double digit interest rates (like under Carter). I am not a supporter of Bush’s policy of spending, but at the same token I can see that sometimes you have little choice than to spend the money NOW to get things done than have a problem fester like a boil/blister.
libs are like a person picking at a scab…and the wound is the 2000 election. GET OVER IT PEOPLE…YOU LOST!!! (TWICE!)
Posted by: Robert at November 11, 2005 11:57 PMworried about profits from investments? ask Hillary how you can make millions in commodities…then talk to me about the oil companies…’nuff said!!
Posted by: Robert at November 11, 2005 11:59 PMGeorge,
Microsoft, eh? Well, I happen to be very familiar with MS. Take MS and the quarterly profits of any other two companies, and they will still not add up to Exxon’s record setting profit.
Not revenue.
Profit.
And it’s no coincidence. This is a fossil fuel administration. It has always been about oil. And no, the Bush fossil fuel administration is not about providing cheap gas for you. It’s about taking care of Big Oil.
Jack,
Rule of thumb: when people counter persuasive arguments using percentages, they are usually in trouble. Next time a discussion like this arises, have some fun & watch for it. Maybe you’ll catch me!
David:
The stifling effect of paying the service on the debt is growing toward abominable in terms of limiting our government’s options in both domestic and foreign policy. A government which can’t make appropriate choices because it is hamstrung by escalating interest on the debt,
Interest on the debt peaked at about 1997 and has declined considerably since then because of lower interest rates. The numbers I looked up in federal budget docs say interest on the debt hit a peak of $243 billion in 1997 as was $166 billion in 2004. Should interest rates rise to were they were in 1997 and before, then your point would make sense. It also takes time for these expenses to rise and fall as it takes time to retire old debt and refinance to new.
As a country we are able to carry more debt with less cost the same way homeowners are able to refinance, cash out enough to buy and SUV and still lower their house payment.
Craig
Posted by: Craig Holmes at November 12, 2005 12:36 AMRobert,
You infer Hillary Clinton made “million” trading. That is not true.
Here is a detailed account of Hillary Clinton’s commodity trading. It generated @ $100,000 in profits in 10 months.
That’s a considerably different matter from a corporation’s $9.92 BILLION quarterly profit.
Unemployment has never hit 20% in my lifetime. What on earth are you talking about? Don’t just make it up as you go along, please.
“… why, if libs constantly want to talk about debts and “borrowing money”, do they also want to forgive the debts of other countries?”
Sometimes it makes sense to ‘forgive’ or restructure a foreign debt, because a country cannot service its debt load. But somehow I doubt there’s a serious point to the digressive statement about foreign debt. Care to expound?
Posted by: phx8 at November 12, 2005 12:40 AMPhx8
You have to look at both percentages and absolute numbers. The U.S., for example, is the world’s most generous provider of government foreign aid in the world. Our critics always point out the percentage. You need to consider both.
In the case of profit and loss, everything depends on the percentage.
You mentioned that you prefer bonds to stocks. (Sometime we should talk about that. Bonds really do mystify me as an investment.) The key measure of success for a firm is how much money it makes for its owners - the stockholders. Owners of oil firms did well last year (although Exxon is $10 off its high). But if you look at their long term results, it is not so good.
It has 6,222,400,000 shares outstanding, each one worth about $56. If a company of that size does not have a big profit something is wrong.
phx8…I don’t care to expound b/c it says what it says…if you can’t figure out what it means and that we are basically expected to fogive the debts of other countries while we can’t POSSIBLY put ourselves into the least bit of debt when we’re fighting a war on terror then keep your blinders on. as for the Hillary thing…the whitewater scandal did not stop when she pulled out of the commodities market and yes I was wrong in the numbers by 1 zero. the one thing I can say on that is that I’ll bet you that Exxon didn’t invest only $99.2 mil in research/maintenance/exploration/etc. over the last 3 months (that would be the equivalent of Hillary’s 1000 making 100000). i’ll bet it’s a HECK of a lot more than that! and those profits won’t all go in their pockets either.
another misconception of the left…”profits bad” breaking even good…sorta like Jesse Jackson “breaks even” since his Rainbow-PUSH is a non-profit organization. HA!!!
Posted by: Robert at November 12, 2005 01:28 AMRobert,
“the one thing I can say on that is that I’ll bet you that Exxon didn’t invest only $99.2 mil in research/maintenance/exploration/etc. over the last 3 months (that would be the equivalent of Hillary’s 1000 making 100000). i’ll bet it’s a HECK of a lot more than that! and those profits won’t all go in their pockets either.”
Please, don’t guess. Google it, provide a link, or cut & paste a site’s supporting evidence. I don’t know if you are right or wrong about Exxon’s R & D, but it would be a more powerful statement if supported with specifics. If that’s inconvenient for whatever reason, perhaps broad generalizations would work better.
Personally, I detest Exxon for it’s prominent role in lobbying against attempts to address Global Warming.
I think Clinton did a good job. But he inherited an economy on its way up
I like your theory, Jack. That means Reagan inherited Carter’s growing economy and then handed his own wrecked economy to Bush Sr. :)
BTW, there’s a really good book, “In an Uncertain World”, about how Clinton, Rubin, and Greenspan worked their asses off to create the greatest economic expansion in the history of the United States (aka, the Golden Age of Clinton).
As for the economy now, Lloyd Bentsen said it best when describing Reagan’s economy back in 1988: “It’s easy to create the illusion of prosperity. All you have to do is write hot checks for 200 billion dollars a year.” Though in Bush Jr.’s case it’s more like 400 billion dollars a year.
and yes I was wrong in the numbers by 1 zero
Ooops. That kind of trivilaizing of a ten-fold miscalculation may explain why so many on the right believe the economy is in good shape: “Billions, millions; what’s the difference?” :)
Posted by: American Pundit at November 12, 2005 09:07 AMyeah…well ask the British what a billion is…then tell me the difference.
Posted by: Robert at November 12, 2005 09:47 AMphx8…all I can tell you about global warming is that it is NOT what the environmentalists claim it is. I can admit that the earth is getting warmer, but can you prove that it’s not just the natural cycle between ice ages?
Secondly, if I was Mary Mapes…I would say you have to prove me wrong about my numbers on Exxon’s R&D because I believe it’s true.
Posted by: Robert at November 12, 2005 09:53 AMAP…Carter’s ecomony was in shambles and didn’t recover until ‘82 to early ‘83 or are you living in a dream world?
Posted by: Robert at November 12, 2005 10:01 AMAP
As Robert points out, the economy was in the toilet until 1982. Reagan inherited an economy on the way down and left it on the way up. The next downturn didn’t hit until 1990.
I read Rubin’s book. I liked Rubin’s book. I think he was the brightest light in the Clinton administration. But the economy was on the way down in 2000 and that is what Bush got. The economy was on the way up in 1991 and that is what Clinton had to work with.
Presidents are like doctors a century ago. THey can do some good, but generally the Lord cured and the doctor collects the fee.
AP
I like your theory, Jack. That means Reagan inherited Carter’s growing economy and then handed his own wrecked economy to Bush Sr. :)
I don’t know where you were in the 70’s but the economy wasn’t growing. Between Johnson, Nixon, Ford, and Carter the economy was in pretty bad shape.
Robert,
You write: “I can admit that the earth is getting warmer, but can you prove that it’s not just the natural cycle between ice ages?”
CO2 from human activities constitutes 90% of the greenhouse gasses, and causes @ 62% of the warming. CO2 levels in the atmosphere have risen to 400,000 ppm, possibly the highest in 20 million years.
If we could magically stop adding greenhouse gasses today, CO2 levels would rise to 550,000 ppm.
Really, this topic should be in another thread. I’;ve posted on this before, so please pardon if the above stats are from memory.
We would be foolish not to act.
It’s the biggest issue of our time, more important that terrorism. We would be absolutely foolish not to act.
As Robert points out, the economy was in the toilet until 1982. Reagan inherited an economy on the way down and left it on the way up. The next downturn didnâ´ hit until 1990.
I guess I’m a little fuzzy on the timing in your delayed effect theory, Jack. Either that or it’s totally arbitrary, based only on political calculation. :)
Posted by: American Pundit at November 13, 2005 10:10 AMAP
I was unclear. The economy started to grow again in 1982. That was the end of our time of troubles, not the beginning.
About two years in each case. There is also a big difference in the recessions. 1990-91 was not very bad nor very long. It was over in March 1991, before many people even noticed. In fact the only reason we remember that one at all is the it tended to hit the coasts, where the opinion making people live. The 1980-2 recession was a lot worse, but it was harder on the midwest and the south.
To all
re perceptions, I was reading an editorial in the Washington Post this morning. This one is not about the economy. Which is maybe why they they told the truth about the economy.
In an attempt to defend illegal immigrants and show why they should be accepted the Post wrote, “There is work - enormous amounts of work, particularly in teh Northern Virginia suburbs. In fact in an area with virtually NO UNEMPLOYMENT …”
Posted by: Jack at November 13, 2005 10:27 AMJack,
RE: 30% of American Women are dying of AIDS
I’m sorry it took me so long to answer you. I don’t believe that you have not seen the news. I also do not believe that you have not noiticed the missing women from our economy. Take a long look at your stores. Think about them 7 years ago. Notice any difference! Look at your government offices, do you see any changes? Where did all the senior citizens come from, why can’t they retire? Surely there are some young people to take their places! Or are there? Check out your local Walmart. Who is working there? Look at your local utilities companies, who do you see there that was not there 7 years ago? Look at your home town. Are those the same people you always knew? Now I believe that at least 30% are people you did not know 7 years ago and who did not attend the schools in your area. I think that people just don’t notice because they just don’t care.
