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Chron: Bush apologists can't wish away the economic truth

Discussion in 'BBS Hangout: Debate & Discussion' started by GladiatoRowdy, Aug 11, 2004.

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  1. GladiatoRowdy

    GladiatoRowdy Contributing Member

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    Bush apologists can't wish away the economic truth
    By PAUL KRUGMAN

    When Friday's dismal job report was released, traders in the Chicago pit began chanting, "Kerry, Kerry." But apologists for President Bush's economic policies are frantically spinning the bad news. Here's a guide to their techniques.

    First, they talk about recent increases in the number of jobs, not the fact that payroll employment is still far below its previous peak, and even further below anything one could call full employment. Because job growth has finally turned positive, some economists (who probably know better) claim that prosperity has returned — and some partisans have even claimed that we have the best economy in 20 years.

    But job growth, by itself, says nothing about prosperity: Growth can be higher in a bad year than a good year, if the bad year follows a terrible year while the good year follows another good year. I've drawn a chart of job growth for the 1930s; there was rapid nonfarm job growth (8.1 percent) in 1934, a year of mass unemployment and widespread misery — but that year was slightly less terrible than 1933.

    So have we returned to prosperity? No: jobs are harder to find, by any measure, than they were at any point during Bill Clinton's second term. The job situation might have improved somewhat in the past year, but it's still not good.

    Second, the apologists give numbers without context. President Bush boasts about 1.5 million new jobs over the past 11 months. Yet this was barely enough to keep up with population growth, and it's worse than any 11-month stretch during the Clinton years.

    Third, they cherry-pick any good numbers they can find.

    The shocking news that the economy added only 32,000 jobs in July comes from payroll data. Experts say what Alan Greenspan said in February: "Everything we've looked at suggests that it's the payroll data which are the series which you have to follow."

    Another measure of employment, from the household survey, fluctuates erratically; for example, it fell by 265,000 in February, a result nobody believes. Yet because July's household number was good, suddenly administration officials were telling reporters to look at that number, not the more reliable payroll data.

    By the way, over the longer term all the available data tell the same story: the job situation deteriorated drastically between early 2001 and the summer of 2003, and has, at best, improved modestly since then.

    Fourth, apologists try to shift the blame. Officials often claim, falsely, that the 2001 recession began under Bill Clinton, or at least that it was somehow his fault. But even if you attribute the eight-month recession that began in March 2001 to Clinton — a very dubious proposition — job loss during the recession wasn't exceptionally severe. The reason the employment picture looks so bad now is the unprecedented weakness of job growth in the subsequent recovery.

    Nor is it plausible to continue attributing poor economic performance to terrorism, three years after Sept. 11.

    Bear in mind that in the 2002 Economic Report of the President, the administration's own economists predicted full recovery by 2004, with payroll employment rising to 138 million, 7 million more than the actual number.

    Finally, many apologists have returned to that old standby: the claim that presidents don't control the economy. But that's not what the administration said when selling its tax policies. Last year's tax cut was officially named the Jobs and Growth Tax Relief Reconciliation Act of 2003 — and administration economists provided a glowing projection of the job growth that would follow the bill's passage. That projection has, needless to say, proved to be wildly overoptimistic.

    What we've just seen is as clear a test of trickledown economics as we're ever likely to get. Twice, in 2001 and in 2003, the administration insisted that a tax cut heavily tilted toward the affluent was just what the economy needed. Officials brushed aside pleas to give relief instead to lower- and middle-income families, who would be more likely to spend the money, and to cash-strapped state and local governments.

    Given the actual results — huge deficits, but minimal job growth — don't you wish the administration had listened to that advice?

    Oh, and on a nonpolitical note: Even before Friday's grim report on jobs, I was puzzled by Greenspan's eagerness to start raising interest rates. Now I don't understand his policy at all.

    http://www.chron.com/cs/CDA/ssistory.mpl/editorial/outlook/2728932
     
    #1 GladiatoRowdy, Aug 11, 2004
  2. mulletman

    mulletman Member

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    #2 mulletman, Aug 11, 2004
  3. bamaslammer

    bamaslammer Contributing Member

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    When I see Krugman, I know....disregard all that follows. I'm just sick and tired of this constant bashing of the economy by the Democrats for political gain. We are in a BOOM, you dumb bastards! A boom and they still act as if we're one second away from another Great Depression. Such a positive "nuanced" approach by the left is just guaranteed to attract rational voters come November. :rolleyes: Yes, that means the kind that aren't looking for more handouts, paid off homeless guys voting for free cigarettes or dead people (a core Democratic constituency in a lot of areas).
     
    #3 bamaslammer, Aug 11, 2004
  4. rimrocker

    rimrocker Contributing Member

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    I knew Boom. Boom was friend of mine. This ain't no Boom.
     
    #4 rimrocker, Aug 11, 2004
  5. glynch

    glynch Contributing Member

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    When I see Krugman, I know....disregard all that follows. I'm just sick and tired of this constant bashing of the economy by the Democrats for political gain. We are in a BOOM, you dumb bastards! Bama


    lol;) Bless his heart. He is a true believer!! No argument just true believing.
     
    #5 glynch, Aug 11, 2004
  6. Baqui99

    Baqui99 Contributing Member

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    Careful, Santosh Srinivasan and Preeth Sentilkumar from Bangalore would disagree. Soon they will take your job at a fraction of the cost.
     
    #6 Baqui99, Aug 11, 2004
  7. u851662

    u851662 Contributing Member

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    WTF?!?!?! Boom my @ss....... You cant be serious..... Please tell me Bush is your cousin and your just havin his back... Can you even say we are in a BOOM with a straight face?
     
    #7 u851662, Aug 11, 2004
  8. bamaslammer

    bamaslammer Contributing Member

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    Doubt it. I don't see them writing punchy articles about the mighty Falcons and ole Mike Vick any time soon. Besides, this whole "every job is going overseas" business is a fallacy. For every job we send over there, different jobs are created. Besides, I think you're looking at this from the wrong viewpoint. Jobs are not a static thing that remain forever. You work at the leisure of your employer and they have every right to find someone who will do the same or better work for less. They owe that to their stockholders like myself.
     
    #8 bamaslammer, Aug 11, 2004
  9. SamFisher

    SamFisher Contributing Member

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    Right. I imagine that this judgment is based on a well thought out, well grounded theory of macroeconomics that you harbor that renders his opinion unsuitable in comparison to your own august achievements in the field. It's actually rather symptomatic though, of you closed-mindedness and a pretty telling statement.

    Well, aside from that being a ridculously gross oversimplification -- and extrapolating that into what you probably meant to say, the results don't seem to match the theory, and now even the theory is being reconsidered. See Gomory & Baumol's latest work, e.g.

    EDIT: I'm not even going to get into the stupid stuff about the BOOM. Suffice it to say, the numbers make that statement go POOF.
     
    #9 SamFisher, Aug 11, 2004
    Last edited: Aug 11, 2004
  10. mc mark

    mc mark Contributing Member

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    Come on Sam! He's just a northeast, liberal, academic, elitist! Just like Forbes Kerry!

    Welcome back Bamma! We missed you!
     
    #10 mc mark, Aug 11, 2004
  11. SWTsig

    SWTsig Contributing Member

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    it's kinda cute, really.

    awww, bama... you just keep right on believing!
     
    #11 SWTsig, Aug 11, 2004
  12. bamaslammer

    bamaslammer Contributing Member

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    I see you haven't changed a bit, Sam. You're still a pompous, arrogant SOB as always. I've always liked the terms you liberals like to throw around like "close-minded." In liberal-speak, that means not leftist, so I take that as a compliment. But I just don't see where you people get off not describing this as a boom. Unemployment is low, jobs (though not as many as we'd like) are being created, people are buying durable goods, houses are being built, etc. Come to ATL and tell me there is not a boom. I see new construction going up every day. There will be cycles in the economy and now we are in an up tick thanks to timely tax cuts. Kerry promises to raise taxes and yet.....this would be economically stimulating!?
     
    #12 bamaslammer, Aug 11, 2004
  13. glynch

    glynch Contributing Member

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    Bama, I'll try to help you out. Here's just one point.

    Second, the apologists give numbers without context. President Bush boasts about 1.5 million new jobs over the past 11 months. Yet this was barely enough to keep up with population growth, and it's worse than any 11-month stretch during the Clinton years

    Try to refute this. Maybe TJ and Bigtexx alleged econ honchos from Rice might help you out. Maybe National Review Online can help. Come on give it a try. Don't give up.
     
    #13 glynch, Aug 11, 2004
  14. SamFisher

    SamFisher Contributing Member

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    And you're still living in a world where bama knows best and your blithe anectdotes, canned one-liners, and formulaic prejudices trump reality as well as the index of leading economic indicators.

    Closed-minded is liberal speak for ignorance. I suggest you open your mind at some point and establish a background in this area --which you have yet to demonstrate at all in the past year -- before continue sticking whatever feet you haven't gnawed off in your mouth; otherwise I think debating this with you any further would be a monumental waste of my time, just like it was a stupid idea for Krugman to try to lower himself to the level of an epsilon semi-moron like O'Reilly.

    If that makes me an elitist, too bad. Better that than...
     
    #14 SamFisher, Aug 11, 2004
  15. Baqui99

    Baqui99 Contributing Member

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    You're right, different jobs are being created. Just look at all the laid off IT workers that have found work waiting tables.
     
    #15 Baqui99, Aug 11, 2004
  16. bamaslammer

    bamaslammer Contributing Member

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    That is just one sector of the economy. If a corporation can get foreign workers to do that job as good or better than the U.S. ones for less money, more power to them. It's about profit. It's not about charity. Your job is not a right, but you serve at the priviledge of your employer.
     
    #16 bamaslammer, Aug 11, 2004
  17. SamFisher

    SamFisher Contributing Member

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    ....so what happens to journalists who can't spell in this new economy? :confused:
     
    #17 SamFisher, Aug 11, 2004
  18. bamaslammer

    bamaslammer Contributing Member

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    It's called spell check. BBS has no spell check I know of, so you get mistakes. I'm not perfect, just forgiven.
     
    #18 bamaslammer, Aug 11, 2004
  19. Faos

    Faos Contributing Member

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    :D
     
    #19 Faos, Aug 11, 2004
  20. F.D. Khan

    F.D. Khan Contributing Member

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    Scenario:

    Bush comes into office during the beginning of a recession after the market has overheated well beyond the core growth in corporate earnings.

    Bush (with his limited ability to CONTROL the market as president and influence on the fed) uses his fiscal and monetary stimulus to lower interest rates and make money cheaper. He then takes a very Keynesian approach and lowers marginal tax rates while increasing government spending as a means to jump start a faltering economy.

    From an economic standpoint, I see very little questionable activity there. I have discussed many of these issues with dozens of economists and financiers from all over the nation and 95% of them are in agreement. There are questions about international issues, the war with Iraq, social concerns and other political ideology, but within the realms of modern economics, he did what was in his power to do to 'help' stimulate the economy. The US economy is waaay too massive to be controled by the government, and all the government can do is provide rutters to smooth out the bumps. This means decrease spending, reducing the budget during periods of overheating and raising interest rates to limit inflation; and then during times of weakness to lower interest rates and push government spending.

    Krugman seems to be one of the few economists i've seen that so deeply discusses politics and has a tendency to overanalyze short-term data sets which in the short-run mean little. Its strange to see an economist analyzing short-run employment numbers. If anything most renowned economists would discuss worker productivity and its growth as a facet for growth in GDP which increases a country's wealth and its standard of living. Extreme gains in productivity has stifled job growth though it is still within sustainable and historically healthy rates.


    The Future:

    Bush wishes to continue to open up international trade, which is probably chapter 4 in most Macro classes which lowers costs to ALL consumers as countries learn to specialize. He also wishes to maintain lower tax rates to encourage reinvestment into society.

    Kerry wishes to eliminate the tax cuts and decrease international trade. Both of which in the long run will hurt our country more than it will help it. He also is revolving his campaign around increasing social services such as health care and such which will push for higher tax rates and increased social services with undoubtedly will decrease individual worker productivity.
    *See the European economies over the last few years as these social services and tax rates grew enormously. This has decreased their productivity substantially as they continue to weaken as a global region.


    That is why I am voting for George Bush '04
     
    #20 F.D. Khan, Aug 11, 2004
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