Bush Economy Better Than Ever?
President Bush loves to claim that his economic policies have made Americans better off. Even in the face of resounding evidence that ordinary Americans are feeling the pinch, Bush obvioulsy believes that so long as the rich, wealthy class is getting their tax cuts, off-shore havens, and increased dividends the economy couldn’t possibly be better. Too bad the chairman of the Federal Reserve didn’t get the memo.
Testifying before Congress, Ben Bernanke warned that the economy was in bad shape and getting worse. Bernanke warned that the economy was going to slow noticeably as housing markets continue to spiral downward and credit lending continues to tighten up. Couple that with all time high energy prices and the weakest dollar in nearly 30 years, and it doesn’t take an MBA at Harvard to see the writing on the wall.
Bush loves to make the claim the he helped invigorate an “ownership society” that allowed more Americans to own homes, buy new cars, and stock up on all the shiny stuff that makes American capitalism flourish. Of course, now those homes are being foreclosed, the roads are filled with gas-guzzling SUV’s bought on easy terms but now costing owners upwards of $50 a week in fuel costs, and half of the new products being purchased are tainted with poison from Chinese laxity. Nice job Georgie.
Americans may be slow, but we aren’t completely stupid. Recent polls have placed economic concerns on a par with the Iraq War as uppermost in voters minds. Many of those voters are also able to see that the two issues are intertwined. After all, the bulk of the federal deficit is due to the Iraq War, that little adventure that was going to be quick and cheap and bring democracy to the Arab world.
George W. Bush may be wondering how history will remember him. Here’s a hint…
November 9th, 2007 at 5:38 pm
Vacuous is the word that comes to mind when thinking about this administration and it shortsighted, ignorant, and dangerous approach to governing.
November 9th, 2007 at 7:04 pm
I guess “bad” and “worse” are relative terms and, perhaps you were reading a different report than the one you linked to from which you describe Bernanke as warning that the economy is in bad shape and getting worse. As to the relativity of the terms, if you are comparing the present economy to the height of the dot com bubble, yeh, I guess the present economy is bad and worse. If you compare the present economy to, say, Carter’s term in office, the term “great” is closer to the truth. As I say, relative. But Ken, Bernanke isn’t even expecting a recession, merely a slowing. How, then, do you describe Bernanke’s “warning” as saying that the economy is bad and getting worse?
Sorry, I just don’t see it.
Also, the weak dollar has two sides to it and only one is bad. A weak dollar makes American goods more attractive to foreign buyers, softening the effects on the economy and reducing the trade deficit.
Same with the housing woes. They’re only woes to the sellers. For the buyers, it’s good news, no?
November 10th, 2007 at 4:07 am
Craig,
Not if the banks refuse to lend to the buyers. And that is quite likely as this sort of thing makes banks very risk averse. That will have further knock on effects as people who were planning to refinance to escape the rate hike after the honeymoon period can’t resulting in even more people losing their homes. That sort of thing has been known to reduce spending and confidence, both of which are fairly important to the current economy.
Also, you mention the low dollar being good. In some ways it will be, but, as you say, there is a downside as well. The rising price of oil will hit America harder than Europe as the falling dollar gives a cushion.
Also, unless the dollar falls through the floor, Chinese manufactured goods will always be cheaper, especialliy as, IIRC, the yuan is still pegged to the dollar. I don’t see the foreign markets being much changed, but it would possibly reduce imports to America itself. Of coureraw materials will still be largely imported, so those prices will go up resulting in inflationary pressures to countre the deflationary ones caed by the falling currency.
November 10th, 2007 at 3:18 pm
Paul,
You don’t really think the banks want to hold on to those houses they’ve foreclosed on, do you? What would they do with them other than sell them. To sell them, they’ve got to have buyers. To have buyers, they’ve got to write mortgages on them. They’ll just be a little more conservative in selecting for whom they’ll write them, as they should be. I’m not concerned about that at all. Certainly, no question about it, energy and housing are the biggest trouble spots right now. I’m just saying that there’s a bright side to everything, even high gas prices. After all, the higher gas prices will push people to buy higher mileage vehicles, drive less, car-pool more, video conference more rather than fly around the country unless they have to, turn the thermostat down and so forth which is good for the environment, for manufacturers of high-mileage cars and so forth.
I’m not saying the economy is better than ever. I’m saying that I don’t read Bernanke saying that the economy is bad and getting worse. According to the article linked, there are those who are even more pessimistic than Bernanke and they may be right but Ken put “bad” and “worse” into Bernanke’s mouth and, as I said, I don’t see it. What I read is, “slowing” but no recession. Frankly, I’d like to see the fed loosen up again but it doesn’t sound like they intend to, not this next time, anyway, but that’s their decision.
Anyway, just trying to say that it’s not all bad news.
November 10th, 2007 at 3:19 pm
By the way, Paul, what’s a litre of petrol go for where you live?
November 10th, 2007 at 5:13 pm
Craig,
It all depends on exactly how strict they get. I actually work in that sort of field and they’ve gotten a lot stricter (and they needed to because they were giving out loans that people couldn’t hope to repay if interests went up even fractionally). But the first reaction is to become too conservative to absolutely minimise future risk. That will cause a problem unless it’s eased up early.
Over here one mortgage provider had major problems because hte other bsanks wouldn’t lend to it to minimise their risk. That’s the sort of thing I see as causing problems.
As for prices they’re 99.9p/litre for unleaded and 101.9 p/litre for diesal (There is no leaded petrol anymore). IIRC, the average isn’t too far off that. But that’s mostly (75%IIRC) tax
November 10th, 2007 at 5:37 pm
99.9p/litre. Sorry but I totally do not get the UK money structure. Is that just under one pound/litre (i. e., 1 pound minus 0.001)? If so, that translates, by my calculation, to about $7.90/gallon US. This afternoon I paid 3.179/gallon. How do you put up with that kind of taxation on petrol?
November 10th, 2007 at 6:31 pm
With growth numbers like this, reported just a week and a half ago, how bad can the economy be? Seriously?
As they say, read the whole wonderful thing. This was reported on October 31, 2007.
I’m supposed to believe that just ten days later the economy is bad and getting worse? Sorry. Not buying it.
November 11th, 2007 at 7:05 am
Craig,
Because it ain’t easy to hop across the Atlantic to fill up. And yes, like the US we’ve got a simple 1:100 pound to pennies system.
Also, we put up with it because, well, we’re used to it and we’re used to higher taxes in general. And we don’t tend to have to drive as far. I mean, my small tank of petrol lasts me for three months (but that’s a bit excessive).
November 11th, 2007 at 12:21 pm
Paul,
Just wondering. How many kilometers/litre does your vehicle get? That seems to be a very long time for a tank of gas to last. Is your car your main form of transportation or do you walk a lot, ride a bike, take public transportation quite often? Also, what sort of vehicle is it. [Sorry if I seem overly intrusive with my questions. I don’t mean to be nosy, I’m just interested in what life is like over there.]
November 11th, 2007 at 12:56 pm
Craig,
I drive once a week to the shops and once a month to visit family. Most of the time I walk and use public transport. So I’m not really being fair, but my car has a 30 litre tank and can get more than 400 miles out of that, so that’s around 13 miles/litre, or 21 km/litre.
But in general, the UK and Europe, partialy because of those high fuel taxes produce very efficient cars. At least compared to the US.
November 11th, 2007 at 2:14 pm
Thank you, Paul. I appreciate you enlightening me.
November 12th, 2007 at 8:33 am
George Bush is as clueless about what makes for a good legacy as he was about the effort involved in democratizing Iraq. He’s too stupid to realize that he’s been involved in too many FUBARs for even daddy to fix it.
In fact, when judged against his daddy’s wisdom (about attacking Iraq); followed by the wisdom of elder statesmen in the Baker-Hamilton report etc., Bush’s legacy will shine as the worst example of leadership bar none.
If Iraq is to truly stabilize, democratize and not become another international safe haven for robber barons, it won’t be because of Shrub. It will be in spite of all that he screwed up.
In any case, it’s going to take a very long time to fix what proud-to-be-stupid messed up. And then there is the whole problem a generation hence - of Muslim radicals spawned by the Idiot’s cakewalk.
November 12th, 2007 at 8:42 am
Me, 7 million American’s are in danger of home forclosure. The dollar is down (no, that’s not good when you have no manufacturing to speak of - agro accounts for very, very few jobs). Poverty is up. Inflation (the stupid Fed doesn’t measure the price of food or gas, by the way) is up. Joblessnes is up. Growth as a measure is retarded. It tells you almost nothing. The stock markets are bouncing all over the place. The trade deficit is spiraling out of control. The accounts defeicit is ridiculous. Wealth disparity equals 1929. Retailers are predicting the worst Christmas season in years….
And here’s what I really don’t get - after all these “liberal economists” and folks like me warned you of EVERY SINGLE THING THAT’S HAPPENED SO FAR you STILL don’t believe any of it!
Friggin’ amazing!
JMJ
November 12th, 2007 at 12:04 pm
That’s alright, Jersey, as soon as Hillary takes over the White House and she starts taxing the shit out of all those job providers (aka “the rich”), all will be right with the economy and the world…at least as far as the New York Times and all you liberal economists will be concerned. Of course that growth number of which you are so disparaging will be in the toilet but hey, who cares, right. Growth as a measure is retarded. Well growth WILL be retarded then but measuring the economy by growth won’t be.
November 12th, 2007 at 2:21 pm
Hillary won’t be taxing anyone, me. She’ll be the president, not the entirety of congress. And the “job providers” are not “the rich.” Jobs are created by supply and demand, not the whims of the wealthy. To measure the economy by growth alone is just stupid. If I gained 100 lbs tomorrow would you say, “Hey man! You really grew!,” or would you say, “Hey man! There’s a giant tumor on your ass!”
Just out of curiosity, do you even know how “growth” is measured? How about productivity itself? You did site “growth” after all…
JMJ
November 12th, 2007 at 3:04 pm
Of course not but she’ll have a Democrat majority Congress. She and they will be tax-happy, corporate-averse and pro-union. Can you say “Stagflation”? I knew you could. Jersey, it may be supply and demand that provide the conditions under which the wealthy provide jobs but it’s the wealthy that provide them (Question: are the owners of the corporations that hire people more likely to be: (a) poor, (b) middle class or (c) wealthy?). How many poor and middle class people do you know that are hiring? They’re trying to pay their bills. It’s the wealthy that own companies that do the hiring.
Comparing the growth of the economy to your girth is silly. A hundred more pounds packed onto your girth would give you a heart attack. Adding new industries and expanding industry doesn’t adversely effect the health of the economy; it’s good for the economy in that it means more goods and services provided, lower unemployment/higher employment, more money in more people’s pockets and it tends to spread out into many different industries. There’s no comparison in reality between putting on a 100 pound tumor or of fat and a growing economy. That’s like comparing apples to the color purple: imaginative but, ultimately fruitless.
November 12th, 2007 at 3:09 pm
And economic growth is measured by “increase in value of the goods and services produced by an economy.” Productivity is measured by “the amount of output created (in terms of goods produced or services rendered) per unit input used. For instance, labour productivity is typically measured as output per worker or output per labour-hour. With respect to land, the “yield” is equivalent to “land productivity”.
What’s your point?
November 12th, 2007 at 3:14 pm
Economic growth is measured by “the increase in value of the goods and services produced by an economy.” Productivity is measured by ‘the amount of output created (in terms of goods produced or services rendered) per unit input used. For instance, labour productivity is typically measured as output per worker or output per labour-hour. With respect to land, the “yield” is equivalent to “land productivity”.’ What’s your point.
November 13th, 2007 at 7:01 am
“Of course not but she’ll have a Democrat majority Congress. She and they will be tax-happy, corporate-av erse and pro-union.”
Oh pl-ease. She’s not a big taxer, she’s practically owned corporate sector (look at here donors!), and her “support” of unions seems nominal at best. Unions are practically dead in America.
How can a smart guy like you buy into all this silly nonsense about Hillary. She’s a prototypical, mainstream, babyboomer pol. She’s not f’n Hugo Chavez.
And corporations are just paper entities. They are not rich or poor. Pubblic corporations are owned by a huge swath of folks from a variety of demographics, and besides, most jobs are created by small businesses, not large corporations.
And if you really don’t get my analogy, then you just don’t undsrstand economics, and I’m not in the mood to school you today. I just got some extremely bad news.
Ciao, JMJ
November 13th, 2007 at 7:22 pm
GWB Deficit $4 Trillion. GWB Policy - TAX NEXT GENERATION. GWB WAR - Report Puts Hidden War Costs at $1.6T. GWB LOSER.
Craig, Dufass class Question (Question: are the owners of the corporations that hire people more likely to be: (a) poor, (b) middle class or (c) wealthy?).
Bill Gates Drops out of college to start Company. Bill hired alot of people and does so today.
November 30th, 2007 at 7:01 pm
After SEVEN YEARS the Bush monarchy takes a swing at peace meetings somewhere on earth…and misses again.
If anyone thinks this show & tell get together is going to accomplish anything they are sadly mistaken. BushCo has no credibilty left anywhere but in the 24% club who live here in America (John D, Bruce), everyone else is just waiting for this idiot to pick up his Nintendo playstation and leave the White House for good.
Posted by: John E | November 27, 2007 4:44 PM
AIN’T that the TRUTH Plus
US TAKES BACK UN Resolution 2007, A DAY LATER - GWB LOSER.
December 2nd, 2007 at 12:20 am
yeah 4truth…just last week, South Korea invaded the north and Kim Jung il dropped a nuke on Japan. That darn Bush went and screwed that one up too.
December 2nd, 2007 at 7:27 pm
GWB is such a LOSER that GWB ask ABBAS & OLMERT to come to MD and force them into saying that there will be a Peace Plan by Dec ‘08.
GWB then makes a UN Resolution about the GWB Peace Plan that ABBAS & OLMERT do NOT AGREE to and asked GWB LOSER to withdraw it from the UN.
Steve, try to stay with the topic. Did you understand that GWB tried to set them up.
December 2nd, 2007 at 10:42 pm
4Truth,
And you’re saying that Bill Gates isn’t one of the wealthiest persons in the world? Thanks for making my point. He didn’t hire all those people while he was poor, guy. He hired them after he had coded the basis for nearly every personal computer on the planet, thus cornering the market.
By the way, Gates came from wealth. His early coding earned him royalties at 14 and an early business venture did well. If you’re picturing a dirt-poor high school drop out with nothing but the shirt on his back when he hired hundreds of employees to start MicroSoft, get off the acid and come down to reality.
December 2nd, 2007 at 11:47 pm
Jersey,
Between your comments and, weirdly enough, my own last comment, I’m convinced that I need to stay the heck out of threads touching on economics. I just end up embarassing myself.
4Truth,
If I could erase my last comment from existence, I would. Since I can’t, I can only apologize for it and retract it. I hereby do both.
Craig R. Harmon
December 7th, 2007 at 8:04 pm
hey me(rev), the point was that the regular guy starts a business and grows - HP, Dell, Apple - to employ people. I would rather work for a company that you grow with then sit in a cubicle and slave for CEO that gets 300 million and eventually lays you off after he got his.