Op-ed: Bye-Bye, Bush Boom

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Registered: 03-18-2000
Op-ed: Bye-Bye, Bush Boom
41
Tue, 07-06-2004 - 5:11pm

http://www.nytimes.com/2004/07/06/opinion/06KRUG.html?hp


When does optimism — the Bush campaign's favorite word these days — become an inability to face facts? On Friday, President Bush insisted that a seriously disappointing jobs report, which fell far short of the pre-announcement hype, was good news: "We're witnessing steady growth, steady growth. And that's important. We don't need boom-or-bust-type growth."


But Mr. Bush has already presided over a bust. For the first time since 1932, employment is lower in the summer of a presidential election year than it was on the previous Inauguration Day. Americans badly need a boom to make up the lost ground. And we're not getting it.


When March's numbers came in much better than expected, I cautioned readers not to make too much of one good month. Similarly, we shouldn't make too much of June's disappointment. The question is whether, taking a longer perspective, the economy is performing well. And the answer is no.


If you want a single number that tells the story, it's the percentage of adults who have jobs. When Mr. Bush took office, that number stood at 64.4. By last August it had fallen to 62.2 percent. In June, the number was 62.3. That is, during Mr. Bush's first 30 months, the job situation deteriorated drastically. Last summer it stabilized, and since then it may have improved slightly. But jobs are still very scarce, with little relief in sight.


Bush campaign ads boast that 1.5 million jobs were added in the last 10 months, as if that were a remarkable achievement. It isn't. During the Clinton years, the economy added 236,000 jobs in an average month. Those 1.5 million jobs were barely enough to keep up with a growing working-age population.


In the spring, it seemed as if the pace of job growth was accelerating: in March and April, the economy added almost 700,000 jobs. But that now looks like a blip — a one-time thing, not a break in the trend. May growth was slightly below the Clinton-era average, and June's numbers — only 112,000 new jobs, and a decline in working hours — were pretty poor.


What about overall growth? After two and a half years of slow growth, real G.D.P. surged in the third quarter of 2003, growing at an annual rate of more than 8 percent. But that surge appears to have been another blip. In the first quarter of 2004, growth was down to 3.9 percent, only slightly above the Clinton-era average. Scattered signs of weakness — rising new claims for unemployment insurance, sales warnings at Target and Wal-Mart, falling numbers for new durable goods orders — have led many analysts to suspect that growth slowed further in the second quarter.


And economic growth is passing working Americans by. The average weekly earnings of nonsupervisory workers rose only 1.7 percent over the past year, lagging behind inflation. The president of Aetna, one of the biggest health insurers, recently told investors, "It's fair to say that a lot of the jobs being created may not be the jobs that come with benefits." Where is the growth going? No mystery: after-tax corporate profits as a share of G.D.P. have reached a level not seen since 1929.   


What should we be doing differently? For three years many economists have argued that the most effective job-creating policies would be increased aid to state and local governments, extended unemployment insurance and tax rebates for lower- and middle-income families. The Bush administration paid no attention — it never even gave New York all the aid Mr. Bush promised after 9/11, and it allowed extended unemployment insurance to lapse. Instead, it focused on tax cuts for the affluent, ignoring warnings that these would do little to create jobs.


After good job growth in March and April, the administration declared its approach vindicated. That was premature, to say the least. Whatever boost the economy got from the tax cuts is now behind us, and given the size of the budget deficit, another big tax cut is out of the question. It's time to change the policy mix — to rescind some of those upper-income cuts and pursue the policies we should have been following all along.


One last point: government policies could do a lot about the failure of new jobs to come with health benefits, a huge source of anxiety for many American families. John Kerry is right to make health care a central plank of his platform. I'll analyze his proposals in a future column. 

cl-Libraone~

 


Photobucket&nbs

iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 10:53am
Need to bookmark or print out or find some way of keeping Gandhi's list. Those are good words to live by. I had a poster up on the wall of my dorm room in college and can still remember that particular quote of his--"The quality of life is not improved by increasing its speed".

You mentioned that small business owners have a close relationship with their employees and it's very true. The employer/employee relationship is a two way street and benefits need to flow both ways. DH hates to lay off anyone and will give employees opportunities to learn even when they make mistakes that cost him customers and money. But if they abuse his trust and/or choose to continue patterns that cause problems for him or other employees he will give them their walking papers. Even then, it costs him money because of unemployment insurance. Not sure that many people know of that expense!

Adam Smith obviously was not a proponent of "caveat emptor". Wonder what he would make of Kenneth Lay--Enron, Dennis Kozlovski (sp?)--Tyco, and even Dick Cheney's clandestine development of our national energy policy (I don't see DC as a moral sort of person anyway and that view was reinforced when I learned that he told Fox news that he felt better after using an obscenity).

And Clinton--well, we won't even go there! I think we're finding out the high price of living without guidelines/morals/values--whatever you want to call them. Society takes a hit and though consequences may not be immediately visible, they still exist. I was listening to Lynn Neary interview Bill Cosby on NPR yesterday (while cooking!) and he was explaining his exasperation with parents due to the cost of children who don't value education or clear communication. He felt that it was causing a huge setback for the African American community. 'course, I thought he was being a bit of a hypocrite. Not arguing with his message--but after all, he was an absentee dad to the daughter he fathered out of wedlock and even if he paid for her child support, money is no substitute for the guidance of a parent. We need (and lack) leaders/role models who give more than lip service to integrity and honor.

Just my thoughts.

Gettingahandle

Ignorance is Nature's most abundant fuel for decision making.

iVillage Member
Registered: 03-18-2000
Thu, 07-08-2004 - 11:07am

"Capitalism running on its own will never be able to take care of and that is where you need Rules & Regulations to "enforce" the nation's "morality" on the business."


Sadly you're correct, for the most part, given the recent corporate scandals in the US. Although I'm not ready to tar every business enterprise with that brush.


Too bad the "gentleman's" handshake is only a gesture now. Fairplay & sportmanship are these out of fashion too?

cl-Libraone~

 


Photobucket&nbs

iVillage Member
Registered: 04-16-2003
Thu, 07-08-2004 - 11:32am
Firstly, I understood your argument before you made it. I don't disagree with any of your logic, I have used it myself. I'm just saying it is threory that doesn't hold in the reality.

"false paternalism". I agree that is interesting. To me paternalism is where the father (boss) takes care of the child (employee). False paternalism is where the boss says they will look after the employee, but doesn't do it. So it is not good for employees to believe that employers are looking out for their interests. How many employees have been lulled into a sense of security only to have a rude awakening. We are looking at the problem from different positions.

Employees are a means of production, just like a piece of equipment. To loose sight of this is to loose sight of the purpose of business. You are coming at this from personal experience and how you view your employees. If you discovered that the a piece of machinery was more economical and more effective than an employee--would you choose the employee? If you discovered that using part-time employees was cheaper because you didn't have to pay health care, and just as effective as a full-time employee would you choose to pay the health care?

I had a professor who adamently denied that a happy employee was a productive employee. Then he set about proving that a happy employee would always be happy to be less productive. The extent to which an employer wants to make an employee happy depends upon the skill set of the job. Some workers are more valuable than others and can command a higher salary and more perks, but no employers wants to pay more than necessary to keep an employee.

iVillage Member
Registered: 09-05-2003
Thu, 07-08-2004 - 1:00pm

James, I disagree with you about the value of saving. Our economy currently relies on consumer spending but it's a bubble.


As I said in my post, saving is GREAT for an individual, it gives them something to fall back on, insurance and an ability to retire and much more.

iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 1:01pm
It's true that I am speaking from a point of view that doesn't see the entire corporate/business world. I can only speak of my observations in the dozen years since my husband started his company, which is still small. I think he has around twenty employees, give or take two or three. But he does NOT see his employees as pieces of machinery to be pitched when they break down. I know for a fact that DH picked up one young man who had been more or less discarded by another similar firm (size and type) and gave him multiple opportunities to grow and advance. The kid was irresponsible, impulsive, and had a brush with the court system. Not so now, and he has become one of DH's most valued and conscientious workers. DH also has an older employee with health problems and some issues with accuracy but keeps him because DH knows the guy has nothing else in particular to live for.

Vis a vis, the paternalism. The Japanese found that the loyal employee who depended on the company to reward years of labor with a guarantee of work, is not a dynamic that works well when competition becomes cutthroat. No employee ought to perceive his/her employer as a parent because that's not realistic in any setting. But that does not preclude an employer from considering the needs of employees when making decisions that affect their job status.

Certainly we are looking at the situation from different positions. My husband's company has been hurt by the economic downturn and he had to lay off employees. But he explained to each of them long beforehand that there were signs of slowdown and he couldn't afford to keep people who expected hefty salaries but didn't meet deadlines, surfed on the Internet a lot during work hours, played computer games, passed their projects off to other employees to finish, or didn't pay attention to guidelines. They all had the opportunity to take his words to heart--but several of them didn't. He laid them off but he didn't do it happily or lightly; no good manager does! As I mentioned earlier, there are significant costs in both time and money that an employer invests when a new person is hired.

Moreover, he's offered the more senior of his employees opportunities to become vested in the company so they aren't just happy--they care about how well the company does and take an active role in making sure that it stays as healthy as possible. Maybe DH is the exception but IMHO, he proves that thoughtful and caring employers do exist. And maybe you've had experiences with employers on the other end of the spectrum and those experiences have made you feel cynical. Employers and employees are probably just like all the rest of humanity. They come in all shapes, sizes and ranges of decency!

Gettingahandle

Ignorance is Nature's most abundant fuel for decision making.

iVillage Member
Registered: 03-18-2000
Thu, 07-08-2004 - 1:21pm

I was looking for another 60 Min. story but came across this instead...........


Ethical business that makes a profit & benefits the poor.


Greyston Bakery: Let 'Em Eat Cake.


How did a bakery in Yonkers, N.Y. -- a small, slightly disheveled city next door to the Bronx -- end up not only making cakes for the rich and famous, but also supporting the poor and disenfranchised?

The Greyston Bakery is a social experiment that started more than 20 years ago with the goal of employing the chronically unemployed -- getting them off the streets and back into the work force.

The profits from the bakery, which does make a profit, are used to help fund day care centers, health clinics and counseling services.

Today, the Greyston bakery has become a role model for companies that want to inject some social action into their business.

 


Photobucket&nbs

iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 1:27pm

<<<Yes we all know how 'well' that works. I always get a nasty visual when I hear trickle down economics. :)>>>


Somehow I suspect I get the same visual.......


________________________________________________

"If you don't stand up for something, you'll lie down for anything." -- B

iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 1:29pm

<<<My husband is a small business owner and he knows that it's good business sense to balance company profits with employee well-being. He also makes the point that he's in business to make money, not to run a benevolent organization. >>>


When you look at the list of best companies to work for, you can see typically that the common denominator is that the employees are typically VERY happy with their jobs, their compensation, their benefits, and the people within the organization.


I always said that, if you take care of your people, your people take care of business.

________________________________________________


"If you don't stand up for something, you'll lie down for anything." -- Bob Day, Marriage Equality Rally, Rochester NY

Help in the fight against a constitutional amendment!


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________________________________________________

"If you don't stand up for something, you'll lie down for anything." -- B

iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 1:31pm

<<>>


In NY State, a half year of government, and a half year of economics is required for graduation.

________________________________________________


"If you don't stand up for something, you'll lie down for anything." -- Bob Day, Marriage Equality Rally, Rochester NY

Help in the fight against a constitutional amendment!


<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

________________________________________________

"If you don't stand up for something, you'll lie down for anything." -- B

iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 1:34pm

Check out the history and current mission of Ben & Jerry's.


It's a pretty decent model itself!

________________________________________________


"If you don't stand up for something, you'll lie down for anything." -- Bob Day, Marriage Equality Rally, Rochester NY

Help in the fight against a constitutional amendment!


<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

________________________________________________

"If you don't stand up for something, you'll lie down for anything." -- B