Op-ed: Bye-Bye, Bush Boom

iVillage Member
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 - 1:46pm
One cannot legislate decency, values or morals. It's possible to punish certain behaviors but all too often the real offender hires a lawyer/lobbyist/legislator and zips off to repeat the old patterns with slight mutations that permit evasion of the spirit of law. And all the legislation does is add another onerous layer of bureaucracy. I see no contradiction in my stance. If you have a innate sense of rectitude, no amount of legislating is going to be required to adhere to that code of honor. It doesn't mean that law making is pointless but those laws have to be well written and wriggle-room free!

As regards savings, well, there have always been those who saved in banks and investments and those who borrowed from banks--so money saved is not necessarily out of circulation unless you stick it under between your mattresses. I don't foresee a time when all of us will save and nobody will borrow. In fact, I fear the reverse may be true that there are far, far more of us borrowing than saving. It's fueling a bubble which Greenspan has done an admirable job of keeping from popping.

I do feel very strongly that the attempts to regulate certain industries have backfired badly under this administration. I watched a PBS show and don't remember which one but it was about the effects of coal burning on mercury levels and how EPA, when formulating the guidelines for acceptable mercury levels, wholesale adopted wording written by the very industry it was supposed to be regulating. Fox guards chicken house! But that goes to my first point about legislating values.

To the best of my knowledge, there is no one theory of economics that truly explains all the variables and possible outcomes in economics. It will be interesting to see what spin the Bush campaign puts on all its policies and their "success". I am not a fan of the man, nor of his cabinet so I will be listening and watching with both ears and eyes as wide open as possible.

Gettingahandle

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

iVillage Member
Registered: 03-18-2000
Thu, 07-08-2004 - 2:52pm

I guess you're familiar with this corporate watch-

 


Photobucket&nbs

iVillage Member
Registered: 06-29-2004
Thu, 07-08-2004 - 6:31pm
Hello does the stock market crash and 9/11 ring a bell? Comparing those figures to Clinton's years is downright ridiculous.
iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 6:32pm
No, those are new sites for me. Might be interesting to view more closely but from a quick glimpse, it looks like the lineup features the usual suspects! Telecoms, energy firms and accounting firms appear to have serious problems with truthfulness but that's been covered pretty thoroughly in regular media outlets. I just wonder who's laying low now but has plenty to be worried/feeling guilty about. Well, it's election year and I bet they pick a candidate and donate as much as possible to their chosen candidate and/or the entity that supports the candidate/message.

Gettingahandle

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

iVillage Member
Registered: 03-26-2003
Thu, 07-08-2004 - 6:46pm
OK, I'll bite. If the economy took such a hard hit because of the stock market crash and 9/11, explain how oil companies raked in such handsome profits since the Clinton years. Your explanation ought to be interesting!

Gettingahandle

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

iVillage Member
Registered: 04-16-2003
Thu, 07-08-2004 - 7:01pm
You keep explaining the same points to me, by using your dh as an example. We aren't having a discussion, because what I say is just to callous for you to contemplate. I don't expect you to accept my view, but you should know that many CEOs think just like me.

I don't see how you can look at what's been happening in the corporate world, the scandals, the jobs going overseas, the high benefits for CEOs at the expense of share holders and employees and talk about morals in business. I know that there are instances of very moral businessman, but they are not the norm.
iVillage Member
Registered: 04-16-2003
Thu, 07-08-2004 - 7:07pm
<>

I don't know how current your mission statement is, but Ben & Jerry's was bought by a conglomerate several years ago.

iVillage Member
Registered: 04-16-2003
Thu, 07-08-2004 - 7:34pm
<>

You are correct you can't legeslate decency, values or morals. <> If this were the case, there would be no need for regulations. I can certainly understand that regulations add an onerous layer of bureaucracy; it infringes upon corporations' right to do what they want to make a profit. But should we allow certain corporations to destroy the environment and endanger lives? Have you ever read the history of the labor movement, or the the working conditions prior to regulation? Have you heard about black lung disease or dangerous working conditions prior to OSHA? Regulations have a purpose.

<> IMO there is no such animal. Apparently you have never met a person, who once given a "don't do this" does it anyway. It is all a game-- a game of "I want and you can't stop me."

<>

This administration has done everything it could to undermine the environmental regulations, at every turn it has choosen business desires over the environment. I don't understand why you say "backfired". Corporations are delighted with this administrations position on the environment.

<>

You are correct. Economic theories are tools no more.

iVillage Member
Registered: 04-16-2003
Thu, 07-08-2004 - 7:43pm
<>

I could have predicted this 20 years ago when I saw how business students enjoyed finding ways around the laws and standards of practice. I think this is only the tip of the iceberg, but maybe it will teach the more daring to be careful.

Interesting site--Thanks.

iVillage Member
Registered: 03-26-2003
Fri, 07-09-2004 - 8:59am

I know that - have you read their mission statement?

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