Let’s be Blunt about the economy

October 30, 2006

For the Republican establishment, the 2006 elections are about Iraq. Wait, scratch that, the war is a fiasco of historic proportions. The elections are actually about national security. No, that’s not right either; the war is making the terrorist threat worse and the GOP has a lousy record on domestic security. The 2006 elections are really about the economy. Yes, that’s it, the economy.

As the NYT noted last week, the vaunted White House political machine has decided that Republicans can tout the strength of the economy to help stave off disaster on Election Day. The president personally devoted much of his recent campaign events to the issue. “No question that a strong economy is going to help our candidates,” Bush said in a CNBC interview, “primarily because they have got something to run on, they can say our economy’s good because I voted for tax relief.”

On the other hand, it’s hardly an effective strategy. On the one hand, most Americans aren’t benefiting from the current economy. On the other, the Republicans’ rhetoric ran into some inconvenient reality in the third quarter, when economic growth slowed to its lowest rate in three years.

The nation’s gross domestic product, the value of all goods and services produced, expanded at a sluggish 1.6 percent annual rate in the quarter, down from a moderate 2.6 percent pace in the second quarter, the Commerce Department reported. […]

“Once again, the Bush economy is going in the wrong direction,” said Rep. Carolyn B. Maloney (N.Y), the senior House Democrat on Congress’s Joint Economic Committee. “An economic recovery that never benefited working Americans in the first place now has slowed to a crawl. President Bush’s economic happy talk is betrayed by the facts on the ground and the stats released today.”

So much for the GOP talking points. But, never fear, the House Republican leadership has a new excuse to rationalize all of this.

TP highlighted one of the more inane justifications for failure I’ve heard in a while.

The conservative response? Blame the media. On Fox News yesterday, Rep. Roy Blunt (R-MO) said “a bigger story is that so much of the media – and I don’t put Fox News in this category – has constantly talked down this economy.” “Believe me, if we were in the mid-90s, Bill Clinton was president,” Blunt said, “I am convinced there would be a totally different national media coverage by most of the media of this economy.”

Of course, it’s the media’s fault. When the economy is growing, we should all thank the Bush White House. When the economy is faltering, we should all blame news outlets.

Blunt’s right that the media coverage of the economy was far different in the 1990s when Bill Clinton was president, but that probably has something to do with the fact that the economy was much stronger then.

Right now, growth has stalled, wages are awful, bankruptcies are up, debt is skyrocketing, Americans are working more for less, employment insecurity is everywhere, health care costs are hard to keep up with, and unions and bargaining power are in decline. And just for good measure, the GOP establishment has run the biggest deficits in American history and has put two wars on the national charge card.

Given all of this, Rep. Roy Blunt, who fancies himself a serious person, wants Fox News’ viewers to know that everything would be a lot better were it not for the New York Times. It’d be funny if it weren’t so sad.

Blunt’s comments come on the heels of Rep. John Sweeney (R-N.Y.) blaming this year’s quarter-trillion dollar budget deficits on the Clinton administration, despite the fact that Clinton hasn’t actually been in office for six years.

Briefly during the 2004 presidential campaign, John Kerry referred to Bush having led an “excuse presidency,” in which all of his faults and errors were pinned on someone else. The phrase didn’t catch on and Kerry ended up dropping it, but he may have been onto something. We are, after all, talking about the “excuse party.”

Iraq? Intelligence community’s fault. Mark Foley? The gays’ fault. The economy? The media’s fault. The deficit? Clinton’s fault.

In 2004, the president told the Republican Governor’s Association, “[W]e stand for a culture of responsibility in America. We’re changing the culture of America from one that said … ‘if you’ve got a problem, blame someone else,’ to a culture in which each of us understands we’re responsible for the decisions we make.”

Two years later, it’s a rather sad joke.

October 30, 2006 at 11:22 am

Dude, you missed the icing on the cake–the big one-time car sales number that propped up that GDP number. It would have been 0.9. http://www.bloomberg.com/apps/news?pid=20601087&sid=aF5My4Z6jHiY&refer=home

Even though I no longer own any US securities or stocks, I still get financial info from fund companies. Everyone one of them is saying 2007 will not be a good year.

I’ve read this before and got confirmation from friends working in the finance industry, but the US Treasury does not print M3 information any more.

M3 for those who don’t know indicated the production of US dollars. This is considered a bad sign among those who know because no one knows how fast the money supply is being created. A lot of alarmists, er, non optimists, er bears are saying that this is a sign that the Bush Admin is printing money to pay for trade deficits. As most of us who read our history knows what happens when governments print money. Printing devalues it and causes runaway inflation and high interest rates (not talking 10-15%, but much higher.) Considering the personal debt, the housing bubble, the rising mortage defaults and personal bankrupcies, the odds of a soft landing are not good.

Basically, any economic growth right now is smoke and mirrors including the Dow Jones Index. As the Wonkette reported a while back, any time the stock market hits its peak, some two months later, it takes a major tumble.

I’d rather be wrong than right, but it does not look good. Also, if I’m a Repub, I’m going to be very very very very scared.

Yeah, the Republicans blame everybody but God and that’s because he has a constituency. As doubtful said a while back , “it’s not about the economy, it’s about my economy.” And if the “my” is the richest .01 percent of Americans, hey the economy is good news. It’s gospel for rich men. Everybody else is in the dumpster.

Bush is a sad excuse for a president.

Blunt’s excuse is even funnier when you remember the lifeblood of the MSM is advertising — getting people to spend, spend, spend. So under his logic the media is acting against both its economic interests and the interests of its clients to throw an election for the Democrats.

Weakest. Excuse. Ever.

This man is an embarrassment to Missouri.

The performance of “the economy” is pretty damn useless when it comes down to pocket-book issues. Who cares what the aggragate numbers say? What do individual voters think about the economy? What, if anything, do they think the government can do about it? Unless all my income comes from slivers of percentages on stock trades, I don’t give a damn about the numbers.

The way the MSM discusses the performance of the economy is ridiculous.

I’m never a fan of giving politicians (especially Presidents) credit or blame for the economy, and as such Politicians should not claim responsibility for the economy. Needless to say, politicians are rarely given credit for a good economy by the voters (witness Clinton and Bush II) and always given credit for a bad economy (witness Bush I).

In reality, The Federal reserve has much more control over the economy with its monetary policy (i.e., setting interest rates) than the federal goevrnment. I call Fiscal policy the icing on the Fed’s cake — meaning it’s moves can accentuate or minimize Fed monetary actions, but rarely turn the Fed on its head.

As for GDP, George Will laid out the past’s GDP figures pretty well on 10/19:
“Worst economy since Herbert Hoover,” said John Kerry in 2004, while that year’s growth (3.9 percent) was adding to America’s GDP the equivalent of the GDP of Taiwan (the 19th-largest economy). Nancy Pelosi vows that if Democrats capture Congress they will “jump-start our economy.” A “jump-start ” is administered to a stalled vehicle. But since the Bush tax cuts went into effect in 2003, the economy’s growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and 1990s (3.3). Today’s unemployment rate (4.6 percent) is lower than the average for the 1990s (5.8) — lower, in fact, than the average for the last 40 years (6.0). Some stall.”

Sure, the economy has been decelerating over the last 3 quarters (from historically high rates), but that is more a function of the Fed raising rates for the last year plus than any government moves. Some would argue, without the tax cuts, the economy would be much weaker than it is today. And many are looking for a rebound in 4Q GDP… how will you react to that?

To riff off of Dale, if the media would focus on how the Republican base’s economy is doing — the haves and the have mores — certainly a rosier picture can be painted. Unfortunately they are a very small percentage of the total population, who are made up of the struggling-to-haves and the don’t-have-as-muches.

Dan, I’ve heard rumbling rumors that the Bush administration is printing money, but since the MSM hasn’t mentioned it yet, I am withholding a yea or nay on believing it.

The Democrats need to warn people that it’s likely happening and emphasize what the likely result will be, else if they win Congress next week, they’ll be blamed for any kind of economic losses that ensue later. Saying it after-the-fact sounds like excuse-making even if not true, and the Dems don’t need to be in that position.

Iraq? Intelligence community’s fault. Mark Foley? The gays’ fault. The economy? The media’s fault. The deficit? Clinton’s fault.

And if you can’t easily pin something on someone? George Soros’ fault.

JRS Jr, that was a satirical posting, right? you aren’t really being serious, are you?

first off, presidents set the fiscal policy parameters, which do make a difference. it’s then up to private actors outside of the president’s control what results from those parameters, but that’s different from setting them.

second, clinton was generally given credit for a good economy because it was a good economy. i don’t know why you think he wasn’t.

on the other hand, the bush economy is one in which GDP is growing adequately and most people aren’t experiencing any benefits from that growth, so most people don’t give “credit” to bush for good reason.

as for george will, listen, here’s a hint for you: if you’re citing george will on the economy, you’re in trouble. the bush tax cuts didn’t begin in 2003, they began in 2001. the promise of the bush tax cuts – the explicit promise, mind you – was that they would create 5.5M new jobs between july 1, 2003 and december 31, 2004. a few months ago, we finally made it, meaning that even on their own terms, the tax cuts failed. cherrypicking those quarters for a gdp comparison to time periods that include recessions is complete and total hack dishonesty. and the unemployment rate is a poor indicator because the definitions change and discouraged workers aren’t counted. a far better indicator is the ratio of jobs to working-age population, and we are still well behind the ’90s in that respect.

nor has the economy been “decelerating” from “historically high rates.” Whatever gives you that impression? the 2005 economy was not one of “historically high rates” of gdp growth.

And, of course, the Fed is part of the government, and it’s been raising rates because irresponsible fiscal policy on the part of the bush administration has raised the threat of inflation.

And while it’s true that “some” would argue that the economy would be much weaker without the multiple bush tax cuts than it is, but “some” would argue the moon is made of green cheese. Given that tax cuts do not pay for themselves, all bush has done is deferred tax hikes, not cut taxes; the democratic proposal in 2001, for short-term tax cuts to address the recession, would have accomplished as much in terms of ending the recession without the long-term fiscal hangover of the bush giveaway (and, of course, the bush theft of the social security surplus).

and if the fourth quarter GDP is better, it won’t matter much, will it, because the whoel point of this post is that if you’re running on a terrific economy, a poor Q3 GDP number doesn’t do much for your argument.

And many are looking for a rebound in 4Q GDP… how will you react to that?

I’m looking for the Great Pumpkin tomorrow, do you think I’ll see it? George Will is great on a few issues but when he starts talking about the economy he echoes the same happy talk we get from the Admin. How does all the chirping about how great things are stack up against the news that comes down each day that this or that employer is cutting hundreds and even thousands of jobs? How does it stack up against the articles about how more and more families struggling to pay for the basics? Pensions, benefits for the working stiffs? Buh-bye. Gas prices? Gads. The economy is buggered and any polititian who says otherwise just shows his constituents that he is so far out of touch he must be phoning in from Pluto. Which might be an ideal place to send these bastards…

This is George F. Will in summary:

“All you stupid middle class voters bitching about not getting pay raises, don’t you know that your companies are spending more on benefits for you so you should feel good?”

Mr. Will, if health care insurance my company has to pay for me goes up, I’m not getting any more of a benefit than before. And in most cases, as my co-pays have gone up too, I am getting less. When it comes to health care, it’s not the money we spend, it’s the outcomes we get. And as the richest country in the world it says a lot that we have about the poorest medical outcomes of any industrialized country.

So yes, I have every reason to be pissed off at Boy George II’s economy.

“And as the richest country in the world it says a lot that we have about the poorest medical outcomes of any industrialized country.”

Lance, care to shed some more light on that conclsion?

You all might want to go read this, since the truth is things are far worse than we think:

http://apnews.myway.com/article/20061028/D8L1RVQ80.html

JRS, you can do your own googling.

Worst medical outcomes. People are not kept well, they are treated when they are only very sick. Our emergency rooms are the first medical care far too many people see. Our medical error rates are a disgrace. We spend 23% of our private health care insurance on administrative costs. For medicare, it’s 2%. That’s an order of magnitude.

Scary stuff, that socialized medicine. But between the DVA, Medicare, Medicaid, DoD and all the Government civilian employees, about half of all Americans are already receiving socialized (or government paid for) medicine. It’s just not rationalized.

And health care insurance costs are undermining the competitiviness of American Business.

But the Republican’t Base can’t stand the idea of letting there be one payer for health care.

Everything is fine! Look at JRS Jr’s shiney watch. Nothing to see here, it’s the poor corporations that are footing the bill.

George Will usually treads in dangerous terratory whenever he wrotes about something other than baseball.

Tom #14 – Nice pull on the article. Too bad there are about 25 people who will read that but 250 Million who will see fear mongering GOP ads.

JRs Jr. I want to know exactly what report/numbers/actions you would need to see to make you think the economy was performing poorly. Please let us all know so we can try to understand your continued unconditional support fo the current economy. The rest of us must need a little help to get the concept.

Just ask David Walker, Comptroller General of the United States, how sound our economy is. He’s been going around the country telling everyone who will listen that if government spending isn’t brought under control SOON that the resulting calamity when our econmy collapses will be utterly crushing to America. And the collapse is coming sooner than later.

Nice job, Mr. boosh.

Is Blunt channeling the John Lovett character?

Yeah, yeah, that’s it, that’s the ticket (in John Lovett voice)

I’m starting to regret getting that 7/23 ARM on our new house.

But the fact is, we really had no choice — we were living next to two drug dealers (one of which was in a shoot out a few weeks ago), and there was no way in hell I was going to raise my son in that neighborhood.

So we, like so many Americans, are going to have to pray that something is done, lest we foreclose and wind up homeless. We have no savings thanks to $15K in medical bills, our insurance premiums have gone up by 60% the last three years, we’re paying 40% more for utilities and fuel, and going back to school would be nice if tuition didn’t keep rising by double digits damn near every year.

Quite frankly, all those who talk about how great the economy is can take a 12K Dow and shove it up their ass, because a vast, overwhelming majority of people are living hand to mouth. (I blame it on the lack of manufacturing jobs and insane executive pay, but that’s probably for another thread.)

Housing, CB—you forgot about the American housing market. According to recent reports, the median price of an existing house on the market today is 9.5% lower than it was a year ago. Demand for housing is at an all-time high, but the prices are starting to fall. Hell’s bells—record demands precipitate a nine-point-five price drop in twelve months? I’d call it the beginning of a bubble-implosion….

Steve,

You are correct. My finance buddies tell me that the housing market imploded some six months ago when the East/West Coast housing prices peaked, but any building starts are brought on by housing makers trying to encourage folks to buy.

Also, we have large layoffs in Canadian lumber mills right now which is rather disturbing for the fact that a large % of our product goes to the US.

Anney,

The MSM has a vested interesting in telling folks to buy buy buy (no one buying means no commercials means no revenue) like there’s no tomorrow thus they won’t say things are bad until it is too late. Why do you think that many of the Asian nations have switched to buying Euros and other currency?

The only thing keeping the US buck up is the fact that the rest of the world has majority of their savings in US greenbacks and can ill afford to have them become worthless.

In yesterday’s WashPo (Outlook section) Jacob S.Hacker (Yale University professor and New America Foundation fellow) makes an interesting observation about why America-at-large is not responding to GOP’s rosy view of economy. The article, titled: “It’s Not the Economy, Stupid”, claims that the sour mood is due to insecurity about the future. You may be doing OK today, but you still remember the disaster that hit you (and many close to you) yesterday. And you have no guarantee that another disaster won’t hit you tomorrow. Given that your wages are basically stagnant and your expenditures constantly increasing, how are you going to cope, even if you do manage to hold onto your job?

Worth reading:
http://tinyurl.com/y7l5sz

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