I didn't apologize to you. I admit that my post was more ascerbic than yours, but I stand by it fully.
Oh no -- I'm not offended. I'm entertained. But I have to call it like I see it, in terms of diction. It's sort of my obsessive compulsive tick.
It sounds like most are in agreement that Bush cannot be blamed (at least in a primary, direct way) for the economic downturn. These systems (as with most non-linear systems) have long time constants and a myriad of variables. Therefore, by the same token, we cannot paint a simple cause-and-effect relation between tax cuts and the latest fluctuation (which may or may not be a trend). This could be little more than a mild sub-correction of the major correction.
Every single economic report or Wall Street piece cites the tax cuts as being a major contributor to last quarter's growth. This is not me going out on a limb and making a correlation individually. This is the entire financial community making a correlation.
Agreed. I would argue that targeted middle class tax cuts would have a bigger impact on the economy than supply side style tax cuts have had, but that is too difficult to prove beyond doubt. This point was one of many made by Krugman in an article posted a while back.
Absolutely. However, Bush CAN be blamed (in part) for the next recession (later this decade), which is going to be exacerbated by humongous, back breaking budget deficits (which cause crowding out of private investment, will disrupt current/capital account balances, etc) The great part for him is, he'll be out of office then. Buy now, pay later!!!
BTW, as one of those responsible for derailing this thread, I will hereafter not talk about Bush or the economy in this thread, which is about rail. T_J, if you want to present the evidence you claim you have, start a new thread with it.
I think that many of you who continue to display your ignorance about the economy really need to understand what you are talking about. Though I disagree with many policies of the administration including the Patriot Act, its arrogance in international affairs and its unwavering support and handouts to Israel; what the administration did was create an environment with easily attainable, cheap money to stimulate the economy. Because of the fiscal and monetary policy coupled with a natural swing in the economy that no party can control, the economy is looking much better. Billions of dollars were invested into corporations in the late 90's to create higher technology driven efficiencies in the workplace. The result was an enormous growth in worker productivity and the resulting 'jobless recovery' in the first stage of its return. The primary factor that increases GDP is worker productivity. Though unemployment is a hot political topic it is not as much of an issue with respect to economic gains. The economy is not that far off from the efficent rate of employment. Contrary to what many of you might think, 0% unemployment is NOT a good thing. A job market is needed to keep worker productivity high and to stifle wage cost inflation. As corporations start to see the return in profitibility and the strength returning, more jobs will return as they have recently. Now in regard to the Rail issue, I am firmly against it because its cost does not outweigh the benefit. A revamped Metro system can save tax payers significant funds and allocate more towards the roads in which the real problems occur. I have yet to see an overcrowded downtown bus, yet the traffic conditions are horrible. Inefficient use of funds on a project that will not relieve the true conjestion on the Houston highways.
I do understand that. I still stand by my basic picture of the market as a complex, highly non-linear system. It would seem to benefit the financial community to make the tax-cut-to-yea-happy correlation as strongly as possible. At any rate, I'm not saying a connection doesn't exist, but it appears nonsensical to ascribe a magnitude to the causality. Trivial? Primary? Secondary when compared to the cumulative effect of sustained record-low interest rates? Inconsequential when compared to fickle mass psychology? Guesswork. Just my take, as an outsider. If the markets keep "soaring" and jobs are actually recovered, GWB will reap the benefits in the polls, even if the tax cuts are not primarily responsible.
When I talk about the economy I am not talking about a return in the stock market price. I am talking about the growth in GDP (Gross Domestic Product) and factors such as corporate earnings and worker productivity that create future gains in GDP.
*trying to bring thread back to talk about light rail* I'm glad the rail passed, but one thing I don't understand is why the system is being set up the way it is. The roads are pretty packed already, and the train does take away from that somewhat. Why didn't they propose building an elevated train? I would think that it would be more space-efficient. I was driving down main street the other night and accidentally followed a couple of cars right onto the tracks without realizing it, where the road and rail curves (by all the flower shops between downtown and the med center). I've seen other people do this, too. I think hopping those bumps to get back on the road screwed up my alignment. I hope that doesn't happen when a train is on it; even if it's a "light" rail that wouldn't be pretty. I have already seen a couple of restaurants going up in the not-so-nice areas of town next to the rail. I would think TJ and FDK would be all for economic growth and the "trickle-down" effect.
Great post, FD Khan. The liberals don't have the latest economic news since their Sierra Club magazine was late this month.
If you have never seen a crowded bus in Houston, it is obvious that you have not ridden much at all. When we were a one car family and I was working downtown, the Galleria, and Greenway, I took the bus every day for nearly a year. In the morning, there were often crowds to get downtown and I often had to stand on the buses between downtown and the Galleria and Greenway. Higher capacity rail systems can help to alleviate many of the crowding problems and will move more people than the buses will. It will certainly take time for people to shift their transportation preferences, but given the chance, it is likely that a rail system will see significant usage. Even a small decrease in the number of cars on the road will help more than simply paving metro Houston.
Although I am not TJ, most every article I read concerning the 3rd quarter growth cited the tax cuts as the compelling reason that consumer spending was up. Here is an example: http://abcnews.go.com/sections/business/WorldNewsTonight/3Qecon_boost031030.html (specific paragraph): "Most economists say President Bush's tax cut played a big part in Americans' third-quarter spending spree. "Out of the 7.2 percent growth, if you wanted to parse it out, you'd have to argue that at least a percentage point — probably closer to two percentage points — could be attributed to the tax cuts," said Bruce Kasman, an economist with J.P. Morgan." The article further goes on to say that the tax cuts probably won't contribute to long term growth and that jobs are needed.
Khan, You still have not commented on all of the additional benefits the Metro plan gives besides rail. Are you ignoring it?
