Once again, it's the economy, Stupid!

Yea, and now that I think about it, I think I might have asked you that question before.


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The economy is a very complex thing. I don't really think Presidents by themselves can do all that much to help or hurt it.

Presidents can affect one thing very much: Consumer confidence.

Note that our economy has been at its best in recent years under Reagan and Clinton - two guys who had the charisma and ability to make people believe things were going to improve.

Conversely, Presidents who talk down the economy (Bush) can help create those results, because so much of the economy is built on expectations. Now, this recession didn't necessarily fit that profile because it was not really consumer-based (initially), but talking about how horrible things were going to get certainly did not help it.

The President's biggest role in economics is to project an aura of confidence in the future. Bush doesn't do that very well, in my opinion.

 

I am forced to direct you back to *another* one of my classic pieces on the Clinton recession:

CASE CLOSED

 

Is this your funny way to say that YOUR MIND iS CLOSED?

Professional economists disagree with you.

BTW my nonprofessional eye sees slowdown, not recession, in the GDP graph you referenced.

 

You are DEAD WRONG. This is absolutely irrefutable evidence that George Bush inherited Bill Clinton's recession. A recession is defined as two consecutive quarters of GDP contraction. The recession began while Clinton was in office in January 2001, as you can clearly see in the graph.

 

You are being too kind. What bothers me about how Bush went about getting his "mandated" tax cuts was his motivation. He promised tax cuts to rally the right in the election. Getting those tax cuts was his payback to his supporters. Dogging the economy was the means to the end. I expect more from a President of the United States. I expect leadership and integrity. Bush displayed neither.

Here is another example of the lack of leadership from Bush. During his Presisdental campaign, Bush needed a reason to expand military spending. Russia had handed us back the black hat, so Bush attempted to give China the black hat during his campaign. It is no big surprise how China acted after Bush got elected. And will it being any surprise if China vetoes any US written UN Security Council Iraq resolution?

 

1. He promised tax cuts because I think he believes tax cuts are due...and a good way to stimulate the economy. Are you seriously making the argument that he was lying when he "dogged" the economy, so he could get elected? All indicators were pointing down...it's called realism. In the wake of a president who told us we never had to deal with the downs of the economic cycle again.

2. China -- do you think China would have supported this even without their feelings on Bush? somehow i doubt it...china doesn't have a long record of supporting any efforts of the United States..particularly when they involve the military.

 

I thought recession was not 2 consecutive quarters of ecomomic contraction, but two consecutive quarters of less than 2% growth, or 2.9% growth. I can't remember the exact figure.

The economy was slowing down when Bush came to office.

The economy was not in a recession. I will admit it would have been hard for anyone to keep the country out of a recession the way things were headed.

Bush's supply side incentives don't seem the best way to combat the situation, but he's the president.

The democrats have no real room to argue and appear to have lost their backbone.

They haven't put up an alternative budget, they are afraid to stand up and say no to Bush's tax cuts, and are afraid to stand up against the Iraq war drum beating that's going too. They haven't presented themselves as being leaders.

I hate the idea that we've resorted to deficit spending, and again our increasing our debt. In the past that has been horrible for the economy. I won't totally blame Bush for our economy now, but I will in the future if it keeps heading in this direction.

 

I am DEAD RIGHT The National Bureau of Economic Research also disagrees with you.

Try this one for size:

http://money.cnn.com/2001/11/26/economy/recession/

Economists call it recession

November 26, 2001: 1:58 p.m. ET

Panel says downturn began in March, ending record 10-year span of growth.

NEW YORK (CNN/Money) - The world's largest economy sank into a recession in
March, ending 10 years of growth that was the longest expansion on record in
the United States, a group of economists that dates U.S. business cycles
said Monday.

The National Bureau of Economic Research (NBER), composed of academic
economists from Harvard, Stanford and other universities, joined a chorus of
economists and investors who were saying that a recession had already begun.
The group posted its decision on its Web site.

It ruled that the long expansion ended in March and the nation's tenth
recession since the end of World War II began at the same time. The
declaration means the longest expansion lasted exactly 10 years. The
previous record for uninterrupted economic growth was set in the 1960s, a
period of eight years and 10 months lasting from February 1961 to December
1969.

At the White House, President Bush, whose father lost the White House partly
as a result of the country's last recession, said the declaration added
urgency to the need to get a package of economic stimulus measures approved
by Congress and passed into law.

"I knew the economy was not in good shape right after I took office," he
said. "We will do everything we can to enhance recovery."

The president called on Congress to move quickly to pass an economic
stimulus so that he will be able to "sign it before Christmas."

The NBER panel is composed of six economists, including Martin Feldstein,
who served as chairman of former President Reagan's Council of Economic
Advisers.

"The NBER's Business Cycle Dating Committee has determined that a peak in
business activity occurred in the U.S. economy in March 2001," the panel
said in its announcement. "A peak marks the end of an expansion and the
beginning of a recession."

The country's last recession begin in July 1990 and lasted until March 1991.
But he NBER did not officially declare the downturn over until December
1992. Democrat Bill Clinton used the economy's troubles as a major weapon in
his successful campaign to unseat the first President Bush in 1992.

The group also said the economy might have been able to avoid a recession
without the impact of the Sept. 11 terrorist attack, which all but shut down
the economy for several days and has had a lasting impact on tourism, the
airline industry and other businesses.

"The attacks clearly deepened the contraction and may have been an important
factor in turning the episode into a recession," said a statement from the
private, nonprofit, nonpartisan research organization.

The most common definition of a recession is two or more quarters of a
shrinking economy; the nation's gross domestic product, the broadest measure
of economic activity, fell 0.4 percent in the third quarter and many
analysts said it is probably declining more sharply in the current quarter.

NBER's statement said its determination of a recession is based on monthly
rather than quarterly data that it believes are a more accurate gauge of the
state of the economy. "The committee gives relatively little weight to real
GDP because it is only measured quarterly and it is subject to continuing,
large revisions," the group said.

The NBER cited a number of factors in its definition of a recession,
including declines in employment, industrial production, incomes and sales.

Some analysts believe the current downturn could be over soon, with the most
optimistic calling for a rebound in the first quarter of 2002. Others say
the rebound will not come until late spring or early summer.

Ben Bernanke, a member of the panel, told Reuters that based on historical
data from previous post-war recessions, the U.S. economy is likely to begin
a recovery by next July.

The Federal Reserve has cut interest rates 10 times this year - three of
those since Sept. 11 - in a bid to keep consumers spending and help lessen
the severity of a downturn.

 

Not so he could get elected. Just so he could push the tax cut bill through Congress. And yes I would be saying that he lied about his motivations for the tax cut after the election.

 

You are DEAD WRONG. This is absolutely irrefutable evidence that George Bush inherited Bill Clinton's recession. A recession is defined as two consecutive quarters of GDP contraction. The recession began while Clinton was in office in January 2001, as you can clearly see in the graph.

For someone who claims to know something economics, you don't seem to understand graphs very well. Your graph shows that in Q1 2001, we had negative GDP growth. Q1 is not equal to January, in case you didn't know. From that graph, we know nothing about whether the recession started in January, February, or March. As such, we have no idea if the recession started under Clinton or Bush. Nice try, though.

 

Well, I'll tell you that I do understand proper grammar. That makes one of us.

The recession began in Q1 2001, as I correctly stated. Bill Clinton was the president in January 2001. You don't seem to understand months very well. My point stands. This is perhaps the weakest argument I have ever seen you post.

.....yawn.....

 

The recession began in Q1 2001, as I correctly stated. Bill Clinton was the president in January 2001. You don't seem to understand months very well. My point stands. This is perhaps the weakest argument I have ever seen you post.



Do you seriously not get this? If the recession started in February 2001, you would be incorrect in stating that the recession started during the Clinton term. Your graph does not state whether the recession began in January, February, or March.

You still apparently haven't figured out that Q1 is not the same thing as January 2001.

In fact, as No Worries posted, the recession may have started in March 2001, which would mean Clinton was clearly not in office at the start of the recession.

 

Not to get involved in this argument because I don't particularly care, but even if we were to say that the recession started definitively on March 31, 2001, couldn't we still call that an inherited recession even though Bush had been President for just over two months?

Or does the economy react so swiftly that the bulk of the cause of a recession that began in March was based on things that happened since January 20th?

Of course, I don't believe the occupant of the White House has all that much influence on the economy anyway. But it does seem silly to argue that the recession wasn't, at least in some large way, inherited. It just isn't possible to drive the U.S. economy into the ditch that quickly. It's likely not possible that the recession could've been averted even if Clinton could've had a third term (or if Al Gore had taken office in January instead of Bush).

 

Not to get involved in this argument because I don't particularly care, but even if we were to say that the recession started definitively on March 31, 2001, couldn't we still call that an inherited recession even though Bush had been President for just over two months?

You could certainly argue the trends and such. My point was in this statement:

The recession began while Clinton was in office in January 2001, as you can clearly see in the graph.

Which just isn't true, as the graph shows nothing of the sort. It annoys me when people try to support arguments using statistics by purposely (or even accidentally) misinterpreting the numbers and twisting the data around.

 

I'm with you, though it seems like a silly argument to get into, especially since it's seemingly arguing about why he's right rather than if he's right. It's really a side issue at this point when the recession started and who's fault it is. But I admire your willingness to continue to argue based on the principle of the thing. I'd have called him a bad name and bailed out some time ago.

On a different point, I'd like to say I also agree with your President's potentially affecting consumer confidence point you made in a different post.

 

I'm with you, though it seems like a silly argument to get into, especially since it's seemingly arguing about why he's right rather than if he's right. It's really a side issue at this point when the recession started and who's fault it is. But I admire your willingness to continue to argue based on the principle of the thing. I'd have called him a bad name and bailed out some time ago.


Yeah, you're right about the pointlessness of it all. The name-calling thing was tempting, but I tried to argue common sense first. With T_J though, that doesn't always work. He's used the number-twisting thing on more than one occasion, so I have to continue to point it out when I see it.

On a different point, I'd like to say I also agree with your President's potentially affecting consumer confidence point you made in a different post.

This is the only area that I think a President has a real effect on the economy in the short-term. I don't think Gore would have done any better than Bush in this regard, although I do think Clinton (and McCain) would have done better. I'm not sure if it would have been enough to avoid a recession, but it may have softened it some. That said, since this wasn't so much a consumer recession, the President may not have had any impact in this particular case.

 

With the Democrats basically sucking all around, it's going to make 2004 very interesting. Up until now, Republicans could just blame gridlock on not getting things done. From now to 2004, Republicans have to both produce and produce things that people want. It was a disaster for Democrats in 1992 resulting in the huge Republican takeover in 1994. I wonder if the Republicans learned anything from that.