WSJ: economic expansion continues, Eeyore in denial

In addition, many people that had stopped looking for work months ago are now looking again, which serves to keep the unemployment rate higher because they are now being included into the workforce again. Of course, it was their dropping out of the workforce in the first place because they couldn't find a job that allowed the unemployment rate to remain steady and even decrease when jobs were still being lost just last year.

 

actually completely factual. i never brought up nixon, so you using that a rebuttal to me doesn't make sense and is a separate point entirely. furthermore, you would be wrong to say that carter did not implement price controls during his administartion.

i don't know why everyone is jumping on me here. i'm not supporting either side here, just trying to set the record straight on some of these these economic issues.

 

You understand that these numbers are net gains, right? They factor in the jobs lost, as well.

Take May: If 150K jobs were lost, then 398K jobs were created, coming up with the reported net gain for the month of 224K.

The unemployment rate has stayed essentially the same because more people are entering the labor force who weren't in it before (either they'd given up looking or they're coming of age or whatever).

233,000 people entered the labor force in May alone. Nearly 3.2 million people have entered the labor force since Bush took office.

I figure you actually know that and I'm just misunderstanding what you're saying. So, I apologize for my tone if it's offensive and/or condescending.

 

And until that time, GWB can be beaten squarely around the head with the negative job growth FACT. Going positive that late in the campaign won't be that beneficial. GWB certainly won't be running ads in October touting his positive job growth, for the first time in his presidency. The Kerry rebuttal ads would be brutal.

What is infinitely more important is what the average American in the battle ground states thinks his/her current job security is and his employability in the current job market if he/she is let go. If he/she is upbeat about the economy and the job market come November, GWB stands a good chance of being re-elected, even if GWB's overall job growth number are not or barely positive.

 

I was just noting that it wouldn't really take a "miracle" as stated to get the job growth into positive numbers, especially when you consider that the term goes through most of January. Chances are, Bush is going to finish his first term in the positive column (may even get it up to 1 million net jobs added by the end of January, which would only beat Eisenhower's 2nd term on the chart posted earlier... which is out-of-date, as well, by the way).

Whether the current trend helps his re-election efforts is not a question I was attempting to answer.

You're right about the perception being the key. I mean, look at the first Bush's job numbers. The economy had created 2 million jobs since that Bush took office by the time the election rolled around in 1992, but it didn't get him re-elected because the perception was that the economy was very, very bad.

 

We are saying the exact same thing.

I understand that they are net gains, but I am talking about is per capita gains.

The labor force itself expands by 150k each month, or thereabouts. Therefore, in order to maintain roughly the same level of employment as when he took office, there would have to be about 1.8 m jobs created per year (7.2 million over 4). If you want to judge the economies performance over 4 years in terms of job creation, I would think the 7.2 million number is more appropriate than the 0 number.

 

To what did Carter foolishly attempt to apply price controls?

I sure don't remember it, if he did. I do remember Nixon doing price controls to stem inflation.

 

So it was that I misunderstood what you were saying.

You may be right about your number being more important or more accurate a picture, but it ain't the number that gets used as the standard. Everyone gets judged next to the standard, for better or worse.

 

Well, for one, his administration drew up wage-price guidelines for businesses. here is a link to a general article about it. (nothing fantastic, just the first article that came up on a google search as an example)
http://www.independent.org/tii/news/800100Higgs.html

I agree with you that the Nixon administration was the architect of most of the disastrous price controls of the 70s, but there clearly were price controls during Carter. He should be commended, however, for lifting a number of them in late '79 as he realized what a disaster they were.

EDIT: I just noticed this. If one reads a bit into the article one will find a interesting reference and quote from a special someone who is unfortunately influential today in other ways . . . Donald Rumsfeld.

 

In my opinion, the loss if jobs in the Bush years was caused by the internet burst, which actually started before he took office, and 9-11, which slowed down the recovery.

Seems like his policies on the tax cuts and such have reversed both of those trends and we will recover most if not all jobs.

Sounds like he has done a good job on jobs.

 

What I would like to see is an analysis of jobs created vs. deficit increase, because I have the sneaking suspicion that the policies implemented to spur job growth have come at an enormous price to be paid down the road.

 

True. The idea of cutting taxes to spur economic expansion is valid but the without cutting spending the short term results are deficits and rising interest rates. Combine these with inflation in commodity prices from sources outside of American influence and it will be very hard for American companies to grow their earnings.

That's bad for the stock market, bad for job creation and more importantly, bad for me. Now, the economic expansion in China does keep consumer prices low (whatever happened to the 'American Made' advertising from Walmart) But I would propose to you that the huge amount of liquidity released by the refinancing of home mortgages will soon dry up but the amount of consumer debt in America is still rising.

So. slowing economic growth, commodity inflation, increasing debt, greater worldwide competition... in my mind things look tough a year or two down the road.

But Bush will be safely in office

 

The other really scary development.

 

agreed. i really believe that this could be disastrous if household debt continues to spiral out of control. the lack of savings is hurting the financial sector overall and because the U.S. economy is so driven by the American consumer, if the debt becomes out of control, the economy will be seriously affected.

 

If it's dangerous to the American economy for American households to run up huge debts, why is it acceptable for our government to do the exact same thing on a much larger scale?

 

well in short, it's not, but I believe a more appropriate response to your question would take far too long to type than I am willing to do and would involve a lot of economics. Government debt is ok in moderation and is not such a bad thing. however, current deficit levels are absolutely dangerous and are not sustainable without increased interest rates in the future. It isn't acceptable for the budget deficit to remain as high as it currently is but the problem is that nobody in the international financial markets is really making a big deal about it. The dollar has dropped during the last year but not far enough to suggest that the international community has lost confidence in the dollar.

The U.S. economy has actually benefitted in the short term because the lower dollar exchange rates have benefitted U.S. exporters be more competitive than they were during the "strong dollar era." Until overall debt approaches levels that are deemed unsustainable by the international financial markets, U.S. politicians will be unlikely to make significant moves to address the debt issue because of its insignificant political weight.