http://www.cnn.com/2003/ALLPOLITICS/10/30/bush.economy/index.html

The United States' GDP (Gross Domestic Product), one of the clearest indicators of the strength of our economy, rose 7.2% in the third quarter, the highest it's risen since the 80's. George Bush is attributing this entirely to his tax cuts. Everyone can agree that the GOP are milking this for all it's worth, and dancing a big "I told you so!" to every left-winger within shouting distance. I can't say that I blame them; this is a major victory for the Republicans.

My question to you is: Can Bush really make this claim? Or did other factors contribute this surprising and sudden boom. which may very well be a temporary fluke? Or, did Bush's policies have any effect on it at all and he's taking credit for something that would've happended anyway?

Your thoughts. (Hello in advance to Chandos and Ragusa ;) )

My belief is that a President gets entirely too much credit and blame for the economy.

I expect the 7.2% number to drop (as it always does no matter who is Pres) and end up at 6-6.5%, which are still very good numbers. I would anticipate naysayers pointing to job growth statistics but I'll preempt by pointing out that jobs lag GDP. This may be espescially true since inventories are down which should spur manufacturing.

I think this is undeniably good news. I don't think Bush gets the credit but then I don't think he got the blame heaped on him either (except for Steel Tariffs - what a horrendous idea).

Damn - Laches beat me to it. I've gone on record here before as saying Presidents get way too much credit and blame for the economy and this is no different. If anyone thinks that there is a direct cause and effect relationship between cutting taxes and economic growth at the speed that we are seeing, I want whatever drug they are using.

So then, based on both your answers, is Bush wrong in taking the credit for it? It seems to be the case, but I may be missing something.

This also brings up a funny political arguement. Whenever the economy is going bad, the political party of the Pres (at the moment, the Republicans) say "People give way to much blame to the President..." But when things are going great, like now, they say "See? If only the Dems had listened to us. Stupid Democrats!"

The same goes on both sides.

Hello Death Rabbit,
growth is a nice thing but it isn't always a sign of improvement. In a free hour I yesterday went to an economics lecture, to learn that growth for example benefits from stuff like car accidents* (as they fuel lawyers, insurance companies, experts, repair works, hospitals ...). Insofar there is always the question of "quality" of growth ...

A part of the US growth is probably induced by the massively increased US government spending - in areas like iraqi reconstruction, and defence procurement especially. So the question is if the numbers actually hint on a qualitative improvement and if this growth is sustainable.

And as above, I wouldn't laude Bush for it. It is amazing how much trust people in their leaders. In Germany people regularly demand jobs from the chancellor - as if he could create them ... "Abracadabra ... there you are!" :rolleyes:

* ... suggesting to actually build poorer and less safe cars and products for the future in order to boost the economy ... :evil:

[ October 31, 2003, 21:00: Message edited by: Ragusa ]

So then, based on both your answers, is Bush wrong in taking the credit for it? It seems to be the case, but I may be missing something.
Bush is a politician for taking credit for it. Like Clinton took credit for the stock markets rising due to technology growth in the 90's. Bush has been under attack, as evidenced by these boards, for the economy so it shouldn't be surprising that when it starts to do well he will attempt to take credit for the good news.

It also isn't surprising that those who dislike Bush will quickly move to try to dampen the news and try to say that it isn't really good news for various reasons. It's politics. Those who dislike Bush will blame him whenever they get the chance and won't ever give credit. Likewise, those who like Bush will deflect criticism whenever possible and take credit whenever possible without ever admitting fault. (This goes generally and not at anyone specific)

It is, unfortunately, the nature of the game in this and every nation where officials are elected. To single out person X as being wrong in a particular instance is like saying it is wrong for a baseball player to slide spikes first into second - it isn't really nice but it's part of the game. Don't hate the playa', hate the game.

Edit to add:

A part of the US growth is probably induced by the massively increased US government spending Defense spending in the third quarter was flat. The surge was due to personal consumption and corporate expenditures.

[ October 31, 2003, 23:12: Message edited by: Laches ]

I dont think I have said it here before but I tend to say it a lot in real life to friends and relatives. The economy is more or less an entity of its own which goes wherever it pleases. Everything a government can do is to gently try to prod it a little bit and hope that it might affect it a little bit.

An easy way to see how little what government a country has affects its economy you can for instance compare Sweden and the US, two countries that have had vastly different political leadership with very different priorities but yet they have experienced roughly the same economic stages, when it is up in the US it is up in Sweden and when it is down in Sweden it is down in the US. The only thing a government can do is more or less to decide how the money they get is to be distributed, not how much money there is in the first place.

I like to see the economy as a global bull that tramples across the world with a bunch of people hanging on to its back trying to steer it, some are heavier than others and quite often the people cant agree on which way to try to steer it but the bull always brings all of them to roughly the same place.

So, no Bush doesnt deserve much credit for the rise of the GDP nor does he deserve much blame if there had been a decline. What he could be blamed for is how the money is distributed but that isnt what is discussed here.

Interesting thing about these tax cuts...they amount to no more that $5 to $10 per bi-weekly pay check. Hardly the fodder to fuel a stumbling economy. The tax credits are more substantial, but that basically is money that we are getting now, that we won't get when we file our taxes in 2004. I think that is when a lot of people will look at the reductions in the Child Tax Credit (because it has already been given) and think that they are being ripped off.

Tax cuts fueling the economy and the growth we have seen in the third quarter?...I don't think so. Can Bush take credit for it?...why not, he is at the helm, let him take credit as he will surely take the blame if things turn sour. In reality, I think that this "recovery" is America returning to the path it was on prior to 9/11.

I have seen so many facets of business picking up and moving on, facets that had ended abruptly with the terrorist attacks. In all truth, I don't think that the world has yet seen the immensity of a healthy and powerful American economy. It's all just business as usual, where we should have been two years ago.

Hello, DR -

I could care less about those numbers. The real concern many of us have is in several other areas, which the president and congress have a lot of influence over, despite the denial of some others who should know better:

1. How many childern are having to grow up and survive at, or below the poverty line. Many are childern of the working poor, such as single mothers, and they lack the very basic needs.

2. Can the elderly get decent health care and the medicines they need to spend their old age in a degree of comfort. Many of them are having to resort to buying medicines outside of the US where they are more fairly priced. The government goons are trying their best to stop them, probably at the behest of their large donating clients (the drug companies).

3. How many are still unemployeed and what are the wages and benefits that they have to support themselves and their families. This is always critical for those of us who are labled as "liberals and progressives." The numbers have little to do with the stock market and Wall St. cronies; but those large corporate fat cats who take care of themselves while laying off thousands of rank-and-file workers.

These numbers on uemployment showed great improvement during the Clinton years. But the wages were mixed, because many who were employeed had low paying jobs. Despite republican rhetoric, Clinton only has average grades from those of us on the left because of the wage situation and the increase of childern who fell below the poverty line during the 90s "boom years." He did try to help in terms of healthcare but was blocked by the large industry providers and their conservative minions in congress.

The numbers you cite are probably slick numbers for CNN and Fox News healines, but are wasted on those of us on the left who have larger economic concerns than Wall Street and Walmart profits.

[ November 02, 2003, 05:58: Message edited by: Chandos the Red ]

I tend to agree with Chandros here. What use is economic growth, what use is the rich becoming richer, if there are hordes of those living in poverty. A country should work at providing for all of it citizens, or even better, to structure things in such a way that all of its citizens are enabled to provide well for themselves readily, and encouraged to do so.

The average and median income in the US are at historic highs even when adjusted for inflation. Also, the number of uninsured is constant over the last few quarters with statistically insignificant fluctuations up and down but also at or near highs (Edit-or at lows I mean, what a putz I am). And the percentage of those below the poverty line has been steadily decreasing since 1996 and is this year at a historic low for all races and for each race individually.

I saw this from a WaPo chat a couple of years ago, still relevant:

Dr. Kirk Johnson: The economy is undoubtedly reacting to a number of things simultaneously. First, even before September 11 the economy was already fairly anemic - the Gross Domestic Product (GDP) only grew by 0.3 percent in the second quarter. Second, most economists agree that the terrorist attacks either sent America into our current downturn or made it worse.

Presidential administrations always want to take credit for a good economy and blame someone else if it falters, but there really is not a substantial amount that the President can do to either grow or sink an economy. Pro-growth policies may be suggested by the President, but Congress must pass the bills before he can sign them. Also, Alan Greenspan and the Federal Reserve Bank Board of Governors' Open Market Committee wield a great deal of influence into the economy.

In short, a number of actors affect what happens to the economy, but two-third of the economy is directly affected by consumers and the extent to which they spend money.


--------------------------------------------------------------------------------

Washington, D.C.: Is there a target or ideal unemployment rate? How significantly above that are we?

Dr. Kirk Johnson: Economists like to talk about a "natural rate of unemployment" that, depending on the economist you ask, hovers around six percent.

The single most important thing to stress about the unemployment figures released today is that the unemployment rate is still very low by historical standards. Over the last forty years, there have only been thirteen years where the average annual unemployment rate has been less than 5.4 percent, and four of those were from 1997-2000 (the other were 1964-70, 1973, and 1989). Even during the boom years during the Reagan administration, the average annual unemployment rate did not drop below seven percent until 1987.

The low unemployment rate over the last several years is certainly not the historical norm. That said, it has been very good for people who want to work, but employers were finding it increasingly difficult to find quality workers for a whole host of positions, especially low wage workers. The rising unemployment figures should taper off once the country rebounds from the current economic stagnation.


Current unemployment is ~6%.

Edit - the edit ate the post, maybe it's fixed.

[ November 03, 2003, 15:17: Message edited by: Laches ]

Laches - If your post is in reply to mine, then let's get a few things clear up front: To begin with, I could care less what Kirk Johnson says. I have no idea who he is, but if he thinks the Reagan years were "boom years" then I would like some of what he's been smoking; it must be some strong stuff. Second, if you have some specific figures you would like to share to show how great this economy is for the working poor, then my all means post your sources so that we can see whose numbers they are, and if they are reliable or not. I have already discarded the ones on unemployment because its tenor diminishes the suffering of those thousands who have lost their jobs since Bush has become prez. Saying that they can't expect good times all the time is not an answer they should accept. I certainly don't think that what unemployment was 30 years ago adds anything to the debate, except to make excuses for Bush's poor performance as president. How many new jobs have been created since Shrub took office anyway?

The problem with using statistics is that it comments on the one using them more than on any test in reality. If any amount of childern are suffering in my country then it is unacceptable. If there is an amount of people who can't get healthcare then that is unacceptable. People are not statistics and neither is their suffering.

[ November 03, 2003, 01:26: Message edited by: Chandos the Red ]

Sometimes you have to look at the big picture - this isn't Nirvana. You can find the stats using the most recent census figures and department of labor figures.

The problem with using statistics is that it comments on the one using them more than on any real test in reality. * Twirls moustache.

Sorry, Laches - I've been very cranky from no sleep. The new baby has been keeping me up nights. But I think that using statistics in these terms diminishes the impact that economics have on the disadvantaged. To say things are better doesn't help those kids who go to bed hungry every night. And if things are better it is not likely the result of "conservative compassion." Or whatever it was that Bush labled it.

Hey Chandos, congratulations on a new baby. I gurantee that they can change your life...maybe even make you Conservative if you don't watch out ;)

Thanks, HS. But this is my second and I'm more to the left than ever. But nice try. ;)

From a very cynical point of view, I have to say that the tax cuts are working perfectly - realizing, of course, that the motivation behind them has nothing to do with spurring economic growth, and everything with getting Dubya re-elected.

Thank you, Rally...you've illustrated my point beautifully.

*tosses a rose her way* ;)

Congrats on the new baby as well, Chandos. I have to weigh in here as well on the issue of statistics versus humanity. If the poverty rate drops from 15% to 13%, that's cause for a celebration, even though 13% is still a bad number. But the cut is still good!

As for the tax cuts, well, maybe they spurred growth, maybe they didn't, but as has been mentioned before, OF COURSE Bush will take credit for the improvement! He's a political animal, and any politician, Republican, Democrat, Communist, Fascist, Independant or whatever, is going to try to take credit when things go well. It's the nature of the beast.

Well, this thing was humming merrily along without much to disagree with but then I have to disagree with this:

I have to say that the tax cuts are working perfectly - realizing, of course, that the motivation behind them has nothing to do with spurring economic growth, and everything with getting Dubya re-elected. I'll speak generally here. I think many, even most, politicians actually really do want what is best for the nation. They just disagree on what that is and how to get there. Now, they also want to be re-elected. It seems to me that you're far more likely to get re-elected if the economy is doing well. If you're a politician, it is not only good for the nation but in your own best interest to try to get the economy to do well.

The quote above makes it look like the tax cuts were enacted because it would lead to a reelection and not because they would help the economy. I personally believe that those favoring tax cuts really do believe they spur the economy. Helping the economy helps them win reelection.

Bush and his administration honestly believe, imo, that tax cuts will help the economy. There is no divergence in the aims of helping the economy and getting reelected - they go hand in hand.

Now, I don't know that Bush and his administration really believe the recent spike in the GDP are because of the tax cuts; there isn't any way to really know their sincerity. In October of 2001 though Bush was arguing for tax cuts saying they'd help spur the economy. Meanwhile Paul O'Neill was arguing for global tax stimulus plans to help the global economy at a G-7 conference.

I may be a little different than most - maybe I'm naive. I really do think most in Washington really do want what is best for the nation. I've had the opportunity to observe (not participate in) lobbying from the inside and talk to both sides regarding various issues. I really believe that Daschle wants what is best. I also really belive that Frist wants what is best. There is just disagreement about what 'best' means and how to get there.

Unfortunately, it is easier to assume those one disagree with wear black hats.

I am not one that get overly invlovled with politics or economics. But I must say that it is impossible to provide for the poor, and improve their standard of living by a significant degree. The great majority of people(including me) are not willing to lower their standerd of living just to help a group of people that they may not even know personally.

Wow, I out-cynic'ed Laches! Write this day down! :roll:

Seriously, I agree with the basic premise that every politician is sincerely trying to do what he/she thinks is best for the country. If you can't start from that assumption - regarding EVERYTHING that EVERYONE ever does - what's the point of living? I have to believe that the vast majority of people really do spend their time trying to do the right things.

Call me Pollyanna.

@ Pollyanna - The bad guy never really thinks he's the bad guy (unless he's a psychopath, that is, in which case he doesn't recognize the existence of anyone else). I think that all politicians believe that they are doing what's "right" for the "people." The problem arises when trying to figure out who the "people" are and what is really "right" for them.

There's also an incredible ego factor here pretty much across the board. Put simply, anyone who achieves a level of elected offialdom as high as, say, senator and up often begins to think that he or she is smarter and better able to make decisions that those who put him or her in office. He or she knows what is good for you better than you do. (Maybe this is true, maybe it isn't, but it is definitely offensive.)

I read a great quote somewhere, and I can't remember it exactly, but it goes something like: Beware the man who wants to rule. He may want to rule well and he may want to rule fairly, but he means to rule.

Actually, according to basic principles of macroeconomics, the tax cuts have to get some credit for this growth spurt. I'll spare you the in-depth analysis, but people tend to spend a specified percentage of any change in income (tax cuts are changes in income, as the consumer has more to spend). That change in percentage is called the Marginal Propensity to Consume. So yes, the tax cuts (part of an expansionary fiscal policy) definitely deserve some credit.

Do they deserve all the credit? No. Increased government spending brought on by this fiscal policy, as well as a lowering of the prime interest rate, also deserve some credit. The outlook of business could have played a role.

While all this may be true, anyone that says that the tax cuts played no role in the GDP growth really needs to brush up on economic theories.

Chandos,
1. Quite a few, but socialistic economic policies prove to be counterproductive to economic success. While this may sound harsh, I'm unwilling to sacrifice the standard of living for the masses (most of America is not working poor, btw) to help the few.

2. I don't see it happening. Drugs are an inelastic item, and companies realize that they have customers who will pay regardless of cost. It costs a fortune to research drugs, so they have to charge a high amount to recoup their expenditures.

3. The unemployment rate is often misleading. To get the true number of people unemployed as a result of those 'corporate fat cats', take the current rate and subtract 6% from it. You'll find that the number is not as ridiculous as you seem to think.

I'm going to sound like an enemy to the blue-collar man here, but the truth is is that unions have screwed quite a few people over. Because they demand high wages, companies are going to contract out to other nations where they can get the same job done at a fraction of the cost.

Reagan years were "boom years"Maybe not at the beginning, but there was significant economic growth toward the end of his first term as president.

The problem with using statistics is that it comments on the one using them more than on any test in reality. If any amount of childern are suffering in my country then it is unacceptable. If there is an amount of people who can't get healthcare then that is unacceptable. People are not statistics and neither is their suffering.Agreed, but if you have a workable solution to this problem then I'd like to hear it. Socialism does not work, and most of these people are stuck in a Catch-22 situation. They've got no education, so cannot get a halfway decent job, but to get a good education, you need to come from a fairly good background.

From a very cynical point of view, I have to say that the tax cuts are working perfectly - realizing, of course, that the motivation behind them has nothing to do with spurring economic growth, and everything with getting Dubya re-elected.That's definitely a motivating factor, but let me combat your cynicism. What's the best way to get re-elected? Give a strong economy to the voters on Election Day. No president since FDR has served more than one term in poor economic conditions.

Rastor, actually a socialistic/capitalistic mix as has been used in most European nations work atleast just as good as the more purebred capitalism of the US and a lot better than the pure socialism of the Soviet Union. I just wanted to make that clear.

I would also like to say that according to my quite superficial studies in economics so have Keynes and the derivative theories you refer been pretty much debunked in the last decades. Many countries has tried to follow those principles to no avail, they tend to show some result in the short run but that is mostly due to the fact that they tend to "mask" reality. Give the appearance of what is not true. They are still used mostly for lack of anything else. As I stated before, the economy is a global thing, a bull you can try to prod as best you can but which in the end goes where it will in a rather whimsical way. It is governed by something but that something is a compound of so many variables that it is impossible to make any greater impact on where it is heading. All you can do is pretty much to hope.

But generally the bull is rushing in a direction which is mostly making what you Rastor like to say, making the cookie larger due to human development. The only real question is how to distribute that cookie and how you distribute that cookie has very little to do with how much it grows.

Actually, according to basic principles of macroeconomics, the tax cuts have to get some credit for this growth spurtI'm not sure anyone has said otherwise. I think you'd get a lot of argument about what form those tax breaks should take and what the most efficient means of stimulating an economy via tax breaks may be.

However, speaking for myself, what I mean when I say that a Pres gets too much credit and too much blame for the economy is that I'm unaware of a President yet that put a tax cut into place on his own. He can ask Congress nicely. Greenspan is deeply entrenched. And ironically, public perception may play the biggest role in how an economy does. All these diminish the role of the Pres in controlling the economy in my opinion.

The Pres has little direct control over the economy; steel tariffs are an exception and have I mentioned how stupidly I think they have been used by Bush? ;)

Laches - While I agree with you that both sides believe that they are engaged in what is best for the nation, I still think that large donations have corrupted the system. The drug companies, insurance and banks, energy companies - it's common knowledge that Cheney just about let them write the Bush energy policy - despite the big secret meeting - the NRA, and all the rest are engaged in short-circuiting the democratic system. On the other side, is the dems with the same problem with their special interest groups, trial lawyers, that donate heavily to their quest for power. There are only two I can think of immediately who ran against the Big Money - McCain and Nader - and looked what happended to them.

Those who are buying off the politcians with donations may claim that it is their right to buy the legislative system, but if that is the case than no one would believe that the Common Good of the People is being served by the current crop of so called "Lawmakers."

Nevertheless, I agree with the spirit of your comment. There are still some who believe that one day the trickle down theory may actually work. Of course, I'm not one of them.

Rastor, actually a socialistic/capitalistic mix as has been used in most European nations work atleast just as good as the more purebred capitalism of the US and a lot better than the pure socialism of the Soviet Union.The average growth rate of the European Union in terms of GDP is 0.4% annually. The U.S. averages 3%-4% annually. Care to rephrase how well it works?

BTW, if you think that either the U.S. or the Soviet Union are pure capitalism and pure-socialism respectively, then you really need to do a lot of research on the economies of either.

I've been making my stand on the mixed economy of the US clear for a long time now. I wish we were a pure capitalism, but we aren't. We aren't as much of a mix as Europe, but the United States is a far cry from being a pure capitalism.

I know little about economics so I will refrain from becoming too involved, but such growth rate figures mean little with such an unbelievable debt, and when most of that money is owned by a very small populaion of billionaires - the country in effect is not really better off than anyone, also with a larger percentage of the population worse than their counterparts in countrys with a "worse" economy -and money isn't evreything you know.

Perhaps pure capitalism would be better than the current mix, even though I oppose it's ideals, at least then people could live their own lives and have nothing to do with the government and corporations- but who then is going to stop such corporations from making the jump to millitant dictators? Their influence upon the law (or lack thereof) is allready well noted, and their disrespect for the world around them is obvious.

Pure capitalism? How would you define that? Tell us how it would work better than the current econmic mix of programs we have now. I think the closest we've had to that was before the Great Depression. That fixed any idea of that. Although there were a number of reform programs during the early part of the last century. Nevertheless, they were nothing on the scale of what FDR accomplished. Good thing too - someone had to save capitalism. :grin:

I would have to say that prior to the Great Depression was an example of "reckless Capitalism", but not "pure Capitalism". How can the unrestricted issue of margin to the Butcher, the Baker and the Candlestick Maker equate to Capitalism.

I think that the closest thing to pure Capitalism that the US has ever experienced would be the boom years of the late 80's and early 90's (20th century :) ) The pre-depression era was really just a post-war era and should be viewed accordingly.

HS - That period also saw an expansion of the federal government and its role in providing welfare for large corporations. And a still growing political commitment to entitlement programs such as Medicare and Social Security. If that's your idea of capitalism then we need to rewrite the dictionaries. Keep in mind that anytime the government spends money to create jobs it is a move away from pure capitalism.

Nope I dont care to rephrase that. First off I dont know where you got those numbers and what it deals with and when. Secondly so what I mostly meant was that people have roughly the same standard of living in the US and western Europe. I am sure you could come up with many many examples to prove it otherwise but you can agree on that Western Europe and the US have it a lot better than for example Eastern Europe and South America?

I can admit that I was a bit reckless with my wording, but I never said the US was a pure capitalism, I said it was a more purebred one compared to what I had previously talked about. I did however make the mistake of calling the Soviet socialism pure, which was a mistake of course, but it was as close as anyone has got so I think it still is ok to use it as an example.

See the Nov 4 one, second down:

http://www.usatoday.com/news/opinion/cartoons.htm

I think that the closest thing to pure Capitalism that the US has ever experienced would be the boom years of the late 80's and early 90's (20th century )Let's see, welfare programs, social security, and Medicare existed in those periods, so no, it was not pure capitalism.

Chandos was correct when he said that the closest the US has ever been to pure capitalism was prior to the depression, but even then there were laws restraining business actions, so it wasn't.

unbelievable debtAnyone that even brings the national debt into a discussion about poor economies is either ignorant or off topic. The national debt, created by selling government securities, is an important aspect of monetary policy. A $7 trillion debt means nothing in terms of economic growth.

Nope I dont care to rephrase that. First off I dont know where you got those numbers and what it deals with and when. Secondly so what I mostly meant was that people have roughly the same standard of living in the US and western Europe.The numbers are direct from an economics report in the Wall Street Journal. I can't link to their online site, it's only accessible to consumers.

I won't argue that the lifestyle of Western Europe and the US are comparable. Given the current information, though, I challenge you to say that a generation from now.

To clarify my point...the closest we have come to practicing capitalism in the era of a GLOBAL ECONOMY was in the period that I mentioned. The social programs that you mentioned had existed since the depression period or at least the 1960's. When you compare spending on social programs, adjusted dollars, it was less in 1988 than in 1968. Stretch that period to 1992 and the gap is even larger.

If you consider what social security and medicare were defined as at their conception, they don't even belong in the arguement.

I understand the point that both Rastor and Chandos make, it's just unrealistic to consider anything prior to WW2 as representative of anything equivalent today. There is no way to have any sort of Democracitic efficacy debate, and hold up the functions of a system that is 80 years removed if we are making any sort of comparative arguement.

If you wished to seek a period of true, isolated democracy you would not choose pre-depression, but instead view the Industrial revolution.

I have a problem saying that actually Rastor. I think that the general living situation in the US is going to drop quite a bit (actually it will most certainly in the EU too but that is due to the joining of new members from Eastern Europe). Concerning the US I think they might have a future problem simply because they do not seem to utilize its greatest natural resource, the people. As it stands today in my knowledge only people from quite well off families are able to study further than high school unless they are exceedingly bright and well disciplined and can get scholarships. In a world where knowledge is the most valuable commodity I think that is going to show itself in the general economy sooner or later. Jobs where you dont need any higher education is getting scarcer and scarcer and pay less and less. Staff intensive industries have been relocating their factories to other places in the world for a long time, both in the US and in Europe and I am quite convinced that investment into making it easier for people to study past highschool benefits everyone.

I can also see some trends in the US today, and in the whole world to be honest but it is clearer in the US that the chasm between those that have and those that dont is getting wider again after having lessened during the last century. What good is general economic growth when it doesnt benefit 85% of the people. The trickle down theory has yet to show any validity anywhere except in the minds of some financial theorists and politicians.

These are just thoughts though, he who lives shall see.

Concerning the US I think they might have a future problem simply because they do not seem to utilize its greatest natural resource, the people. As it stands today in my knowledge only people from quite well off families are able to study further than high school unless they are exceedingly bright and well disciplined and can get scholarships. Well, this is the exact opposite of what is happening. Actually, the percentage of population which has a college degree is at an all time high in this nation. This is true for the overall population and each ethnic group in the US as well. Kiplinger had a story about the myths of college expenses:

Myth With a four-year college education running about $100,000 for tuition, my kid would have to be Richie Rich to afford a college degree.

Reality Despite hair-raising stories about rising costs, only 7% of students attending four-year institutions pay $24,000 or more a year in tuition and fees. The majority -- 70% -- pay less than $8,000 a year, and almost 40% pay half that amount.
Also, from anecdotal evidence, it is increasingly easy to get scholarship assistance. For example, states like Georgia are moving toward providing any in state resident a free college education to any student graduating high school with a B average. UNC, an influential University, is part of the growing trend to do away with all loans and replace them with grants; initiating a program where in exchange for full scholarship aid students work 10 hours a week for the University.

I know I paid my way through undergraduate and post-graduate school. I know that many of my friends did the same. I got out without owing anything in student loans. Others have student loans. Either way though, it is becoming easier in the US to go through college. What may be becoming more difficult is going through certain colleges without help as certain colleges prices are high but overall, it's easier.

can also see some trends in the US today, and in the whole world to be honest but it is clearer in the US that the chasm between those that have and those that dont is getting wider again after having lessened during the last century. This is one of those ideas I reject. I personally don't think it matters one iota what the gap in wealth between Bill Gates and me is from an economic standpoint. Bill Gates having more money doesn't mean that I have less. It is not a zero sum game. Indeed, because of the way the multiplier principle works Bill Gates being wealthier means that there is an increase of wealth to the system greater than the increase to Bill Gates. His wealth doesn't sit in a Scrooge McDuck type vault which he swims in; it is loaned out for house buyers, car buyers, small business loans etc.

Which leads to another point - the average income in the US is at an all time high according to the latest census figures. The median income in the US is also at an all time high according to the latest census figures. This is when adjusted for inflation etc. So, the idea that only a small minority of the US is benefiting when the economy does well and the rest is a mass of down-trodden folks wearing burlap sacks simply isn't the case. Things are, historically, getting better for all economic groups and not just the rich; the numbers support this.

I would also say there is a change in the type of work being done in the US but change =!= necessarily have to be bad. Manufacturing is down but meanwhile new types of industries, whether it be pharmaceuticals or software or service industries etc, are replacing them.

Your last quote of me was commented quite out of context. I statet explicitly that the trickle down theory which was what you were refering too has yet to show any noticeable results anywhere, atleast to my knowledge.
It may not be a zero sum game but if the economy grows with 5% in general and none of that increase goes to you but to a very small part of the populace which is what I said, it doesnt matter that the general economy is growing. Ok if Bill Gates had earned 5m$ more that year and you 500$ more but if Gates instead would earn 10m$ more that year and you nothing the financial growth hasnt really benefited the majority of the population.

Your comments on college actually doesnt go against what I said. I didnt state it explicitly but when I talked about the changing world and knowledge as the greatest commodity I did take in account that more people would study more in the US well. The mere fact that there is such a thing as tuiton is still stopping many though. You say you worked your way through college, I bet that was quite tough and not something that it is easy to do. Not everyone is able to combine both full time studies and to work to pay for it, they may not be as fit for college as you were but in the future even those people may need to get an education. My point really is that the average Joe with an average intelligence and motivation may also need to have a college education to be able to contribute in the future. There will always be people who absolutely not are fit for higher education of course but most are.

Lastly, dont you think you would have been able to learn more and in a better way if you didnt have to work your ass off while in college? Wouldnt it be nicer and in the end lead to a better knowledge of the subject on your part if you had been able to devote all your attention to your studies instead of juggling work and studies at the same time?

It may not be a zero sum game but if the economy grows with 5% in general and none of that increase goes to you but to a very small part of the populace which is what I said, it doesnt matter that the general economy is growing. The problem is that the average income is up. The median income is up. So, the economic gains aren't just going up for one small group or the median income would not be up. You set up a hypothetical, "if all the growth goes to a small part of the populace" but that hypothetical isn't what is happening according to the census figures regarding average and median income.

Regarding college, the point is that scholarships are becoming more and more plentiful and easier to qualify for. Loans are being replaced by grants. It is becoming easier and that's why there is an increase in the number of people attending college and the number of people with degrees. It wouldn't make sense to think it was becoming harder at the same time the number of scholarships and graduates is up - there is a causal relationship in there somewhere.

Lastly, dont you think you would have been able to learn more and in a better way if you didnt have to work your ass off while in college? No. I absolutely do not. In fact, I think the opposite is true. I think working and going to school prepared me for life in a much better way than I would have been prepared otherwise. Let me ask you: do people generally appreciate something more if they work for it or get it for free and it comes cheap? And one need not 'work [their] ass off' either. My girlfriend in undergrad was on a need based scholarship that required her to work for the school - she worked 10-20 hours a week at the library. Hardly working your ass off.

Tangential rant time: the West is becoming a bunch of sissies. Thinking they're entitled to retire at early ages and work 30 hours a week and...blah. There is nothing wrong with retiring early, or working as few hours as possible, or being generally lazy if you want to be but nobody is entitled to that.

Laches - I note that you use the word "tuition." This is where the "rubber meets the road" as they say when those who rely too much on such statistics in an effort to prove their point. The college I attented had a very low tuition. Maybe 125.00 per class. Then they start tacking on fees: lab fees, computer fees, parking fees, international fees. Oh, yes they find all sorts of fees. How this translates in the real world is that a class with a tuition fee of 125.00 suddenly becomes almost 400.00. Some of my "tuition" was paid for by my company, but guess what? It did not cover added fees. So the bulk of my classes were not paid for, becuase of the so-called "low tuition" I was paying. Also, one must count books, which can be as much as the class itself. Thus, a class with a 125.00 tuition fee suddenly becomes 800.00 after all is said and done.

My wife's brother is away at college in Georgia. A small liberal arts school. He lives on campus and it is a private school, since his parents did not want him attend a state school. Estimated cost for four years: 250,00.00. That's no myth.

By the way, I understand that the class I used attend for 390.00 is now over 600.00, thanks to the George Bush educational reform here in Texas. That is a sizable increase for a state university. Plus books of course.

I do not doubt your numbers Laches in it was a hypothetical situation from my part and a quite long term one at that.

As for the mecian income, hasnt that always since it started to be measured been more or less on an all time high? I assume or hope that your numbers incorporate consumer price index and inflation if not it may be like it is here where real salaries have decreased in the last decade in many sectors, pay raises eaten up by inflation, and we havent even had a very big inflation.

I am also not fond of your use of medians, as it doesnt take into account the difference between how many earns less than 150k a year and how many earns 150m a year. 100 people earning 50 million dollar year is bound to pull up the median even if there are 50 million people earning less than 100k a year.

Laches - I note that you use the word "tuition." This is where the "rubber meets the road" as they say when those who rely too much on such statistics in an effort to prove their point. Actually, the Kiplinger quote above refers to "tuition and fees ." The additional costs you reference are part of the "and fees" part.

My wife's brother is away at college in Georgia. A small liberal arts school. He lives on campus and it is a private school, since his parents did not want him attend a state school. Estimated cost for four years: 250,00.00. That's no myth. I could believe that. Which college? Is he from Georgia? If so, then if he had a B average he could have gone to UGA or Georgia Tech, two of the top institutions in the US, for free. There is also Georgia Southern etc. He could've gone over the border to Auburn University or U of Alabama, both very good schools, and paid out of state tuition for $10,000 or so. There are a lot of choices he could've made that were a lot cheaper. He chose to get one of the most expensive educations in the United States. This was his and his parents choice. He had plenty of other options.

It's one thing to say that a college education should be available and achievable - it is. It's another thing to say that anyone should be able to go to any school they want anywhere on the cheap. He had lots of excellent choices but he wanted an exclusive and expensive private school. I'm not sure that anything wrong happened with the system in this instance.

And, you can go to one of those 7% schools where the cost is very, very high. I did my post-grad work at one of those schools. I got out without any debt (scholarships + work). A number of my classmates had significant debt. But, it was our choice to attend a more expensive school.

There are pros and cons involved with a US type system. I wish I could find it; recently I read a book overview by a French author about the state of France's higher education. The endowment at Harvard is bigger than the money poured into all of the French Universities combined. The result, according to the author, is that more and more students from abroad seeking schooling in the US because the US attracts a lot of the top teachers. I'll see if I can find the book synopsis again - it was ~ a month ago.

Frankly, I don't see much wrong with asking someone to invest in his or her own education.

Laches - The point was that fees are added dependent upon which programs and which classes a student takes. Also, parking fees can range anywhere from a high of 40.00 a semester to as low as nothing if you are willing to walk a long way on campus. While Joacqin may have confidence in your statistics, I do not. I woudl have to see them for myself, not that I don't believe you. In my particular instance, I ended up paying quite a bit out-of-pocket, because of "low tuition," which was not really all that low. I can't beleive that there is anyone who would believe that a college education is "cheap" these days.

I am also not fond of your use of medians, as it doesnt take into account the difference between how many earns less than 150k a year and how many earns 150m a year. 100 people earning 50 million dollar year is bound to pull up the median even if there are 50 million people earning less than 100k a year. Actually, it does. A median is where you put half the people on one side and half on the other. How much you make is irrelevant for the median. Your example that I quoted will raise the average, but those 100 people won't knock the median up any unless every else is also making more than they were.

Also, parking fees can range anywhere from a high of 40.00 a semester to as low as nothing if you are willing to walk a long way on campus. My school has no parking fees for students or faculty/staff and I could drive my car from my dorm to right next to the classroom building for free.

The point was that fees are added dependent upon which programs and which classes a student takes.Not if you're a full time student. I'm paying fixed tuition that will not change regardless of classes, library usage, food, whatever.

BTW, over 67% of all people finishing high school in the US today are going on to college. The vast majority of the rest are going to some sort of trade school.

I thought we were talking about Bush taking undue credit for the recent economic growth, not college tuition...

In any event, to add to my original topic, today it was announced that the US unemployment rate has finally dropped to 6% (from 7%). The US added thousands of new jobs in October, and an economic recovery does look likely. I wouldn't say imenant, but things are certainly looking up a little.

http://www.msnbc.com/news/990515.asp?0cv=CB10

I'm not sure exactly how this can be attributed to anything the Bush administration has done in the last quarter (even though they're already taking credit for it), so I was hoping someone could explain this to me. Given the immense Iraq spending, Bush spending more than half of his time campaigning for his reelection campaign and filling his "war chest," etc. Perhaps someone can explain this to me. I'm willing to accept that there is some tangible evidence of the Bush administration making progress and taking initiative domestically, despite all the damage they're doing to environmental policies, civil liberties, etc., but I just can't see it. Throw me a bone here.

ps - No hijacking!! ;)

In any event, to add to my original topic, today it was announced that the US unemployment rate has finally dropped to 6% (from 7%). Actually, it was down from 6.1%. I had some trouble with the msnbc site. Here is the WaPo article:

http://www.washingtonpost.com/wp-dyn/articles/A11473-2003Nov7.html

Yesterday Federal Reserve Chairman Alan Greenspan, in his most upbeat assessment of the U.S. economic outlook in years, said the economy should soon start producing the kind of job growth that has been missing since the end of the 2001 recession.



Greenspan had sounded cautious about the job market earlier this year, as the economy weathered uncertainties related to the war in Iraq, concerns about corporate scandals and the unwillingness of businesses to make new investments. But yesterday, Greenspan said the economy appears poised for sustained growth strong enough to generate more hiring.

@ DR: You said you weren't sure what was done in the last quarter that Bush & Co. are trying to take credit for as it relates to the economy. There is a lag time of ~18 months give or take for the effects of many policy changes to be felt. So, they're saying that the growth is related not to something they did this quarter but instead what was done further in the past. In this case, back in 2000 and 2001.

Rastor - My posts were about how tuition was arranged at the college I attended. And thank you for making my point, that colleges differ from each other. Thus, statistics are only a rough guide for expenses. You can see a large contrast between the college you attended and the one I did. I paid about 40.00 for a full semester of parking, and fees varied a great deal at my college. For instance, because I was an English major, books (I could order a few from Amazon at a discount) and fees for me were somewhat cheaper at upper levels. For my wife, who was a science major, her books were way more expensive (sometimes over 100.00 per textboook) and she had a very high cost in lab fees.

DR - There is a theory that college attendance goes up during hard economic times. Increases in college enrollment is somewhat higher during times such as these, when the economy is poor. Also, keep in mind that Bush was our governor here, before this new fool, and left the Texas economy in a very poor state. He bragged about what he had done for education here in Texas, but the results of his "efforts" are a poor showing. As an example, I spoke with one of my ex-professors who told me that altough enrollment was up at the college, instructors were being laid off, and those staying were given higher work loads and more students (larger classes). So we really are still on your topic. Joacqin raised a very valid issue about economics and education, and on both counts Bush has a very poor record.

It really makes me somewhat angry (I am beyond being puzzled) that just because there is improvement some are spinning this into some kind of "economic boom." It is more than spin, for it is dishonest. The market was at around 12,000 when Clinton left office, what is it now? About 9700? That's still a huge drop, despite those who claim the market is up a certain percentage. Also, Unemployment is at 6 percent. What was it in 2000? I think that those who think this is some kind of boom are either in denial or just plain dishonest.

Edit : I noticed that I'd put the market at 9700 while, to bush's faovr, it is at about 9800, and I gave Clinton about 12000 when the market was at around 11500. Sorry for the error.

[ November 08, 2003, 02:10: Message edited by: Chandos the Red ]

I think that most economists view the market at 11500 to have been over-valued. The prevalent perception is that a correction was required, which has happened, but now is contributing to the recovery. Most Liberals and Conservatives find accord on this.

During the Clinton years the stock market went nuts, investors saw incredible gains, mostly because stocks were percieved as intrinsically valuable. As a result, however, many stocks, and especially mutual funds, were ridiculously overvalued

My 401K loved the Clinton years, but as I now start to invest independently, away from the security blanket of a managed fund, I feel far more secure in this present market.

This may not totally be on the original topic, but I love posting after Chandos! :wave:

HS - I'm glad that you enjoy my posts, so I will give you yet another. Something really neat happened during the Clinton years: the average worker discovered that stocks could be a good investment. This is in keeping with the idea of an "economic democracy" - the idea that the average worker had the same opportunity as the rich (on a smaller scale). There were days that I actually went to work and returned only to discover that my investments had been working while I was. I often made just as much in the market as I did going to work eveyday, just like a true capitalist. And I have to admit it was fun. Of course the "democracy" ended as soon as the republicans took back the White House. In fact, the day that Bush was appointed Prez, I said to my wife, "you know, we should sell all of our stock because with this guy, bad times are coming." So how was it that I knew more than the real capitalists who thought that Bush was a good thing for the economy?

[ November 08, 2003, 04:30: Message edited by: Chandos the Red ]

But Chandos, what happened to those $ we made in the stock market during the Clinton years? They are gone, because they unfortunatley were not real. Those dollars earned during that time are no longer in the hands or accounts of the worker, but tied up in some bankruptcy or fraud suite. I'd like to throw Enron out as an example, as it truly is, but you'd just use it to attack the local governor at the time :) . Enron is an extreme case, but still indicative of what has happened to all of the middle class investors.

That Bull market was a thrill to ride, like a roller coaster (or whatever the big deal at Six Flags over Texas is), but like that thrill ride, when the 60 seconds is over, you get off and realize that you still need to walk on your legs. It is not due to a Republican leadership that we can no longer enjoy obscene gains on shares in a Mutual Fund, it's just gravity.

You mentioned the "average worker" experiencing gains...yup, I saw alot of those on my quarterly reports...but they weren't real. We all FELT like we were getting rich, but the only ones with money still from that era, are currently in state penitentaries or overseas. The downturn that was felt in 2001 would have come whether Bush, Gore or (what the hell) Nader, were president. That was the economic impact from around...18 months before...when Clinton was still eating MacDonald fries and telling White House pages that he was the "Most Powerful Man" in the world.

Oh, by the way...

In fact, the day that Bush was appointed Prez Don't you mean, annointed? :grin:

As my other posts have indicated, I don't sway from placing blame on the current administration when proper or suitable, but not in this case. Clinton started his tenure with a huge "victory" benefit, with the possibility to create budget surpluses larger than imaginable. In time, he will be remembered as failing for having done so little with such a great ammount.

In time, he will be remembered as failing for having done so little with such a great ammount. Sounds as if you are speaking of Shrub, not Clinton. :grin:

Sure they worked! They made Jr's rich friends richer and helped tank the economy, necessitating cuts in public works. Exactly as planned.

The economic downturn did not start with Bush, we actually started going into a recession during the Clinton administration. As was already said, that would have happened regardless of who was president.