This is the updated version of the chart I used yesterday, showing this 2003-08 cycle, courtesy of Spencer England’s Economic Research.
As you can see, this was the weakest in terms of NFP job creation of all the post-recession recoveries since WWII.
click this for ginormous version
Bush Boom? Hardly . . .
>
Barry, I sent the comment, but neglected to check Name and Email before sending. My bad. It usually pops up quickly, and I’m still bleary eyed. LOL!
BR: neither does this address the nature of the job gains and losses. Basically there has been massive expansion in govt (or govt contracting), construction and the services generally but particularly healthcare. Meanwhile massive losses in manufacturing. Well now construction is now on the long slide and we’re going to see some contraction in services.
Barry, from Salon and yank if inappropriate. I want everyone to look surprised for the pictures just like CONgress this week:
“The next time we have Black Monday”
In the most unexpected demonstration of the thesis that all things are interconnected in a myriad of nonobvious ways, I received an e-mail today from a now-retired reporter named Stephen Pizzo.
Back in 1995, Pizzo and I were colleagues at the Pleistocene-era online magazine Web Review, a daring experiment in the new world of online journalism bankrolled by computer book publisher O’Reilly & Associates. I was a freelancer who was writing madly about the Internet for anyone who would pay me. Pizzo was an established reporter who had coauthored a well-received book on the savings-and-loan crisis. His honed hard-news reporting chops were a welcome complement to the rest of the staff’s geeky cyber-enthusiasms.
Pizzo had been reading my coverage recently of Wall Street’s economic misadventures, and wanted to draw my attention to testimony he gave in Congress in 1991, at a hearing exploring proposed legislation aimed at deregulating the commercial banking industry.
Prescient is too mild a word to describe Pizzo’s testimony. I recommend reading it in its entirety, so as to savor the full flavor of his brimstone and fire. But here is a choice excerpt, featuring Pizzo’s prediction as to the likely baleful consequences of allowing commercial banks to play with securities.
As we autopsied dead savings and loans, we were absolutely amazed by the number of ways thrift rogues were able to circumvent, neuter, and defeat firewalls designed to safeguard the system against self-dealing and abuse. One of the favorite methods was to link up like-minded thrifts in the daisy chains through which they could circulate inflated assets and hide their rotten loans to each other and to each other’s customers from regulators.
Banks that need to get money to a troubled securities affiliate will do exactly the same thing. By linking up three or more banks, each with its own securities subsidiary, a daisy chain will facilitate a round robin of reciprocal loans in times of need. Then, the next time we have a Black Monday on Wall Street, this daisy chain will swing into action as a handful of mega-banks try to prop one another’s securities subsidiaries and their customers as the market plummets.
In such a scenario, billions of federally insured dollars will disappear in the twinkle of a few program trades.
That will happen, not might happen but will happen, and when it does these too-big-to-fail banks will have to be propped up with Federal money. In the smoking aftermath, Congress can stand around and wring its hands and give speeches about how awful it is that these bankers violated the spirit of the law, but once again, the money will be gone, the bill will have come due, and taxpayers will again be required to cough it up.
Nice work, Stephen. Too bad they didn’t listen to you.
— Andrew Leonard
It truly is incredible. I am an English major (no quant credentials here!) and no MBA, but I saw it coming as soon as Glass Steagall went away. Any congress person or bank regulator or bank executive who claims to not have seen this coming is full over overpriced fertilizer…what makes me crazy is that the folks getting laid off now and into the future, for the most part, did nothing wrong and now will pay for others greed…
The current cycle is consistent with all prior cycles except one rare instance when there was an unusual once in a millennium spike in hiring to address the millennium bug (aka Y2K bug) and to feed the internet bubble. All those “Clinton jobs” (aka Y2K related and internet bubble jobs) had evaporate as fast as they were created, but the left-wing liberals like you still continue twisting the data trying to glorify Clinton’s presidency.
When will you start analyzing the data objectively without injecting your politically motivated and opinionated spin?
~~~
BR: So its your opinion that the build out in the 1990s was all Y2K?
What about semiconductors, software, PC, internet, wireless mobile, data storage?
PS: I never mentioned any Clinton boom, but the link goes to Jerry Bower’s laughably titled book, Bush Boom.
If you want to see something scary,
take a look at the chart I created illustrating the y/y % change in Service Employment excluding the more stable Health & education jobs.
See “The Precipice”
Monica,
I thought the article was about rate of recovery / job growth. Jobs lost from Clinton era? All those manufacturing jobs we have lost? Were they Clinton era jobs? The growth of govornment jobs were caused by the enlargment or diminishment of govt. ?
Lets not even mention the diminishment of the US dollar, partialy caused by accelerating debt combined with lower interest rates.
Get out of your blue dress, and reread the article, there will be a test.
I think Barry’s point re the Bush boom is that there has been no effort to create more job growth, only spin on how great the economy has been. We will only be able to wonder what might have been, if we had faced up to the issues the past several years. Before anyone takes me on politically, you also have to blame the Dems here for being such ineffectual opponents to this incompetent administration. This sayhs a lot about our ability to change the dynamics of this situation.
Turns out that the only thing Bush has been good at is throwing out the first pitch.
What would the line look like if we added all the jobs created elsewhere by American businesses?
All you Bush bashers do not realize (or intentionally playing it down) that Bush had inherited a recession from Clinton, that Bush had to deal with 9/11 destruction and Katrina Mess (courtesy of incompetent and corrupt local democratic governor and mayor).
P.S. Barry, you have been reading too much of NYT liberal propaganda lately. All of your posts are tilted to one-sided and bizarre thinking lately, very similar to NYT ultra-liberal propaganda.
~~~
BR: Yes, its apparent that I am the one here who is the political extremist, George . . .
Will Rahal – Nice chart! Thanks for providing link.
“Don’t tax you, don’t tax me. Tax that fellow behind that tree!” Ev Dirksen.
To hell with politics. A pox on both their houses. Statesmanship went out with high button shoes.
SPECTRE:
I have a rule of thumb I use – after watching the S&L debacle – that has served me quite well in the run-up to this fiasco:
Any time (actually, the first time) you hear a banker/loan officer/lender utter the words: “we have a new financing vehicle” (or any variation of that phrase), put your money/valuables someplace safe (outside our financial system), divest your holdings in the industry using the new vehicle.
Such statements are the bellweather of criminal goings-on and the precursor of substantial financial losses.
It is a harbinger of the liberalization of our financial system.
P.S: I get 10 points for using the words “bellweather, precursor, and harbinger” in a single comment.
Re: Marcus Aurelius under the Mattress Investment Strategy
You will miss many fantastic opportunities with such put under the mattress investment strategy. The key is not to be greedy and to get out on time. I have doubled my money investing in REITs like NEW (now bankrupted New Century Financial) and in Countrywide during 2004-05.
SPEC:
Please forgive the following:
To Monica and George:
Do y’all hold your under-performing stocks until they are valueless – based on the mistaken belief that since you chose them, must be good?
Your “Conservative, MBA President” – in addition to being the most liberal politician to ever hold the position of POTUS – has failed at every enterprise he has initiated. He is nothing but an obstinate, spoiled child, and we will pay through the nose for not putting him in a time-out (prison).
If you disagree, suggest you read the Constitution.
As for the Clinton “recession”, you need only look at Republican budget deficits and cozy relationship with corporate interests to see whence our current nightmare originated.
George: Bush had warnings about 9-11, and did NOTHING. That’s a fact, Jack. As for Katrina, do a little research into why the LA State/local authorities couldn’t implement their evacuation plans. Specifically, check Blackwater’s role in the evacuation/law enforcement process (they order US soldiers around under threat of violence in Iraq, as I’m sure you are aware – think of what they could get away with when imposed on a civilian population).
Bush is not only a failure and responsible for our current situation, he is an abject failure and fully responsible.
Keep voting against your own self-interests. You deserve what you get.
Posted by: Be Greedy When There Is Too Much Fear, Be Fearful When There is Too Much Greed
___
Considering our current predicament, I hope you enjoy your soon-to-be valueless “wealth” (which you have gained at the cost of the destruction of our national economy).
I’m sure you would never sell your country out for 30 pieces of silver.
The “greed is good” meme has been debunked.
It is just strange to me that some people actually think the recession was caused by Clinton and not Greenspan. There is no logic where you can blame Clinton for something that was the result of a string of rate hikes he had no control over. Note that he didn’t have control over the loose policies of Greenspan prior to 2000 either.
And somehow the hundreds of thousands of manufacturing jobs lost post 2001 are related to the popping of internet bubble. It is this Rush Limbaugh quality logical thinking that got us into this mess in the first place. Right now, we are bailing out the major investment banks to the tune of hundreds of billions of dollars. The total bailout is going to total 2 to 3 trillion dollars, and these clowns are blaming a guy who wasn’t responsible in the first place and has been out of office for seven years. Farce has become tragedy. I guess for 28% of the population, there are no facts, only opinions to be debated, mostly along the lines of “I cant understand why you hate Bush and not Clinton. Clinton was a popular president who presided over a huge economic expansion and Bush has presided over the worst economic expansion in modern history that ended with the largest bailout of the financial industry in history, so you should hate Clinton because I do.”
But I guess some people will never give up.
Anyway on to commenting on the chart…
What pops out at me on this chart is just how much lower this recovery is than the average recovery of the last 50 years. As this recession/depression hits, the losses are going to be incredible, and we are starting from a low peak.
We are lucky that our standard of living is so high that we can afford to lose 10% or so and not have it be horrible for citizens of the United States. Back in the 30’s this was not the case and resulted in bread lines.
Barry, I know you are not stupid, and your writing about this horrible recovery has been essential reading for the entire financial industry. When you put out the posts on the real rate of inflation over the last decade and then a separate post on how GDP is related to the inflation rate, all the non-Bush fans out here get the “Big Picture”. You are saying we’ve had negative economic growth over this entire cycle by some measures.
I work in the financial industry with an alphabet soup of letters after my name. I am shocked at how much money some people make for not really doing anything other than taking a bag of money from one person, counting it, dividing it up, handing it to another person, and then reversing the process in 3 minutes, days, months, or years.
When the humans of the 50 years from now future look back upon this last 35 years, they are going to wonder why we allocated most of our civilizational resources to skimming money from worthy enterprises to put in the hands of already wealthy people.
Marcus says – hear “we have a new financing vehicle” run
what did / do you think of Regional Housing Stress Instruments (paraphrased – dont know the real name or symbol)?
Posted by: Greg0658 | Apr 5, 2008 10:59:21 AM
____
Are you referring to the new government-based, bail out strategy (I don’t know the name, either)?
If that’s what you are referring to, the cure will be worse than the disease.
I am referring specifically to new “financing vehicles” offered by the industry. You can bet on 2 things regarding new types of financing:
1. They are liberal to the extreme.
2. They remove or avoid the regulations that are there to keep this shit from happening. In doing so, they open the door to massive criminality in the form of fraud.
Behind every regulation or law, is someone who was robbed, beaten, defrauded, or otherwise hurt by the liberal actions of others.
Behind every 25 MPH speed limit in a residential area is a kid who got hit by a speeding car.
To mickslam
Clinton years assisted big business and Republican controled Congress to outfit China with manufacturing prowless
Wal*Mart ad champaigns
80’s – Buy American
90’s – Always Low Prices
present – Save Money. Live Better
Clinton years were great because of manufacturing manufacturing and exporting it
Thats my take and I’m sticking with it
Marcus Aurelius: “George: Bush had warnings about 9-11, and did NOTHING. That’s a fact, Jack.”
I am not political but you are confusing the facts and blaming Bush unfairly for mistakes made by the democrats (Clinton, Louisiana government, and New Orleans mayor)
Fact-1. Clinton had warnings about 9/11 and did nothing, not Bush. The 9/11 attack was planned over ten years (during Clinton presidency). You are probably not aware but there were prior bombing attacks on WTC during Clinton (Bombing of February 26, 1993). Bush simply inherited the fruits of Clinton’s ignorance and incompetence — post internet bubble recession and 9/11 attack.
Fact-2. Moreover, US soldiers being in Iraq is not related to Louisiana government being incompetent or handicapped (you are confusing cause and effect). There were millions of school buses available to evacuate people to safety before the disaster that the government was warned about 2-3 days prior to Katrina. You do not need US soldiers to put people on a bus and to evacuate them to safety.
You don’t have to look far to discover the reason for the jobless recovery – there has been no real recovery, only a jobless bubble in the FIRE (Finance, Insurance, Real Estate) economy.
Marcus Aurelius,
Greed is good. Greed is a driving force behind innovation and progress.
Look around you… Greedy people invented everything you see around you.
Do you think Gates or Jobs would care so much about you having a PC or an iPod if they were not motivated by greed? I do not think so…
Have a good weekend in this wonderful and greedy world! Later…
Posted by: Be Greedy When There Is Too Much Fear, Be Fearful When There is Too Much Greed | Apr 5, 2008 11:19:11 AM
___
This shit is seriously OT, but your propaganda must be rebutted, so here goes:
It’s a well known and documented fact that Rice and Bush received specific information on the 9-11 attacks from their own NSA staff (in the form of a NIE), but chose to ignore them. Clinton was out of office for over a year, by then. On a tangential note, whatever happened to the Anthrax attack investigation, which was post-9-11? Who dances for the Saudis (the hijackers were overwhelmingly Saudi)?
Like I said, do a little research on why the school busses you refer to were not allowed to cross the bridge into NO. Hint: evac routs go one way: outbound. Then check who turned them around: Blackwater mercenaries (who were not hired to provide this “service”, and who over-billed the government, retroactively, for providing them. If you were a bus driver and a masked person dressed in black tactical gear pointed a military weapon in your face and told you to turn the bus around, would you ask to see ID?
If you think all of this BA crap is on the up-and-up, you are intellectually dishonest, at best.
That’s my last word on the subject. Im taking SPECTRE’s advice and sticking to econ subjects for the rest of this thread.
How ’bout dem shallow shallow job creation numbers?
BR is THE MAN.
I will repeat here what I have been saying about President Bush for several years now:
He was a dealt a lousy hand, but he played the cards he was given about a poorly as possible.
UrbanDigs
The rate of decline is striking!
The charts suggests a bottom in late
2008 or early 2009.
I thought that health care jobs were the most secure job one could have and that as an industry it could raise prices at will because people get sick and need help.
However, of recent, I’ve noticed that hospitals are floundering and hospitals are shutting down not-so-profitable departments, such as mental health, and strongly competing for profitable business, such as cardiology. In addition, expansion projects are being cancelled.
It appears that an industry that use to be price inelastic is no more. It’s even true for health care that when prices get too high, people stop paying. Any comment???
Talk about the “internet bubble” puzzles me. My view is that a lot of people were chasing many of the same ideas. They found investors. Some of those investors lost money because better ideas won the race to realization. That sounds like capitalism at work. MEANWHILE, back at the ranch, the number of internet users continues to rise, new ideas are constantly becoming businesses with new services and employees. What does it mean for this “bubble” to burst?
So much for a non-political discussion of economics.
I suppose it’s too much to ask that this fine blog be free of troofer mendacity as well.
Barry. I know you were trying to calm down the rancor with your last comment — and putting it in bold to give it extra emphasis.
But the man had 90 percent approval rating after 9/11. He had the political capital to do absolutely anything he wanted.
The enormously destructive choices he’s made were a function of the latitude he was given. A President who was “dealt a bad hand” wouldn’t have been able to do nearly as much damage.
My war materials factories are running at full tilt. My oil wells are reaping profits we never dreamed of during the Clinton years. Things couldn’t be better if we’d planned it this way. Sure a few people have gotten burned but if they just work hard and pray more and everthing will be fine. The wine is flowing and the coffers are overflowing. God Bless George Bush.
Whiny liberals. The Bush DOJ has stated that until pain reaches the level of death or organ failure no one has a reason to complain. A noble expression of our Pioneer Spirit.
But even with the train-wreck that has been CheneyBush, it is by no means certain that Bush II (McCain) will not ascend the throne.
Bush inherited a recession from Clinton? Yes, but he also inherited a nice surplus and much more fair income tax rates.
Bush inherited the war on terror which Clinton ignored? Not really. After the USS Cole they had a good idea where Osama was and had cruise missiles ready to hit him, but Bush called it all off, preferring not to “swat at flies”. And then there were al the 9/11 warning signs which he ignored.
The Bush defenders are quite amazing in their non-reality based arguments, but really you all make me sick.
Here is a different non-political interpretation. Bubble-oriented monetary policy has distributed the pain in time, so in effect the recession has lingered. So the recent 2 recessions both have *lost* jobs during the “recovery”. In the 2001 recession, it took 29 months after the recession ended for jobs to reach the “recession trough”.
If we redefine recession to include those 29 months (which felt recessionary to everyone but statisticians), this recovery was OK.
Modern bubble-oriented (or asymmetric) monetary policy seems to distribute the pain of bubble-burst over time. Japan’s lost decade is the classic example of it.
I remember when “The Bush Boom” first came out. It was laughable then, and downright tragic now. Since Bush took office, I’ve been regularly reading the National Review and the Weekly Standard looking and hoping for some signs of sanity from the conservative establishment. In particular, it has always struck me as odd that Bush–a supposed conservative–is given a free pass on his fiscally reckless, big government economic policies. It’s always been a head scratcher to me as to why folks like Bowyer and Kudlow cheer Bush’s economic agenda, even though (aside from the tax cuts) it represents almost the polar opposite of what “economic conservatism” actually is. It also amazes me as to how utterly wrong Bowyer and Kudlow have been with almost every one of their economic projections over the past year. A year ago, Bowyer wrote a piece for the NRO claiming that the subprime problem was far too small to have a large impact on the overall health of the economy. Whoops. It’s probably for reasons such as this that used copies of “The Bush Boom” sell for a penny at Amazon.
The problem I have with this post, and the rather unfocused string of comments that follows, is the underlying assumption that the President, whoever it happens to be, has some sort of direct and total control over the course of the economy.
The “Clinton” boom of the nineties was largely driven by the rapid advance in information technology. Unless you actually believe that Al Gore created the internet, it is hard to see how the Clinton administration had much to do with it.
With the possible exception of NAFTA, the most important aspect of the nineties from a governance perspective was probably the fact that gridlock in Washington kept both Congress and the administration from doing anything especially stupid.
(A serendipitous demonstration of the truth of Thomas Paine’s observation that, “That government is best which governs least”)
Notice that job growth in the 90s was significantly slower than for previous recoveries. Does this mean that Clinton was a lousy economic manager?
Or is it simply an indication that rapid advances in technology resulted in much more efficient economy that was able to expand output without hiring as many workers as were needed in the past?
Now let us consider the “Bush” recovery. This time we see even slower job growth. Is this because President Bush is an even worse economic manager than Clinton? Or is there something more fundamental going on?
At this point it might be worthwhile to point out that there are plenty of excellent reasons for believing that President Bush hasn’t been a very good president. However it is big jump from Bush isn’t very good to everything is his fault.
There are three main factors responsible for the low job growth during the “Bush” boom.
(1) The recession wasn’t very deep. Unemployment topped out at just over 6%, which is low by historical standards. Rapid job growth after a recession is at least partly the result of high unemployment during the recession. Without mass unemployment, and thus huge slack in the labor market, you can’t have booming job growth.
(2) The productivity revolution that limited job growth during the 90s is still ongoing. US companies have proven incredibly adept at growing output without growing payrolls.
(3) The emergence of China as an economic powerhouse. If Americans could import things cheaply from China it made little sense to produce them at home. Which is why the post 2001 recovery saw very little growth in manufacturing employment.
The important point is that President Bush had very little influence over any of these factors. It is hardly his fault that the 2001 recession wasn’t very deep. We can’t hold him responsible technology driven productivity growth. And we can hardly blame him for China’s decision to transition to a market economy, which did after all pre-date his presidency.
Some critics have suggested that the President should have thrown up a wall of tariffs to protect American manufacturing and thus manufacturing employment. However there are several problems with this idea:
(1) It’s economically asinine (Read up on Bastiat’s Negative Railroad if you don’t understand why)
(2) Such a policy might well have promoted a trade war and created considerable antagonism with China (would a second cold war really have been better than modest employment growth?)
(3) It is incredibly mean spirited. The expansion of the Chinese economy, though flawed in many ways, has lifted hundreds of millions of people out of poverty (And not the American obesity causing version of poverty, but the actual grinding mud hovel kind)
In summary, Bush is not a very good president, but not everything his fault. Slow job growth is a result of macroeconomic factors largely beyond the control of any president.
In future, please slam the President for things that are actually his fault (Iraq, insane government spending, undermining the constitution etc).
” the underlying assumption that the President, whoever it happens to be, has some sort of direct and total control over the course of the economy.”
So Zimbabwe’s economic disaster has nothing to do with the policies of Robert Mugabe? Seriously?
The fact is, governments have pretty good control over the economy when it comes to making things worse. When it comes to trying to improve an economy, mostly the government can implement policies and incentives and hope they work. But governments have almost limitless power in trashing the economy.
Wow. Somebody tapped a keg of Purple Kool-Aid this morning:
Monica,
“All those ‘Clinton jobs’ (aka Y2K related and internet bubble jobs) had evaporate as fast as they were created”
Actually, the internet was a TINY FRACTION of the overall national economy, and the vast overwhelming majority of the more than 22 million net new jobs created during President Clinton’s two terms, the most jobs ever created during a single administration in history, had nothing to do with “Y2K related and internet bubble jobs”.
Overall retail sales in 2000 amounted to more than $3.2 Trillion. On-line retail sales in 2000 amounted to something like $50 Million.
As someone famously said, YOU do the math.
~~~
George,
“All you Bush bashers do not realize (or intentionally playing it down) that Bush had inherited a recession from Clinton”
There was no “recession” during the Clinton administration.
“that Bush had to deal with 9/11 destruction”
According to the Congressional Budget Office, the cost of the four previous rounds of tax cuts for the Rich & Corporate enacted were almost THREE TIMES as great as the cost of the Iraq war (including the costs of the military operations and subsequent reconstruction), all homeland security expenditures, the costs of rebuilding after September 11, all military action in Afghanistan, and all other costs of the ‘Global War On Terrorism’, COMBINED.
Throwing money at the Rich & Corporate has never succeeded as an economic policy and can be it’s own form of “destruction”.
“and Katrina Mess (courtesy of incompetent and corrupt local democratic governor and mayor)”
Actually, under the predetermined regulations, once the hurricane exceeded Cat 3, it was no longer the responsibility of the local or state governments.
Heck of a job, Bushie !
~~~
Be Greedy,
“Fact-1. Clinton had warnings about 9/11 and did nothing, not Bush.”
Even if true, which is silly, exactly what was President Clinton supposed to do about it when he was no longer in office ? The Bushies were specifically warned that hijackers might attempt to fly airliners into buildings, and they reacted by surrounding the Italian meeting site for the G8 with a ring of SAMs in August of 2001, but decided it was more important to go on vacation in September.
“The 9/11 attack was planned over ten years (during Clinton presidency).”
In Germany. So what ?
According to the ‘9/11 Commission’, the pilots entered the country in April and June of 2001, with the rest of the hijackers to follow. President Clinton left office in January.
Your attempt at logic is brain dead.
“You are probably not aware but there were prior bombing attacks on WTC during Clinton (Bombing of February 26, 1993).”
You are quite obviously unaware that It was President Clinton who sent a Special Forces team to pluck the mastermind of the first World Trade Center attack, Ramzi Yousef, out of Pakistan and return him to the U.S. for trial. He is serving a 240-year prison term, plus another life sentence just in case, all to be spent in solitary confinement. The 5 co-conspirators involved in the bombing were also captured by the Clinton administration, and all are also serving life prison terms in solitary confinement.
Conversley, the Bushies had Osam bin Laden, Mullah Omar, and their al-Qaeda forces who attacked us on his watch surrounded in Afghanistan at Tora Bora, but their sheer incompetence allowed them to escape, so the Bushies cooked up the distraction of illegally invading Iraq, and they STILL can’t find them.
~~~
Deepish,
“Notice that job growth in the 90s was significantly slower than for previous recoveries.”
??????
The national economy added an average of 255,000 jobs per month during President Clinton’s two terms, the highest during ANY administration.
“The recession wasn’t very deep. Unemployment topped out at just over 6%, which is low by historical standards.”
The economy is in the worst shape since the Great Depression, and the Unemployment Rate only declined from 6% because the number of jobless workers INCREASED, as the national labor forces shrank for seven years in a row.
#
It irks some folks when the subject of an economic post morphs into the political realm. I don’t see how the two can be separated. An analogy would be to discuss automobiles, but not gas mileage or engine performance. The resulting conversation might as well be about furniture.
My apologies to the host, but we got into our current situation because no one stood up to the fallacious claims of the corporate/governmental complex.
Yup. What Deepish Thinker said. Too many of you are sliding off to the Crazy Aunt end of the scale. You guys aren’t any fun anymore.
“So Zimbabwe’s economic disaster has nothing to do with the policies of Robert Mugabe? Seriously?”
Robert Mugabe has nothing to do with the United States. Seriously.
I’m back to searching, and a new & independent consulting client.
Monica and George,
Please seriously consider the following:
Who is really a conservative here? If you can remove your like or dislike of the current administration from the debate, you might be surprised by the results.
(Below are my opinions based upon observation of the content here)
Who here supports a “too big to fail” policy? Not Barry. Surely, as conservatives and free market advocates, you don’t fall into this camp, do you?
Who is constantly advocating for government accountability in terms of publishing legitimate statistics? Barry is. Do you believe what is published? I certainly hope not. If you did, it would not be consistent with your ideology.
Who is advocating transparency? Barry.
Who is advocating competition? Barry.
Who is advocating against socialism in the USA? Barry.
Who leans heavily toward the Austrian School of economics? Barry.
http://en.wikipedia.org/wiki/Austrian_School
Who is pointing out the problems with Keynesian economics? Barry.
http://en.wikipedia.org/wiki/Keynesian_economics
So who is the real conservative? Probably both you and Barry, economically speaking. He’s your new best friend if you can take off the political blinders and try to focus on the data and the economic issues.
A poisonous political climate and a divided country right now have people throwing rational thought out the window. I would submit, for the sake of argument, that you are currently more loyal to your political brand and/or leaders than to your party’s [prior] platform. Where is that leaner, smaller, less intrusive Government we were promised? I voted for Bush in 2000 … and I’m still waiting.
BTW: There are plenty of articles in the WSJ and Barrons (both Dow Jones publications) which align with Barry’s positions. They are linked to frequently on this blog (and they often link or reference him). The NYT’s / Liberal generalization you have made simply do not hold up.
Please enjoy this blog and hang out. It’s a fun space with a ton of great content.
The entire “Bush Boom” was all smoke and mirrors and crafted specifically for big corporations. Now the Bush administration has used $600B+ from the Fed balance sheet (taxpayer money) to rescue Wall Street from…well, Wall Street. And the taxpayer’s, well God bless Bush, he gave us $168B to divvy up between ourselves and Wall Street is still bitching about that.
Fredex wrote: “Robert Mugabe has nothing to do with the United States. Seriously.”
It demonstrates that the economy is not something that functions in a vacuum separate from government actions.
What do you think would happen to the US economy if Bush had the Pentagon bomb Ottawa and Mexico City, capitols of our largest trading partners? What do you think would happen to the US economy if Bush and a compliant Republican congress had lowered taxes to zero? What do you think would happen to the economy if Bush ordered the Treasury to default on our bonds?
Why do you think the US president has some magic protection such that stupid decisions he makes won’t effect the US economy? No other country has that protection, why do you think we do?
Ditto Fredex.
I don’t quite understand why folks think politicians, in particular whether they happen to be Republican or Democrat, have much to do w/ the domestic economy. And please, leave your lizard brains at home about FDR and how he saved us from the Great Depression.
Volker saved the US economy in 1982, not Reagan. Reagan just put a happy face on it.
The idea of a “Greenspan Put” is all you need know of that economic era.
And Bernanke’s helicopter looks to be sufficient at describing this one.
Not one of those guys was elected.
Bush is a lousy commander-in-chief and foreign policy strategist and that affects the economy (the dollar, particularly) some.
Clinton wasn’t much better, but didn’t have to be, as the end of the cold war left America unrivaled in power and prestige.
The next president is likely to be a one-termer like Carter, that will get blamed both for economic mailaise at home and declining American power abroad.
It will take 2012 (or perhaps, a new fed chief) to get back to real growth in the economy and American power and prestige (and the dollar), and then some new pol will rush to the front to take credit for what would have happened anyway. It’s the cycle of history.
“And please, leave your lizard brains at home about FDR and how he saved us from the Great Depression.”
I bet many of the people who say Presidents have no effect on the economy are the same people who insist FDR prolonged the Depression.
“I don’t quite understand why folks think politicians, in particular whether they happen to be Republican or Democrat, have much to do w/ the domestic economy.”
Because they priortize and enact the policy agenda which effects the domestic economy. It’s called, cause and effect.
Considering Bush came after the 90’s over investment tech/telecom, Y2K scare boom, it is no surprise the economy hasn’t grown as well. Job creation hasn’t been as impressive(and now outright poor). Bush Boom? Nah, unless you lived in the “big” regional housing boom states, oh yeah, illegals. They are probably another reason why job creation looks lower than expected as they weren’t counted, but that doesn’t help America much right?
Maybe in that idea of things, it grew to much with to much extension of credit that didn’t help much of America. I think Bush did have good intentions and maybe if conditions were different, it might have worked(granted probably fueled by envy and greed).
“I bet many of the people who say Presidents have no effect on the economy are the same people who insist FDR prolonged the Depression.”
FDR did things that aren’t likely to happen again. His use of executive orders to confiscate gold and close all banks are examples. He had a poor grasp of economics, a lot of bad economic advice, and willing help from congress critters. Smoot and Hawley as just two examples, were still around.
“bet many of the people who say Presidents have no effect on the economy are the same people who insist FDR prolonged the Depression”
LoL, good one. I used to believe in that to, but after actually studying the 30’s, the US grew wildly strong during the mid-30’s. It was just that the contraction was so strong that it was going to take years to recover from. After the last little hiccup recesssion, growth took off again between 39-41 and the depression ended.
If anything, FDR’s impact was overstated good or bad. Hence, I standby my idea: Presidents don’t have a major impact on the economy.
Bush for example, may have overestimated the depths of the 2001 recession and over “primed the pump” but that was in small circles compared to the height of the easy credit cycle which was the real culprit.
I think that is why O’neil was fired because he told Bush his policies weren’t that meaningfull and the economy was going to grow, recover from the recession no matter who was President.
Truth can be nasty.
Folks, we been had. Who thinks NAFTA was a great idea? Both groups promoted the crap out of it [Ross was right], and look what it got us. Now we simply sell shit to one another always bidding up asset prices until they collapse. Who woulda thunk it. We have got to take back our country from the assclowns that are running this country into the ground. Anyone for CAFTA? It should work out great as well. Two burger-flipping incomes ain’t gonna cut it.
On top of everything else, we have a FED that is making it up as they go along with the sanction of CONgress who says the FED saved the system when the FED f###ed it up in the first place. We are so scroomed unless J6P wakes the Hell up! Unfortunately I don’t think it’s gonna happen.
“It’s had to get a man to understand something when his job depends on him not understanding it”. Human nature at it’s finest. SIGH!
MA, I’m with ya. Investment Banking + Commercial Banking + Innovation = we are screwed. LOL! I have to give you at least 10 points for the use of all those fancy words in a sentence. LOL! As they say, “history may not repeat itself, but it sure as Hell rhymes”.
I will stay out of the food fight. You all are so busy pointing fingers at each other that both groups have you right where they want you. Again, they both suck, but by all means throw another pie.
“Don’t tax you, don’t tax me. Tax that fellow behind that tree!” Ev Dirksen.
To hell with politics. A pox on both their houses. Statesmanship went out with high button shoes.
Posted by: Ross | Apr 5, 2008 10:20:34 AM
Ross, thank you. Someone who gets it. We will fight one another right into 3rd world status while all the fat cats slip quietly away.
The real Bush Boom:
New study shows US lawmakers have as much as $196 million invested in defense companies
The Associated PressPublished: April 3, 2008
Greed is bipartisan. Unscrupulous behavior is bipartisan. Our economic system has politicians (termites) in it.
The real problem is that ever since the late nineteenth century when machines massively multiplied productivity, those who controlled the productivity amassed more and more capital at the expense of the hired help. The employees did less and less as machines did more and more. Pay for employees became a price to keep the machines running, not the employees happy.
What no one wants to admit is that human productivity simply can’t compete with increasingly sophisticated machines in productivity. We can’t all be creative artists so what happens to the plodders? The answer our Darwinian society has is to take their weapons away and let them starve. Some people are okay with that. I’m not. If it pleases your ego to fuck your buddy, then you are a parasite. Too many parasites destroy a society. Capitalism has become misanthropic because the honor and respect given humans that labor has been given to machines. Mises didn’t see that. His whole division of labor, productivity and anti-bureaucracy speal is a big dodge on greed mechanics. You can have efficient greed and inefficient greed but it’s still greed, still creates parasites and still destroys a society.
We need an economic baseline for what we can allow a human to sink to regradless of his productivity level. Then we will have a humane society, crime will go down, creativity will flourish and greedy goons will hold their stupid tongues. I’m not holding my breath waiting for that. The wealthy would prefer anarchy to justice for all.
“When will you start analyzing the data objectively without injecting your politically motivated and opinionated spin?”
Yeah! When will you do just that?
Why do you automatically assume that any bad news occurring since 2000 is an attack on Bush? Are you aware the Universe does NOT stop at Venice Beach or the Coast of Maine? Or that concurrent events, such as globalization, global warming, oil at 100+ a barrel happen outside the sphere of influence of the White House?
Aren’t you tired of having to hold on to the K-Y jelly and bend over your conscience (note that I am assuming you know what that is) every time anything that seems to “attack” the Bush Administration makes its way in the public space?
Get a life Dude!
Jon Hendry makes a very valid point. Very bad presidents, such as Mr Mugabe, can do enormous damage to an economy regardless of any other factor. However, it does not follow that a good President can make an economy better than other factors will allow. Presidents, like everybody else, work within constraints.
My point is that over the last twenty years there have been fundamental changes in the economy that have been far more important than the actions of either President Clinton or President Bush.
The root causes of relatively slow employment growth (technology driven productivity improvements, China) in recent recoveries aren’t really under the control of any president.
Don’t get me wrong, there are many entirely valid reasons to criticize the current administration. Slow employment growth just isn’t one of them.
8 years of peace and prosperity and some people just couldn’t handle it.
Sigh.
7 years of war and disaster and some people still think he’s the greatest thing since sliced bread. The 28 per centers will just never get it….
And, for the record, I’m registered libertarian, so none of your bitching about me being a whiny librul.
I guess I should take it as a compliment that i rate my own trolls . . .
“My point is that over the last twenty years there have been fundamental changes in the economy that have been far more important than the actions of either President Clinton or President Bush.”
I’d argue that most of the fundamental changes in the economy during the Clinton or Bush years are the effect of either them or their administration, directly or otherwise.
Let’s take NAFTA for example since some one mentioned it earlier. Did you get a chance to vote on that? Why not? Don’t we all have SSNs and don’t we all have some way of communicating let’s say to a site, a phone, etc and don’t we all get government TV in C-SPAN or some other public media? Why can’t a database of confirmed U.S. citizens via their SSNs be created, allowing them to vote directly on issues effecting the American people after having it explained by Representatives who could then present their arguement for or against the proposal? Majority rules. At the very least, this would take the vote out of the special interest group’s hands especially in economically sensitive areas. Sorry to drone on.
Donna,
How does one register as a libertarian? It’s not very libertarian of them to organize, is it?
Just kidding. I voted for the last time for Nixon in 68. I tired of going all the way with LBJ.
Seriously, there ain’t a nickels worth of difference between either party. JFK reduced taxes and Nixon imposed wage and price controls. Clinton was probably the best Republican since Eisenhower/Reagan. Bush is the best Democrat since FDR.
If you join a party, you just paint a bulls-eye on your back. Whoever ‘owns’ the media elects your officials. Some 18 year old crack head in L.A. cancels my vote. Bus an 85 year old feeble minded nursing home patient in Massachusett (this is actually done)to the polls and it cancels my vote.
Here we sit talking about corruption on Wall Street when the whole political system became decadent and corrupt generations ago. We have some ego.
Barry,
Is having trolls the same as having cooties? Damn I’m old!
mickslam said:
When the humans of the 50 years from now future look back upon this last 35 years, they are going to wonder why we allocated most of our civilizational resources to skimming money from worthy enterprises to put in the hands of already wealthy people.
I really hope that turns out to be true.
“The 28 per centers will just never get it….”
From the latest polls, they’re now “19 percenters”.
Shrinkage.
“The Bush Boom: How a Misunderestimated President Fixed a Broken Economy” is Amazon ranked #928,507. That’s even further down the popularity list than “Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market”, ranked only #841,861. But the “Bush Boom” is more popular than “Dow 30,000 by 2008: Why It’s Different This Time” ranked at #1,990,151.
Amazon’s #1 best seller is one of those inspirational books on how to study the ancient spiritual masters and find inner peace or something. Studying how to enjoy life lived in the now might be more profitable than listening to all these economics/business experts.
I got a call the other day from a recruiter (engineering contract work). He wanted to know if I was ready to rejoin the working world because his temp business is beginning to pick up. Anecdotal, but there you go.
Interesting you should mention that, engineer al. As engineer fred I just got an invite to join in a proposal to upgrade a fifteen year old automated manufacturing system. Maybe things are picking up more generally.
Things aren’t picking up “generally”. Things are just now picking up downward steam.
The next step is the low wage earners in the service industry. The icing on the cake and biggest of the job losers.
Machinery stuff, things with wheels. I wasn’t sure how to take the recruiter’s “news”.
It might mean business is picking up and some employers are beginning to think about hiring again.
It might also mean that business has finally fired everyone and discovered nothing gets done without “people”. Rather than hire “direct”, they’ve only loosened the purse strings enough to put back on some contractors?
I don’t catch Mr. Kudlow as often as I used to. Does he still use “Bush Boom” like he used to? Or, “the greatest story never told” to describe it?
Bush [ka]Boom.
My stocks went up a lot and my house value went up a little from ’92 to ’00. Sold the house and upgraded at the end of ’00 and sold that one just a couple months ago (this time downsizing). My stocks have gone up a little (but are still up) since early ’01, but the profits from the house sale blew it away. Since most of my net worth is in my home and not stocks, I’ve benefitted so much more during Bush than Clinton. I feel like anyone (except for the superwealthy) that has been a homeowner during both periods probably feels the same way. The small amount that bought for the first time in ’05 and ’06 are probably struggling, but I felt the same way in the early 90’s. I was better off in ’00 than I was in ’92 and I’m much better off now than I was in ’01. Definitely not complaining – can the rest of you get over it?
Political discussions are pointless. My viewpoint has just as much truthiness as yours.
Emperor Marcus Aurelius was a stoic. Meaning he believed that a wise man should be free from passion and submissive to Natural Law. (My definition of Natural Law – Sh!t happens, and then we fall in it.)
I think it’s obvious now why we shouldn’t discuss politics.
um Roger 10% of all homes are upside down right now. If homes decline another 5-10% how many more will realize the housing wealth effect was just the illusion from another blown bubble?
“8 years of peace and prosperity and some people just couldn’t handle it.”
hilarious, this is why we’re all doomed, people can’t even recall what happened a mere 10 yrs. WTC attack, USS Cole, Kobar towers, Kenyan embassies, Bosnia, etc, yeh the decade that spawned islamofascism sure was a peaceful time wasn’t it.
taxing the populace into a recession sure was a great strategy don’t you think? luckily we only had Y2K and the LARGEST BUBBLE in history to cover up that fact.
the economic acumen of this blog’s readers really shines through when they’re whining about a weak US $ and low interest rates, pfft
>> I will repeat here what I have been saying about President Bush for several years now:
>> He was a dealt a lousy hand, but he played the cards he was given about a poorly as possible.
>> Posted by: Barry Ritholtz | Apr 5, 2008 11:56:46 AM
That’s what I’ve been saying!!
>> “8 years of peace and prosperity and some people just couldn’t handle it.”
>> hilarious, this is why we’re all doomed, people can’t even recall what happened a mere 10 yrs. WTC attack, USS Cole, Kobar towers, Kenyan embassies, Bosnia, etc,
1 million dead civilians during that time?
The person was making a comparative statement.
If you read “8 years of peace and prosperity and some people just couldn’t handle it” as a claim of “zero deaths/incidents”, you’re probably an idiot. (Your other statements are corroborative.)
>> Posted by: Hillary’s strapon | Apr 6, 2008 1:53:14 AM
Clearly, you’ve been taking cues from right-wing radio. I dislike the Clintons. But, you guys seem to have issues with her because she’s a woman.
>> Unless you actually believe that Al Gore created the internet,
No one believes that. But, he did help fund it and usher it in. Steve Jobs didn’t code any of the Mac OS. And he stole the idea from Xerox. But, the decision to fund an idea — one that proves very, very useful — deserves some credit. You give credit to Steve Jobs, right?
SPECTRE, I love your econ posts. And I agree both groups suck on average. But, there are differences. And, more importantly, some individuals are better than others. On the GOP side, some folks like Lincoln Chaffee, Ron Paul, and the GOP guy (forget his name) who repeatedly tried censuring Tom Delay are fine examples. On the Left, there are people I like, too. The “they’re all the same” meme works against us picking out the good ones from the bad. And it keeps the public disinterested in government and therefore willfully ignorant on matters theoretically within its control.
Yes, “they’re all bad” if we choose not to distinguish. But, distinguish we must! This isn’t something we should give up on.
I understand you not wanting econ threads to repeatedly turn into political debates. And you’re right that there are other forums for it. I just hope you personally do spend time selecting your candidate(s) and voting, because I’m sure you make better choices than the average Joe. The country needs your vote and your influence with your friends. The more you distinguish, the more your friends will distinguish. That’s better for all.
ROUND 2: The Purple Kool-Aid Flows
Deepish,
“Unless you actually believe that Al Gore created the internet”
Except Gore never claimed he “created the internet”.
“Slow job growth is a result of macroeconomic factors largely beyond the control of any president.”
Then why is it so prevalent during the Republican ones ? Why is there slower economic growth, slow or negative job growth, rising income inequality, rising Poverty, and poor performance in the stock markets during Republican administrations, while there is faster economic growth, faster job growth, rising income equality, declining Poverty, and much better performance in the stock markets during Democrat administrations ?
~~~
DonKei,
“I don’t quite understand why folks think politicians, in particular whether they happen to be Republican or Democrat, have much to do w/ the domestic economy.”
See previous post.
“Volker saved the US economy in 1982, not Reagan. Reagan just put a happy face on it.”
Exactly how was the US economy “saved” during Reagan ?
He left office with the largest federal budget deficits in history (At the time. Who could have imagined the present day ?) and a massive level of accumulated federal debt. The annual job growth rate during his administration was lower than during any post WW II presidency before him, with an average Unemployment Rate of more than 7.5%. There was a net loss of manufacturing jobs every single QTR that he was in office. The Standard of Living of the vast overwhelming majority of Americans went backwards by about 20% during the 12 years of Reagan/Poppy Bush.
“Clinton wasn’t much better, but didn’t have to be, as the end of the cold war left America unrivaled in power and prestige.”
He inherited massive federal deficits and debt, with the debt growing faster the economy, the previous four years of negative job growth in the private sector, rising joblessness with a declining number of workers in the national workforce, and a poor economy.
Turned it all around to federal budget surpluses, the best job growth of any administration in history, rising real wages, the largest drop in Poverty in decades, and an economic Golden Age.
~~~
SPECTRE,
“Who thinks NAFTA was a great idea? Both groups promoted the crap out of it [Ross was right]”
Perot was wrong.
There were more manufacturing jobs in America at the end of President Clinton’s terms than when he arrived. Manufacturing was a larger percentage of the national economy when he left office than when he arrived.
Recent case in point, when NAFTA took effect, Ohio had 990,000 manufacturing jobs. Two years later, in 1996, it had 1,300,000 manufacturing jobs. The number stayed well above a million for the rest of the 1990s. Today, though, there are only about 775,000 manufacturing jobs in Ohio. Those jobs were off-shored starting in 2001, mostly to China, but not to Mexico.
~~~
Ross,
“Seriously, there ain’t a nickels worth of difference between either party.”
That’s downright silly.
* One party wants to scrap Social Security and give it to Wall Street to collect commissions off of, the other wants to shore it up.
* One party wants to increase the Federal Minimum Wage, the other wants to eliminate it.
* One party wants more tax cuts for the Rich & Corporate, the other wants a more equitable taxation plan.
* One party wants more Corporate Welfare for oil companies, the other wants to shift to sustainable energy.
I could go on for pages.
“Clinton was probably the best Republican since Eisenhower/Reagan”
Which is why every single Congressional Republican voted against his budget/tax plan in 1993, claiming it would be a job killer and plunge the economy into recession. The majority of Congressional Republicans also voted against all the rest of his legislative accomplishments as well.
Some Republican.
“Bush is the best Democrat since FDR.”
Chimpy is so far removed from any Democratic principles, I have to assume you’re joking.
#
VJ-
It is astonishing how deluded people can be isn’t it? You rattle off fact after fact about how good Clinton was for the economy, but these dead-enders can’t get it. I mean, if unemployment as measured during the bush years was so fantastic, why didn’t wages go up 20%, or even by some measures, up more than 0%, in real terms? That they can’t answer this question in less than 200 words and without invoking conspiracy theory is simple proof the ‘Bush boom’ was for most of the country a ‘Bush bust’.
There are very important reasons why 81% of the country thinks we are headed in the wrong direction, and the so called ‘liberal media’ has nothing to do with it. We’ve seen the documentation of one-way cheerleading for the republican policies laid out on this very blog, so if anything, the coverage of the economy has had a very republican spin on it from the mass media. Additionally, the war hasn’t been reported on in the mass media for the last 18 months to any great extent – if you doubt me, go to msn and cnn.com right now and find the war on the front page. The headline on CNN is that Charlton Heston is dead and there is one link out of maybe 50 that goes to a story on Iraq. No, the reason why 81% of the people think we are on the wrong track is because of their personal experiences with the economy and their view of the war that they’ve come to without media help.
These guys are still bringing up total BS like “Al Gore claims he invented the internet.” and “Clinton inherited a boom” and “Clinton, not Bush, is responsible for 9/11”. What passes for facts in their minds doesn’t pass for facts in the real world.
There is nothing to do about these 27% of people who would actually vote for Alan Keyes over Barak Obama, except show them the facts over and over in the hopes that others with more intelligence and foothold on reality but haven’t been exposed to the facts on the economy will make their own decisions.
Monica, listen you are embarrassing yourself, “All those “Clinton jobs” (aka Y2K related and internet bubble jobs) had evaporate as fast as they were created,”
I had one of those jobs for 7 years while Clinton was Prez and it went to INDIA, not away as you say. IBM fired 75,000 Americans and hired 75,000 Indians, uh duh, the jobs didn’t go away.
Intel just closed that last chip plant in Silicon Valley. Did they q1uit making chips?
HP, AT&T, DELL, Pfizer, go down the list. The jobs left the US but they didn’t leave and anyone who posits that simply doesn’t know or understand what has happened to this country under the lost decade of Bush.
The stock market gains and employement gains have been totally lacking.
Wunsacon, I agree that both groups have individuals that are far better than the groups they belong to although Ron Paul this very week makes me think otherwise. What a joke his bumbling question was when he had Bernanke’s ass nailed to the wall on Constitutional grounds and let him walk. My point was/is that the corruption has been institutionalized to the point of no difference. I don’t believe in the tooth fairy anymore either.
I have read all the posts on this thread, and I must say what a frigging waste of brain power by all involved. Everyone wants to talk about the past while ignoring the hard choices we must make as a country concerning the future. It’s far easier to point fingers than it is to come together and recognize those assclowns in DC can give a shit about J6P. Let’s be perfectly honest and say that the 3 assclowns we have to choose from for President are pathetic, and let’s also say that the leadership of both groups suck the biggest one out there.
If this thread is a microcosm of the nation, and I believe it is, we are totally screwed. You will argue amongst yourselves while Rome burns, happy in the fact that you get bread and circus.
VJ, I’m not taking part in your food fight other than to say President Clinton and Vice President Gore both promoted NAFTA. Hell, Gore even debated Ross on CNN regarding NAFTA, and Ross was right. I really don’t give a shit whether you believe that fact or not or that President Clinton signed NAFTA into law. Go fight with someone else, and leave me alone.
NAFTA was signed into law by President Clinton on December 8, 1993. End of story!!!!
“My apologies to the host, but we got into our current situation because no one stood up to the fallacious claims of the corporate/governmental complex.”
MA, both groups are part of your corporate/government complex, and it was Eisenhower who warned us this would happen. I’m not disagreeing with you, but I want to make clear that in my book, both groups can give a rat’s ass about J6P. Bread and circus for the subjects while Rome burns. Sad!
VJ, how’s about you live and learn partner. Here is the entire transcript between Al Gore and Ross Perot on Larry King. The Internet is your friend.
http://ggallarotti.web.wesleyan.edu/govt155/goreperot.htm
VJ, here’s where your jobs in Ohio went:
China and WTO: Battles Ahead
November 24, 1999
Just weeks before the World Trade Organization Third Ministerial Meeting in early December, China and the United States reached a landmark agreement on the terms of China’s entry into the World Trade Organization (WTO). While the accord removes a number of obstacles to China’s entry into the international trade body, it signifies only the beginning of a long accession process. The upcoming battle for the trade deal in the U.S. Congress, and the market access agreements China still has to negotiate with some twenty-three countries, including the EU and Canada, represent some of the many future challenges that await China and pro-China groups in the United States.
Following concessions made in the areas of agriculture, textiles and finance on the part of the Chinese government, significant progress was made on the terms of China’s accession to the WTO during Prime Minister Zhu Rongji’s April visit to the United States. However, early debate over the merits of the agreement within the Clinton administration, the U.S. bombing of the Chinese embassy in Belgrade, and continuing tensions across the Taiwan Straits delayed further discussion for much of this year. According to Daniel Rosen former Institute of International Economics Scholar, the agreement signed this November is largely consistent with terms negotiated by the U.S. and Chinese teams in April.
Accession to the WTO will further open China’s domestic markets to trade and investment, and include permanent normal trading relations (PNTR) status for China, which requires passage by the United States House of Representatives. Permanent NTR, formerly known as Most-Favored Nation status (MFN), will ensure Chinese goods receive the low-tariff access to U.S. markets that almost every other nation receives.
Under the recent agreement with the United States, China will reduce average import duties to 17 percent from 22.1 percent after WTO accession. Export subsidies and tariffs on farm goods, automobiles and auto parts will be eliminated. China will allow 49 percent foreign ownership in telecommunications firms, with an increase to 50% after two years. U.S. banks, insurance companies, and film producers will be given greater access to domestic markets. Also, China’s ban on foreign investment in Internet companies will ‘no longer be an issue,’ says Charlene Barshefsky, U.S. Trade Representative.
In China, the government has established working groups to inform the various ministries and industry leaders on the terms of the agreement, and the possible effects of WTO membership on sectors of the economy. President Jiang Zemin and Premier Zhu Rongji must prepare a population that is still grappling with the implications of the agreement—many Chinese are currently supportive, but wary of the effects of a widespread market opening on weak industries. While WTO membership is expected to raise the efficiency of domestic firms, and contribute to GDP growth, workers in China’s state sectors, already facing high unemployment, are expected to be particularly affected by the accord. Lower tariffs on cotton, wheat and other farm products, according to Hu Angang, an economist at the Chinese Academy of Sciences, could shock China’s vast agricultural economy.
Preparing for a fight with the Republican-dominated Congress, President Clinton has asked business groups and pro-China interests to play a lead role with the administration in lobbying for the agreement. A broad coalition of groups opposed to the China WTO agreement is brewing within Congress. Labor, environmental, human rights, and manufacturing trade groups are preparing to rally against the agreement when the House votes on it early next session. Ohio Democrat U.S. Representative, Sherrod Brown, was quoted as saying, “We’re going to make this the biggest vote in the 106th Congress.” Some have also raised concerns as to whether China will live up to the terms of the agreement and implement the market access protocols.
While a number of steps lie ahead for China, China is expected to participate in this November’s Third Ministerial Meeting as an observer nation, while playing a more substantial role upon accession.
Like I said before, anyone who thinks there’s a difference between the two groups is a sap! By all means, keep deluding yourselves while Rome burns.
Kevin Hassett (author of 1999’s, “Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market”) is listed on John McCain’s campaign website as one of his “economic policy advisors”.
:)
I love that when you click on the Amazon link, this valuable book can be purchased for $0.01!
SPECTRE,
I’m glad to see you’re doing so well knocking down the Straw Man you invented out of thin air.
Where did I claim that President Clinton did not sign NAFTA, or that he and Gore never promoted it ???
You claimed Perot was right. I posted that Perot was wrong, for the specific reasons I listed:
There were more manufacturing jobs in America at the end of President Clinton’s terms than when he arrived. Manufacturing was a larger percentage of the national economy when he left office than when he arrived.
That flys in the face of Perot’s predictions. Not to mention that he also wanted a 50 cent per gallon gasoline tax. It wasn’t his aunt in the attic that was crazy.
~
As to your new assertion:
“here’s where your jobs in Ohio went: China and WTO: Battles Ahead November 24, 1999”
Except the number of manufacturing jobs in Ohio remained well above one million until 2001, and the WTO was enacted in 1947. It was known then by it’s former name GATT, the ‘General Agreement on Tariffs and Trade’. They changed their name in the early ’90s.
Corporate America is laughing all the way to the bank at all the people who are attempting to blame trade agreements for their intentional off-shoring of jobs. GM didn’t require NAFTA when they off-shored all the manufacturing plants from Flint Michigan. The movie that documented it all, Roger & Me, was released in 1989.
.
Corporate America is laughing all the way to the bank at all the people who are attempting to blame trade agreements for their intentional off-shoring of jobs. GM didn’t require NAFTA when they off-shored all the manufacturing plants from Flint Michigan. The movie that documented it all, Roger & Me, was released in 1989.
VJ, so are the stooges you back.
VJ, true believers like yourself refuse to see cause and effect. Loss of jobs to China and India didn’t start in 2001. When China joined WTO, it took some time to ramp up because it’s not like flipping a light switch. These things take time. Did you know that in the last 8 years the Clinton’s net worth jumped $109 MILLION DOLLARS? Don’t lecture me about corporate America when the politicians institutionalize theft.
In 1999 Glass Steagall was done away with by President Clinton. As I said, you have a problem with cause and effect. All true believers do.
While I’m at it, I might as well say that Obama is full of shit. The man goes to a church where we get, “GOD DAMN AMERICA”, yet we are to believe per Obama that he had no idea. You are a f###ing moron if you believe this. You will all delude yourselves right into 3rd world status, and you deserve it.
More NFP: Worse than Reported
This weekend, we noted that in terms of job creation, the 2002-07 post-recession recovery was the very worst in the post-WWII era. This was in response to the pundit commentary that job losses aren’t nearly as bad today as the 2001 mild consumer-led re…
I “back” “stooges” ?
Who knew ?
.
VJ, I’m sure it’s a surprise to you based on your posts although it makes it no less the truth. Clinton Rah Rah Cheerleading shows you are a true believer regardless of the facts. I have no more time to waste on sophmoric back and forth. $109 MILLION DOLLARS in the last 8 years says you are dead wrong. You are one of the bread and circus crowd who will wonder what happened when it all goes to Hell in a handbasket. Good luck.
SPECTRE,
“Clinton Rah Rah Cheerleading shows you are a true believer regardless of the facts.”
To paraphrase President Truman, I’m just giving you the FACTS, and you THINK it’s cheerleading.
Your problem, not mine.
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VJ, Just saw this and had to post it just for you because you mentioned Ohio. Viva La NAFTA and El Presidente’ Clin-toon:
More bad news on the economic front, two companies, La-Z-Boy and Whirlpool are giving out termination notices and moving their operations to Mexico. Hundreds of workers in the Dayton and Cleveland areas will soon be out of jobs when the new facilities in Mexico open in January.
La-Z-Boy’s CEO stated that, “Speed to market for custom orders is a tenet of our brand promise to the consumer and the strength of our U.S. facilities enables us to deliver on that promise. With its proximity to the U.S. and the lower cost structure inherent in a Mexican-based operation, we made the decision to transition our domestic cutting and sewing operations while streamlining the assembly aspect of production in the United States.”
La-Z-Boy also stated, “Our new Mexican facility will be able to rapidly supply our domestic plants with cut-and-sewn fabrics and leather for custom orders and will complement the existing cut-and sew program from China, which supplies our U.S. manufacturing operations with kits for our high-volume SKUs.”
Sure, but:
A) There was a NET gain in jobs until 2001 when the off-shoring to China and other countries exploded, with has nothing whatsoever to do with NAFTA, as those countries are not in North America.
B) Once again Corporate America did not require NAFTA to move jobs to Mexico. It happened long before, and after.
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I think the pundits are also forgetting that the 1099 folks (realtors/truckers/contractors/etc.) won’t show up in these statistics.