Bush = Good Economic Record ?

Wow, I simply do not know where to begin with this one: Bush Has a Good Economic Record.

Tell you what, rather than me telling you why I think this is a steaming pile of enzyme free donkey fazoo, flying in the face of all evidence to the contrary, let’s crowd source this:  How many analytical errors, half truths, misstatements, and out of context data points can you find in this commentary?

If you cannot access the full OpEd, its posted (temporarily) after the jump

>

Source:
Bush Has a Good Economic Record
KEITH MARSDEN
WSJ, September 3, 2008; Page A23 
http://online.wsj.com/article/SB122039890722392873.html

>

Successive speakers at the Democratic National Convention poured scorn on President Bush’s economic record. The clear aim was to justify the party’s call for "change," and to undermine support for Republican presidential nominee John McCain. His election would mean a "third Bush term," delegates groaned.

Yet Democrats cited no good evidence for their claims that the administration has produced a stagnant economy, widening disparities of income and wealth, high unemployment, and a heavy burden of government debt (supposedly resulting from an unwise military intervention in Iraq).

How does the performance of the U.S. economy really compare with other advanced economies over the eight years of George Bush’s presidency? Data published by the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), the World Bank, the International Comparison Program (ICP) (a cooperative venture coordinated by the World Bank) and the U.S. Census Bureau allow a nonpartisan, factual assessment. Here are some of the findings:

– Economic growth. U.S. output has expanded faster than in most advanced economies since 2000. The IMF reports that real U.S. gross domestic product (GDP) grew at an average annual rate of 2.2% over the period 2001-2008 (including its forecast for the current year). President Bush will leave to his successor an economy 19% larger than the one he inherited from President Clinton. This U.S. expansion compares with 14% by France, 13% by Japan and just 8% by Italy and Germany over the same period.

The latest ICP findings, published by the World Bank in its World Development Indicators 2008, also show that GDP per capita in the U.S. reached $41,813 (in purchasing power parity dollars) in 2005. This was a third higher than the United Kingdom’s, 37% above Germany’s and 38% more than Japan’s.

– Household consumption. The ICP study found that the average per-capita consumption of the U.S. population (citizens and illegal immigrants combined) was second only to Luxembourg’s, out of 146 countries covered in 2005. The U.S. average was $32,045. This was well above the levels in the UK ($25,155), Canada ($23,526), France ($23,027) and Germany ($21,742). China stood at $1,751.

– Health services. The U.S. spends easily the highest amount per capita ($6,657 in 2005) on health, more than double that in Britain. But because of private funding (55% of the total) the burden on the U.S. taxpayer (9.1% of GDP) is kept to similar levels as France and Germany. The U.S. Census Bureau reports that 84.7% of the U.S. population was covered by health insurance in 2007, an increase of 3.6 million people over 2006. The uninsured can receive treatment in hospitals at the expense of private insurance holders.

While life expectancy is influenced by lifestyles and not just access to health services, the World Bank nevertheless reports that average life expectancy in the U.S. rose to 78 years in 2006 (the same as Germany’s), from 77 in 2000.

– Income and wealth distribution. The latest World Bank estimates show that the richest 20% of U.S. households had a 45.8% share of total income in 2000, similar to the levels in the U.K. (44.0%) and Israel (44.9%). In 65 other countries the richest quintile had a larger share than in the U.S.

Investment has been buoyant under President Bush. According to the ICP, outlays on additions to the fixed assets (machinery and buildings, etc.) of the U.S. economy amounted to $8,018 per capita in 2005 compared to $4,963 in Germany and $4,937 in the U.K. Higher taxes on the upper-income Americans, as proposed by Mr. Obama, are likely to result in lower saving and investment, less entrepreneurial activity and reduced availability of bank credit. Lower-income Americans would be among the losers.

When considering the distribution of income and wealth in the U.S., another factor that should be taken into account is the sharp rise in the number of immigrants. The stock of international migrants (those born in other countries) in the U.S. grew by nearly 10 million from 1995 to 2005, reaching a total of 38.5 million according to the World Bank.

The inflow of migrants may have restrained the growth of average income levels in the bottom quintiles. Nevertheless, their earnings still allowed immigrants to remit $42 billion to their families abroad in 2006, double the level in 1995. So the benefits are widely spread among the families of immigrants remaining abroad — an important U.S. contribution to the reduction of poverty in these countries.

– Employment. The U.S. employment rate, measured by the percentage of people of working age (16-65 years) in jobs, has remained high by international standards. The latest OECD figures show a rate of 71.7% in 2006. This was more than five percentage points above the average for the euro area.

The U.S. unemployment rate averaged 4.7% from 2001-2007. This compares with a 5.2% average rate during President Clinton’s term of office, and is well below the euro zone average of 8.3% since 2000.

– Debt interest payments. The IMF reports that the interest cost of servicing general government debt in the U.S. has averaged 2.0% of GDP annually from 2001-2008, compared with 2.7% in the euro zone. It averaged 3.2% annually when President Clinton was in office.

The cost of the wars in Iraq and Afghanistan has been largely absorbed in a relatively small increase in the defense budget (to 4.1% of GDP in 2006 from 3.8% in 1995). A much higher proportion of U.S. income was devoted to the military during World War II and the Korean War.

The evidence shows that much of the Democratic Party’s criticism of President Bush’s economic record is wide of the mark. True, the economic slowdown now affecting most advanced countries will likely result in rising unemployment over the coming months. But thanks to sensible policies pursued by the Bush administration (not always with adequate support from a Democratic-controlled Congress), the U.S. economy is sufficiently flexible to keep unemployment below the 7.7% peak reached in the last postrecession year of 1992.

The main risk is that, if elected, Barack Obama will pursue a "social justice" strategy. This would encompass higher taxes on entrepreneurs, savers and investors, more direct government intervention in the economy, and protectionist policies (including revoking existing trade agreements) aimed at safeguarding the jobs of his union backers in "old" industries and public services. If so, the pain is likely to be more widespread and prolonged.

~~~~

Mr. Marsden, a fellow of the Centre for Policy Studies, was formerly an adviser at the World Bank and a senior economist in the International

Print Friendly, PDF & Email

What's been said:

Discussions found on the web:
  1. Troy commented on Sep 3

    Before hovering over the link, I knew it would go to online.wsj.com

  2. Jeff M. commented on Sep 3

    Is this another Jerry Bowyer book that will sell for a dollar on Amazon?

  3. bsneath commented on Sep 3

    It is all relative – it could have been much worse given 911, SAARs, the DotCom Crash, etc. btw, it comes to me that the one activity that will get us out of the current recession will be domestic energy production of all types. The Republicans will have the upper hand on this issue because the Dems are too beholden to the earth worship leftists, IMO.

  4. X commented on Sep 3

    Another Larry Kudlow vision of goldilocks !

  5. Ross Thompson commented on Sep 3

    Wow. I don’t know where to start. One of the highest growth rates..using what for an inflation adjustment? The CPI? Per capita health costs…what does that mean? Most developed countries spend half what the US does and have as good or better health care score cards. A virtual doubling of the national debt for my kids and grandkids enjoyment? Come on.

    Whatever happened to careful, thoughtful and thorough analysis? Is all mainstream media just a mouthpiece the Murdochs and GEs of the world?

    Lest you think I’m one of those pinkos, I will point out I have spent 30 years in corporate finance and private tax practice.

    Ross

  6. Troy commented on Sep 3

    President Bush will leave to his successor an economy 19% larger than the one he inherited from President Clinton.

    And a national debt 72% greater.

    GDP per capita in the U.S. reached $41,813 (in purchasing power parity dollars) in 2005. This was a third higher than the United Kingdom’s, 37% above Germany’s and 38% more than Japan’s

    Our GDP is inflated by imputed rents and hedonic adjustments.

    Our mean national household income is ~$60K. The number of households is ~116M, implying our true GDP should be $7T, for a TRUE per-capita GDP of $23,000.

    The ICP study found that the average per-capita consumption of the U.S. population (citizens and illegal immigrants combined) was second only to Luxembourg’s

    American households were $8T in debt at the end of 2001 and will be over $15T in debt by the end of 2008, an increase of 87%.

    The U.S. spends easily the highest amount per capita ($6,657 in 2005) on health, more than double that in Britain.

    And has the health outcomes of a 3rd world nation. We have the higher overheads of any health delivery system.

    The uninsured can receive treatment in hospitals at the expense of private insurance holders.

    This is an outright lie. The uninsured MAY receive treatment in SOME urban hospitals for EMERGENCY care.

    in 65 other countries the richest quintile had a larger share than in the U.S.

    LOL. nice shift away from the first-world for quintile-level comparisons of income distribution.

    The U.S. employment rate, measured by the percentage of people of working age (16-65 years) in jobs, has remained high by international standards

    This is because we don’t count the unemployed when their benefits run out.

    the U.S. has averaged 2.0% of GDP annually from 2001-2008, compared with 2.7% in the euro zone. It averaged 3.2% annually when President Clinton was in office.

    Nice way to saddle Clinton with St Ronnie’s debt service!

    It’s also amazing how you can spin the numbers when you fake the GDP.

    In 1998 we paid $363B on net interest, in 2008 we will have paid $500B, a 37% increase.

    The cost of the wars in Iraq and Afghanistan has been largely absorbed in a relatively small increase in the defense budget

    BULLSHIT! We’ve borrowed that money, every penny of it!

  7. VennData commented on Sep 3

    It’s 19% total growth in the economy measured in dollars, which are half the value against the Euro a down 26% against the world basket.

    If inflation is 2.3% or more, the 2.2% growth this guy likes so much that’ negative growth. Could Gas, Health Care, education, food and housing be up more than that? They used a 1.2% deflator adjustment this last quarter down from the 1.8% deflator they’ve been stuck on at the BLS

    Household consumption has always been more in the US but the difference is LESS under Bush. Funny how they left the old numbers, from 2000, out.

    Is spending the most on Health care good? That’s because the GOP Congress (They had a 9% approval back then too) and Bush signed a Medicare prescription drug benefit that doesn’t allow the government to negotiate prices. We negotiate price on some of the most sensitive procurements of national defense, computers, etc.. but not Health care. Stupid.

    Life expectancy is hilarious they compare today’s US rate with one country’s old rate. Nice stat.

    The investment number is all about housing, which sit empty, are being foreclosed and add no productivity enhancements.

    The list is nutty and he claims to know Obama is going to run a “social justice” strategy. More empty GOP media machine catch phrases.

  8. Oscar commented on Sep 3

    lol!! nice one!

  9. SR commented on Sep 3

    A fine piece of creative truthtelling by a devoted apparatchik.

  10. AGG commented on Sep 3

    I’m sorry Barry.
    I just couldn’t bring myself to even look at the propaganda. The fascists are going down fighting. Well bully for them.
    You just walk out your door in Vermont and you know that people aren’t just angry; they are fatigued. Every ounce of energy people in this country have will be devoted to ousting incumbents (Republican AND Democrat). With few exceptions, we’ve got about 435 problems in congress, 100 problems in the senate, RATS in the supine court (Roberts, Alito, Thomas and Scalia) and two bozos in the White House.

  11. RW commented on Sep 3

    Right out of the gate the article begins by describing the Democrats scorn for the Bush economic performance in their convention speeches and then, in the beginning of the next paragraph, states they “cited no good evidence” to support this claim.

    Now this may sound like nit picking but what the writer is setting up is a rather carefully calculated lie, or a misleading half-truth if one prefers, because with the exception of Ross Perot and the early Obama (he’s learned better since) there are very few politicians who will risk losing their audience by citing “good evidence” in speeches, they leave that to surrogates, media, academia, etc.

    Which leads right into the initial closer since “citing no good evidence” — did you note there is no support for this claim — appears to be referring only to the speeches but its placement in the following paragraph could be interpreted as a reference to all the evidence available. Needless to say there is an absolute mountain of evidence and analysis out there delineating the relative poverty of Bush’s economic performance (which I’ll leave to others to cite).

    In any case this first turn nicely moves the initial set up into the following paragraph which appears to dispassionately make the case — note the contrast to the Democrats “poured scorn” — for Bush’s good economic results but rather than beginning with the historical record, which would of course necessitate a comparison to the Clinton administration’s far superior results much too early in the piece, the writer moves first to an international comparison using multiple data sources which, not coincidentally, allows cherry picking of data from the source that makes a particular comparison look most favorable to Bush and/or reference to data that is more fuzzy or prone to misinterpretation allowing it to appear more favorable to Bush.

    I’ll stop there but wish to reiterate that this article is clearly not intended to actually inform its readers; it is a skilled, well-developed, politically driven sales piece. I stopped reading after the first few paragraphs because it was giving me a headache but based on the initial paragraphs will predict that there are few if any readily demonstrable falsehoods in the entire article. It’s advertising copy, well done, but that’s all.

  12. Chip Pitfield commented on Sep 3

    Come on, guys. Let’s forget the left/right, anti-Democratic Party / anti-Republican Party rhetoric. We’re all patriotic. We’re all hugely fortunate. And we’re all grossly over-consumptive.

    George Bush is a thug; he’s a war criminal by any measure; and he’s been an economic disaster. We have to change the way we live. We have to stop spending money as if it comes out of a tap (i.e. today’s announcement that we’ll give a billion bucks to Georgia is obscene – we don’t have it, we’ll have to borrow it, and your kids and my kids will have to pay the money back).

    We will NEVER get out of this mess without drastically changing our habits. There is no easy solution that will not cause an immense amount of dislocation and pain.

    And let’s make our decisions based upon facts. We will NEVER be energy self-sufficient. We will, at some point, not be WATER self-sufficient. Step #1 in dealing with both of these issues is conservation. It is NOT bombing the shit out of somebody 12,000 miles away (or in Canada, for that matter).

    So let’s collectively get our heads out of our asses and start wrestling with the real issues.

  13. Tim commented on Sep 3

    Life expectancy:-

    “While life expectancy is influenced by lifestyles and not just access to health services, the World Bank nevertheless reports that average life expectancy in the U.S. rose to 78 years in 2006 (the same as Germany’s), from 77 in 2000.”

    US-78.06
    DE-78.95

    Source CIA

    Note it is estimated that curing cancer would increase life expectancy by about 1.5yrs

    The gap is material!

  14. jackdan commented on Sep 3

    You really don’t have to go past the first one to see misleading statistics in action:

    “Economic growth. U.S. output has expanded faster than in most advanced economies since 2000. The IMF reports that real U.S. gross domestic product (GDP) grew at an average annual rate of 2.2% over the period 2001-2008 (including its forecast for the current year). President Bush will leave to his successor an economy 19% larger than the one he inherited from President Clinton. This U.S. expansion compares with 14% by France, 13% by Japan and just 8% by Italy and Germany over the same period.”

    It looks like he is comparing GDP growth in constant home currency (and has a mistake for Germany, which should be 10%).

    Sure, we beat Italy, Japan, Germany, and France. Woo hoo! But we were 152nd out of 179 countries. Our economy grew slower than the UK, Canada, Mexico, and Israel, among others.

    But even this sub-par performance is due in large part to our relatively rapidly growing population. GDP per capita is a better measure of standard of living. GDP growth per capita in constant national currency was only 9.6% in the US…slower than both Germany (10.2%) and Japan (12.4%)…as well as all other developed countries except for Italy and France. So woop-de-doo, our economy grew faster than those two perpetual losers. And we got beat by such economic powerhouses as Lebanon, Nepal, and Uganda…as well as everyone of our neighbors, including Mexico, Canada, UK, Brazil…you name it.

    Way to go Bush!

  15. Winston Munn commented on Sep 3

    Why do I keep hearing the words of George Orwell?

    “In a time of universal deceit – telling the truth is a revolutionary act.”

  16. Steve Barry commented on Sep 3

    I didn’t think anyone could be less inspirational than Meg Whitman just was at the RNC…until they brought Carly Fiorina on.

  17. jackdan commented on Sep 3

    This clearly wasn’t an honest effort by Marsden.

    Of course, if he is on the WSJ opinion page, I really don’t need to find evidence to back up that accusation.

    But even if he didn’t think to consider the per-capita numbers rather than the totals, which would be an elementary issue for any competant economist, he must have looked at the data on growth and seen we were near the bottom…and then scoured the list for the four OECD economies that we beat…never mentioning the dozens that performed better than us.

    A true spin job.

  18. Jim-Bob Jones commented on Sep 3

    Why would we compare the US economy under Bush to other countries? We should compare the US economy under Bush to the US economy under other Presidents. This OpEd is a joke and is clearly meant to mislead and misdirect.

  19. kent commented on Sep 3

    I’m confused.

    Would someone please tell me again why on Earth we’re handing out Stimulus Checks?

    I woulda thought the alphabet soup of lending excuses over at the Fed woulda been a clue that things might not be quite right somehow.

    Anybody around here shouting “Hooray!” every time they’re opening their 401k statement?

    GM is dumping Hummer because of…

    You don’t even have to address the Journal’s figures. We all have wallets. We are trading our asses off to keep from being down 800% or something.

    I’ve voted Republican all my life, but this mess is outta control — my fixed-income family members are starving. Don’t give me that crap about being flush.

    By the way, I think anyone who believes these numbers should visit Shadowstats.com. You’re in for an epiphany.

    kent

  20. Paul commented on Sep 3

    Never overestimate the intelligence of the voting public.

  21. Joe Klein’s conscience commented on Sep 3

    AGG:
    You say 100 problems? Don’t you like Bernie Sanders? I’d say 98 problems in the Senate(you can keep the whole House) as Feingold and Bernie Sanders are keepers.

  22. Joe Klein’s conscience commented on Sep 3

    AGG:
    You say 100 problems? Don’t you like Bernie Sanders? I’d say 98 problems in the Senate(you can keep the whole House) as Feingold and Bernie Sanders are keepers.

  23. Joe Klein’s conscience commented on Sep 3

    AGG:
    You say 100 problems? Don’t you like Bernie Sanders? I’d say 98 problems in the Senate(you can keep the whole House) as Feingold and Bernie Sanders are keepers.

  24. Joe Klein’s conscience commented on Sep 3

    AGG:
    You say 100 problems? Don’t you like Bernie Sanders? I’d say 98 problems in the Senate(you can keep the whole House) as Feingold and Bernie Sanders are keepers.

  25. Terry commented on Sep 3

    Here’s another absolute truth about the Bush Administration economy:

    “The Bush economy is the worst of the twenty-first century. Bar none!”

    I expect that truth to continue throughout the century. Too bad I won’t be here then to smile at my foresight.

  26. steve commented on Sep 3

    The REAL Bush economic record

    1. The USA needs $2B a day from China et al or could not keep its economy stable or spare the dollar from collapse.

    2. The USA already has close to $10 Trillion in national debt

    3. The USA has a trade deficit of $800B/yr

    4. The USA is the prime engine for derivatives ‘ticking bomb’ that grew into a massive bubble, from about $100 trillion in 2000 to $516 trillion by 2007 that is going off in blowback stages

    5. The USA already has way too many Americans overwhelmed by personal debt racking up a household debt-to-income ratio of 1.42 ( for total of $13.8 trillion in debt including mortgages ) that already matches the country’s $14 trillion G.D.P.

    6. The USA has Bushie boy racking up $32 Trillion dollars in total liabilities and unfunded commitments for future payments since 2000.

    In a speech a few months ago at the National Press Club, former GAO Comptroller General David Walker said:

    “If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and some people would be talking about whether the company’s management directors needed a major shake-up”.

    “The federal government’s total liabilities,” Walker explained, “translates into a de facto mortgage of about $455,000 for every American household and there’s no house to back that mortgage. In other words, our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases.”

    7. Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips
    http://www.amazon.com/o/ASIN/067…9070/ groksoup04

    Phillips describes the consequences of our misguided economic policies, our mounting debt, our collapsing housing market, our threatened oil, and the end of American domination of world markets.

    Yes that’s the REAL Bush economic record !

  27. Greg0658 commented on Sep 3

    Troy seems to have done a good job putting forth figures. Producing reports for America isn’t in my job description, but I keep my eyes open and ears listen’g.

    I see jails overcrowding; dumpy vehicles on the road; red line debt levels in government books; failing roads / bridges / electrical / water systems; near abandoned properties left and right; pensions going broke.

    The USA population being healthy? I see many overweight; addictions to a slew of drugs; 50 somethings increasing in numbers on the obituary page; kids not try’g.

  28. Brendan commented on Sep 3

    Wow! the true colors of the self-proclaimed moderates gloves come off very quicly whith anti-bush liberal retoric just as soon as anything posistive is atributed to Bush.

    While there are some ireleveant facts and missstatements in this WSJ article. There are also many whole truth and worthwile pieces of information.

    This is not the only article that has been posted on this site that contains numerous half-truths, and these types of statistally manipulated arguements.

    The anlysis of the economy by political party article posted on this blog a month back analysed GDP without considering inflation.

    This was a blatent attempt to make Democratic Presidents economic records appear better than they really were. Especially that of Jimmy Carter’s

  29. Jeff M. commented on Sep 3

    @Brendan: The truth is not “Democratic” or “Republican”, “right wing” or “left wing”, or even “moderate”. It’s just the truth. You should try it sometimes.

    Until more people try it, this country will continue its rapid descent.

  30. Bodz commented on Sep 3

    We have done so well under Bush that when we travel to France or Germany or Italy, we can’t afford anything because the dollar has lost 1/2 its value. Meanwhile the Europeans are coming here and acting like kids in a candy store. Everything is so cheap. Now they are rich relative to us.

  31. Mike in NOLa commented on Sep 3

    I’m sure something similar could have been written about the French government which put John Law’s Louisiana Scheme into effect. Easy to pump up numbers when you just keep printing money.

  32. rickrude commented on Sep 3

    bush would have a good record if him and bernanke somehow managed to unravel the anti-USD commodity investors and caused a stampede out of commodities and into the USD.

  33. Diogenes commented on Sep 3

    The Canadian dollar (loonie) has been worth more than the US dollar for much of this year. So when in the past did the loonie exceed parity with the dollar?

    Besides 2007-2008, the only other times the loonie exceeded parity were 1957-1960 (Eisenhower) and 1971-74 (Nixon). Both of these periods were marked by deep recessions in the US. In the late 50’s there was a deficit, coupled with rising consumer prices and unemployment. In 1971-74, the country experienced stagflation, a non-growing economy coupled with rapid price increases.

    Yep, just like the Journal says, Republicans are good for the economy…

  34. jj commented on Sep 3

    Bush inherited a shit storm (post 9/11). The late 1990’s was the “Era of Lies”…accounting scandals, wall street research, internet hype, and a liar of a commander in chief.

    Bush was an idiot in his execution of (Iraq) a situation the entire world recognized (how many UN resolutions?) but to blame him for the economic downturn is unfair yet a media “truth”.

  35. roscoe ii commented on Sep 3

    The Emperor had no clothes pales by comparison to what U.S. Government statics is presenting.

    Hopefully, the U.S. electoral will see this fraud. Unfortunately, the Democrats policies are borderline worse.

  36. km4 commented on Sep 3

    Bushbots are pathetic apologists with IQs below 100

  37. Michael Donnelly commented on Sep 3

    A brilliant post by Troy means I don’t have to do any heavy lifting. Thanks Troy

  38. Bolddan commented on Sep 3

    Well, get used to what we have, because we have more of the same coming. One thing the Republicans are really good at is never under-estimating the ignorance and shallow mindedness of the general electorate and knowing how to play to it. They’ve mastered the process. The Democrats, well, they have a lot of catching up to do.

    Good luck to us all.

  39. Bruce commented on Sep 3

    Well, if you don’t think we need a balanced budget amendment to the constitution, then your republican or democratic rhetoric is just more pounding on straw men…if the government is not required to balance their books, they won’t…and congress and the president made this mess, as did all other administrations since Nixon….

    Just pass the damn amendment…

    Bruce in Tennessee

  40. Stuart commented on Sep 3

    I couldn’t finish reading it. Made me ill. It’s typical of those who support GW though. They WILL see what they WANT to see and they WILL shout out what they WANT to shout out irrespective of trivial details aka facts that get in their way. This is why they have to go, NOW!

    Destruction in the confidence of political and financial leadership is the legacy for the last 8 years. It has been IMO exposed as a true managerial oligarchy ( ye ole boys club) where membership truly does have its privileges. Case in point, earlier I posted some blurb about Lehman rumors as an example where there are no cops anymore policing the markets. Just when it’s dying, again, lo and behold, sudden rumors of a white knight appear. Latest one today was Mitsubishi…. well….. Trading in Lehman should be halted until this BS is investigated and forced to cease. This is a prime example of the legacy for the last 8 years of what our markets have become.

    Wednesday September 3, 6:33 pm ET
    <

  41. patfla commented on Sep 3

    I needed to refresh my memory. OK here we go:

    http://en.wikipedia.org/wiki/Economic_Growth_and_Tax_Relief_Reconciliation_Act_of_2001

    The inheritance tax (aka estate tax). Very large jumps in the exclusions and then its total repeal in 2010 (don’t know where that stands, but should definitely look it up).

    I’d say if anything De Toqueville’s _Democracy In America_ exceeded even the many praises I’d read of it over the years.

    One of the many things that committed itself to memory (paraphrasing) “nothing so contributes to the state of class differences in a society as its laws regarding inheritance taxes”.

    I’ve been meaning to keep an eye on all the items(both pro and con) that were supposed to happen at various time intervals after the tax act of 2001, but haven’t done as good a job as I’d like.

    A web-based scorecard, for all the world to see (and with the names of perpetrators attached), would be really handy.

  42. Jeff M. commented on Sep 3

    @Bruce in Tennessee: Agree with you 1,000%. That issue is neither GOP or Dem although I do believe the Clinton admin did a far better job of getting out of the deficit than Bush. Curious that he was pressured to do this, while it was OK for Bush to recklessly cut taxes (borrow) while spending more than any other president in history.

    On another note, this just in: Rumor has it I’m going to acquire Lehman this week. There, just provided a little boost to the stock for another week.

  43. VJ commented on Sep 3

    How many analytical errors, half truths, misstatements, and out of context data points can you find in this commentary?

    That would take WAY too long. It would be easier and much quicker to list what he had correct:

    NOTHING.

    ~~~

    Nationally:

    * Bankruptcies are at the HIGHEST level in history

    * Home foreclosures are at the HIGHEST level in history

    * We have the LARGEST Inventory of unsold vacant homes in history

    * Federal budget deficits are at the HIGHEST level in history

    * The savings rate went NEGATIVE for the first time since the Great Depression

    * The total amount of money Americans have to spend after taxes relative to overall output of goods and services (U.S. Disposable Personal Income as a percentage of GDP) has hit the LOWEST level in 25 years

    * Poverty has INCREASED every year this administration has been in power (after DECLINING every year of the previous eight years)

    * American worker’s wages have DECLINED every year this administration has been in power

    * Joblessness is UP dramatically. We are down MILLIONS of jobs since the 1st QTR of 2001 (there are actually fewer workers in the national workforce now, as a percentage, than there were in 2000). The Augmented Unemployment Rate is 10%.

    * The number of uninsured has INCREASED every year this administration has been in power

    * The S&P 500, in inflation-adjusted dollars, is DOWN by 25% since 2000.
    .

  44. VJ commented on Sep 3

    Bruce,

    Well, if you don’t think we need a balanced budget amendment to the constitution, then your republican or democratic rhetoric is just more pounding on straw men…if the government is not required to balance their books, they won’t..

    The Clinton administration did it three years in a row, net six years in a row.

    No constitutional amendment required.
    .

  45. Ross commented on Sep 3

    I would argue that the President (the position in general) has very little direct effect on the economy outside of taxes and tariffs. And frankly I think almost all politicians have gone protectionist for the sake of not ticking over voters (I’m not saying that I agree with that policy). I would argue that the Paulsons and Bernankes of the world have a much greater impact on the economy than Bush does (or did). Granted Bush appointed them and yes he covers up for them so from that sense you can say he has had an effect on the economy. Nothing chaps my rear more than the Dems claiming that Clinton was the reason for the 90’s tech boom (If that’s true they fail to mention the bubble part. Of course the same could be said for Bush and real estate.) or Candidate A saying that the economy is bad because of the current president. The fact is whatever party isn’t in office is going to tell the public that the world is coming to an end every four years. It’s fear mongering at it’s finest and we fall for it every time. We elect politicians on sound bites and not stances on issues. It’s quite pathetic. I will say this, you will get your recession if Obama is elected. There is no doubt about that at all. As much as he is talking about raising taxes. Kiss the economy goodbye. Skyrocketing food and gas prices and you’re gonna take away people’s money. That’s borderline retarded. And $250k annual income is anything but rich these days. And I’m a Buffett fan but the more he talks about economics (I’m afraid he only does because he gets interviewed so much, he throws out numerous disclaimers that he’s no economist.) and tax policy the more I want him to go back to Omaha. It’s real frickin’ easy to argue raising taxes when you’re the richest person in the world. Maybe he’s trying to prevent anyone from catching him :-). But Warren here’s an idea let’s cut spending. Let’s cut all these entitlement programs that don’t work. Let’s outlaw pork spending. Sorry for the rant. I bet you wonder where I stand politically.

  46. Corndog commented on Sep 3

    Having watched these people in action today, it seems to me that they’ve turned this into a referendum on whether or not we Americans should allow our presidential candidates to make love to the Alaska pipeline.

  47. Jeff M. commented on Sep 3

    @Ross: I have news for you – we’re ALREADY in a recession. Please wake the fuck up and cut it out with the GOP talking points.

    Are you already warming up your finger pointing in case O wins? Please WAKE THE FUCK up now.

  48. Troy commented on Sep 3

    The Clinton administration did it three years in a row, net six years in a row.

    To be fair, the Congressional Republicans share the credit here, too.

  49. patfla commented on Sep 3

    We should keep in mind though the adage to he effect of “people get the leaders they deserve”.

    Did the Russians deserve Stalin (even though he was a Georgian). The trivial, uninteresting answer is: no. The much more interesting answer – the one that provides far more food for thought – is: yes.

  50. Troy commented on Sep 3

    Ross, the problem with “oh noes tax raise gunna tank teh economiez” is that we have the counter-example of the first Bush & Clinton tax raises of the early 90s.

    The thing about the $250K limit is that it’s damn near impossible to receive pure labor wages at that level — that’s $120/hr.

    People making that much are banking rents of some sort — either copyright-protected, patent-protected, or income from speculative enterprises like REITs.

    As a neo-Georgist, I say we should tax labor and capital equally low, after socking it to the rentiers among us.

  51. Troy commented on Sep 3

    VJ, you missed one: total home equity dipped below 50% this year.

    Here’s a FOXNEWS link so even Ross can believe it.

  52. VJ commented on Sep 3

    Ross,

    I would argue that the President (the position in general) has very little direct effect on the economy outside of taxes and tariffs.

    Too bad there is no evidence to substantiate such an argument.

    Nothing chaps my rear more than the Dems claiming that Clinton was the reason for the 90’s tech boom (If that’s true they fail to mention the bubble part.

    I don’t know who is making such an argument, as the national economy was booming and the stock market was skyrocketing BEFORE we even had wide-spread dial-up internet.

    I will say this, you will get your recession if Obama is elected.

    We already have one.

    There is no doubt about that at all. As much as he is talking about raising taxes.

    Obama is not my candidate, but raising taxes on the Rich & Corporate has never resulted in a recession. So far, quite the opposite.

    Kiss the economy goodbye.

    We already have the worst economy since the Great Depression.

    But Warren here’s an idea let’s cut spending.

    We are running trillion dollar deficits. Let’s see your list of spending cuts.

    It’s real frickin’ easy to argue raising taxes when you’re the richest person in the world.

    Buffet knows that the current massive federal deficits and debt were as a result of massive tax cuts for the Rich & Corporate which caused federal income tax revenues to plummet. The only way to reverse it is to reverse the tax cuts.

    Let’s cut all these entitlement programs…

    Most are running surpluses.

    Let’s outlaw pork spending.

    Less than $50 billion annually. Another $950 billion to go.
    .

  53. VJ commented on Sep 3

    Troy.

    To be fair, the Congressional Republicans share the credit here, too.

    For what ?

    The federal budget was in net surplus in the Summer of 1994. Newtie and the blowhards didn’t take office until January of 1995, and didn’t get any major budget legislation signed into law until February of 1996, after they shut the federal government down twice.
    .

  54. SR commented on Sep 3

    Re: Paul

    “Never overestimate the intelligence of the voting public.”
    ______________

    “Nobody ever went broke underestimating the taste of the American public.” -H. L. Mencken

    While reading Paulin’s speech text, labeling the Dems as the Washington Elite, I instantly drew a comparison as to what Reagan pulled off 28 years ago.

    “History doesn’t repeat itself, but it does rhyme.” -Mark Twain-

    The DNC better wake up and realize that they have a female Reagan savant to contend with. Paulin will really resonate with the God, guns, and gays (lest I forget Nascar Nation & Soccer Safety Moms) sector. The masses will draw to her like a moth to the flame.

    Your mileage may vary…….

  55. Jasper commented on Sep 3

    The healthcare comments are particularly amusing. If my understanding is correct, that the next most expensive developed country spends around 10% of GDP, we could keep the same government burden we have, cover 100% of us, save the 55% private contribution, and improve outcomes.

    Or am I missing something, and he didn’t say as a positive that we spend twice the amount of the rest of the world, leave 15% with no coverage and one serious illness away from bankruptcy, and barely keep pace with other countries on outcomes.

    Further, that increase in insured was entirely due to additions to government healthcare rolls. Employer provided insurance is of course on a steady downward trend.

  56. Mark E Hoffer commented on Sep 3

    VJ,

    remember, it’s All Left/Right.

    Sad thing, you’re smart enough to know better(?), as it is, feel free to “Tool On”

  57. VJ commented on Sep 4

    ????

    I’m just reporting the facts.

    Apparently, reality has a well-known Liberal bias.
    .

  58. Bigboy commented on Sep 4

    @VJ

    “Too bad there is no evidence to substantiate such an argument.”

    So, can I ask what your evidence is to contradict Ross?

    Clinton benefitted from what Bush I put in place. Remember, we were actually out of the Rececession BEFORE Clinton was in office. Duh.

  59. Mark E Hoffer commented on Sep 4

    “It’s real frickin’ easy to argue raising taxes when you’re the richest person in the world.”

    Buffet knows that the current massive federal deficits and debt were as a result of massive tax cuts for the Rich & Corporate which caused federal income tax revenues to plummet. The only way to reverse it is to reverse the tax cuts.

    “Let’s cut all these entitlement programs…”

    Most are running surpluses.

    “Let’s outlaw pork spending.”

    Less than $50 billion annually. Another $950 billion to go.

    VJ, if you think those are ‘facts’, feel free..

  60. alnval commented on Sep 4

    Barry: It’s clearly labeled “Opinion.” If it had been on the news side I would have been worried. At least we know that the editorial page of the WSJ hasn’t changed its spots Murdoch or no.

  61. Francois commented on Sep 4

    “Health services. The U.S. spends easily the highest amount per capita ($6,657 in 2005) on health, more than double that in Britain. But because of private funding (55% of the total) the burden on the U.S. taxpayer (9.1% of GDP) is kept to similar levels as France and Germany.”

    ROFLMAO!!

    Private funding huh?

    Pray tell, you unbelievable asshat, WHO provides the “private funding”?

    We, the working stiffs. That’s who.The same who, oh surprise!, happen to pay TAXES. It comes from the same pocket. That you chose to skip this inconvenient truth show how dishonest and immoral you are.

    Come on Keith: Tell me how much the wingnuts pay you to write this crap?

    Let me ask you what the special prosecutor asked a Nixon aide during Watergate: “Do you have any conscience”?

  62. Jeff M. commented on Sep 4

    Blind idealogy regardless of the facts is destroying this country.

  63. Eric commented on Sep 4

    Murdoch has clearly taken the already psychotic WSJ editorial page into a new realm of propaganda bullsh*t. We are not only governed by idiots; we are preached to by them from every corner of the media. Imagine waking up to this in the WSJ, then turning on the crew at CNBC, then listening to Kudlow, and then Cramer. Yikes!!!! And yet there are MILLIONS of people in this country who truly worship them.

  64. Robert commented on Sep 4

    We should compare the economy under the Republican Congress of the 90s with the economy under this do nothing, lowest rated ever, liberal Congress we have now.

  65. Francois commented on Sep 4

    “Paulin will really resonate with the God, guns, and gays (lest I forget Nascar Nation & Soccer Safety Moms) sector. The masses will draw to her like a moth to the flame.”

    Hmmm…I doubt it very much. A lot of these folks are hurting like hell in the pocket book.

    Money talks especially loudly when you got less of it over a continued period of time.

    I’m afraid the Repugnicrats will find the ranks of these people shrinking fast.

    GOP can pull all the tricks they want, most people are starting to see them for what they are…serial lies and sin doctoring.

    Another hopeful sign of the times: non rightwing bloggers (hard to believe but not all of them are “liberals”) are hitting back very hard at the media for every data piece the journalists let pass without a challenge. And THAT is starting to seriously impair the GOP propaganda machine.

    It also annoys the heck out the journalists but they got exactly what they deserve. They refused to do a decent job during this nefarious administration and it’s payback time…bitches!

  66. Francois commented on Sep 4

    “Mr. Marsden, a fellow of the Centre for Policy Studies, was formerly an adviser at the World Bank and a senior economist in the International”

    Man! is it any wonder these institutions are so screwed up?

    With employees like that, who needs natural disasters?

    Ooops! Just occurred to me that Mr. Marsden IS a natural disaster.

  67. pkut commented on Sep 4

    Why do people stupidly compare the performance of the economy from the moment a president takes an oath to the day they leave? If you believe they have an effect shouldn’t you start at least a yr into their term and carry it out for at least a year after they’re gone? certainly bush policies had nothing to do with the recession which started 60 days after he took an oath, or the plunge in real household income of 10% within the first yr he was in office. It’s almost as laughable as claiming the world economy won’t impact the US, and thus comparisons of the US to the EU or the rest of the world are meaningless. The fact of the matter is that obama would pursue a policy of wealth redistribution which has previously been the policy in Europe. The result of which was that Europe has grown at roughly half the rate as the US over the last 40yrs with 50%. BTW, what’s the EU’s gdp growth been lately? What’s inflation running at in the EU zone?

    Anyone who cites ave life span in an attempt to compare health care models obviously knows nothing about the issue. With 1/3 of Americans obese (a rate double that of Europe), higher rates of smoking, and much higher rates of homicides and auto deaths it’s a miracle were even equal. Another obvious mischaracterization is infant mortality. Europe excludes deaths within the first 24hrs from their statistics, where as the US includes those deaths. The majority of deaths are within 24hrs.

  68. ScottB commented on Sep 4

    I hate to pick on Troy who put together a fine list, but…

    “This is because we don’t count the unemployed when their benefits run out” is inaccurate. Less than forty percent of the unemployed receive benefits. Compare the continued claims numbers (3.4 million end of August) with the BLS estimate of the unemployed (8.784 million in July).

  69. VJ commented on Sep 4

    Bigboy,

    So, can I ask what your evidence is to contradict Ross?

    Eh, the last eight years verses the previous eight years.

    Clinton benefitted from what Bush I put in place.

    Like negative job growth in the private-sector over his term ?

    Like the slowest GDP for a presidential term in 50 years ?

    Like the largest federal deficits in history ?

    Real beneficial.
    .

  70. VJ commented on Sep 4

    Mark,

    VJ, if you think those are ‘facts’, feel free..

    It is a FACT that the Treasury Dept reported that as a result of the four rounds of tax cuts for the Rich & Corporate federal income tax revenues fell to 1959 levels, which produced the largest federal budget deficits in history.

    It is a FACT that Social Security and Medicare are running surpluses.

    It is a FACT that all recent congressional earmarks totaled less than $50 billion.

    NEXT ?
    .

  71. Anonymous commented on Sep 4

    Even if we overlook the clear and omnipresent fear in both the general public (consumer confidence, anyone?) and the government (Bear Stearns bailout, anyone?), and we accepted that the economic record of the last eight years is fantastic and glowing, couldn’t that be attributed mostly to the appetite of other countries to finance a consumption binge in the US? Yes, yes, as certain economists love to point out, the deficit/debt compared to GDP is not totally out of whack with previous generations in the US. But I’m not really concerned with HOW MUCH money was borrowed by the government, but rather WHO lent it to us. We went from an overall public/private creditor nation to a debtor nation. That is a huge stimulus to an economy and CANNOT be repeated without a severe contraction in which we reverse back to being a creditor nation. How difficult is this to understand? It’s called eating your cake. You don’t have it anymore. Even if the numbers today don’t show the record to be totally abysmal, the coming catastrophe will surely prove that the last eight years were the worst in terms of economic stewardship of this country.

  72. jeff commented on Sep 4

    There are lots of pretty smart people who post here. Interesting how many readily fall into the trap of viewing the economy based on whether “your guy’s” in office or not — little Larry Kudlows or Paul Krugmans all! When the political filter is in place, very little empiricism enters the conversation. It is all spitting at each other….

    You can see the numerous problems comparing economic performance strictly by who’s in the executive over a discrete time period (such as the Blinder article currently in NYT about how Dems do better than Repubs)

    Problems that I see with this extremely crude comparison (since the end of World War II let’s say)..

    1. not controlling at all for who’s in the house and senate at the time — yes, the President signs or vetoes,but who else sends fiscal policy and to the Prez?
    2. The serious lag time between policy-making and effects — you can make the case that is at least a year, probably a lot more for most significant tax or spending changes.
    3. No allowance for where in the cycle a president “takes over” on Jan. 20 in the first place
    4. Changing bases of gov’t statiscal measurement of economic indicators over the years — hasn’t everybody and their mother’s uncle been sharply critical re: this?
    5. Discrete secular economic or global events that impact the economy — oil embargo, the tech boom, 9/11, etc.
    6. Pretty small sample size itself — even with 10 so-called recoveries since the end of WWII, the timeframe and criteria for which has themselves changed over the years, we have very few observations — and those observations have very shaky bases of control for comparison
    7. We all know that the Fed, though certainly not all-powerful, has far more push and pull on the economic joystick than does the President.
    8. The article that Barry points to in the NYT, more than anything points to shallower and shallower recoveries since the end World War II —

    Might this just be a couple things that have nothing to do with who is the President? i.e. the world was laid in ruins at the end of the war and the US was the only game in town, basically guaranteeing economic hegemony for a solid couple decades — the world has gotten steadily more competitive since. Might also — in more recent cycles especially — the shallower recoveries be more and more about the declining dollar-for-dollar positive GDP impact of cyclical Fed easing and marginal new debt creation…..?

    I mean seriously guys — I am a libertarian, so am about as anti-Bush as they come, but does anybody here really believe that Bush is at the core of the housing and debt bust we have on our doorstep (and the house price decline is certainly at the core the credit collapse) now? We all know the causes (many of which go back years and years) lie with this and previous administrations and congresses, The Fed, Fannie, Freddie, ratings agencies, securitization trends that go back at least 20 years, automated loan approvals, overconfidence in statistical models, capital gains policy, and not least the speculative heartbeat of the average American — just to name a few!

  73. Kimble commented on Sep 4

    Well said, Jeff.

    I would ask a provocative question though. Could it be that the relationship between economic performance and Presidential selection is the inverse of what many here are assuming? As in, America votes for Democrats when things look as if they are going well, and vote for Republicans when it looks like the shti is going to hit the fan?

  74. Mark E Hoffer commented on Sep 4

    VJ,

    if you want to continue with this type of myopia: “It is a FACT that Social Security and Medicare are running surpluses.”

    and conflating ‘earmarks’: “It is a FACT that all recent congressional earmarks totaled less than $50 billion.” with pork-barreling (see: NASA, DoD for starters)

    you’re being disingenuous, at best..

  75. Ed commented on Sep 4

    People people you don’t want to get so excited over an OpEd piece. Everybody knows these are just somebody spouting off on their favourite position.
    Having lived with a Murdoch dominated media in the UK for years I would recommend spending more time watching out for how the news reporting gets slanted, how two apparently independent media sources, satellite and print confirm each others stories. WSJ confirms Fox News reporting, the bias seems obvious but it appears to increase the credibility of the “facts” reported!

  76. X Man commented on Sep 4

    Hah, this guy’s a Brit who apparently lives in Geneva. If he likes the US economy so much he should move over here and try getting job.
    http://www.cps.org.uk/whoweare/honoraryfellows/?
    Remember 2004 when the Guardian had readers send letters to people in Ohio begging them not to vote for Bush? If Marsden had written in to defend a Democrat’s economic record the right wing would laugh him off the island.

  77. txchick57 commented on Sep 4

    Looks like my short sell of the “Palin Withdrawn” contract was a winner. Cover at 0.

  78. jj commented on Sep 4

    I love the political season

    great comments above

  79. freejack commented on Sep 4

    Mark E Hoffer,

    NASA is pork ?

    Really?

    Take the log outta your own eye first.

  80. Bruce commented on Sep 4

    VJ..

    No they didn’t. They “accounted” that they did…as with all the last administrations, budget busters are simply no longer on the books…

    You know that.

    Bruce in Tennessee

  81. Mark E Hoffer commented on Sep 4

    “The path of least resistance and least trouble is a mental rut already made. It requires troublesome work to undertake the alternation of old beliefs. Self-conceit often regards it as a sign of weakness to admit that a belief to which we have once committed ourselves is wrong. We get so identified with an idea that it is literally a “pet” notion and we rise to its defense and stop our eyes and ears to anything different.” — John Dewey

  82. Ricardo commented on Sep 4

    They are really putting effort to destroy the WSJ aren’t they.
    We need an alternative and soon!

  83. VJ commented on Sep 4

    Mark,

    you’re being disingenuous, at best..

    Too bad you cannot substantiate your assertions.

    The Treasury Department says your wrong:

    Receipts in 2004 … As a share of GDP, they accounted for the smallest proportion since 1959

    LINK

    HEH.
    .

  84. VJ commented on Sep 4

    Bruce,

    No they didn’t. They ‘accounted’ that they did…as with all the last administrations, budget busters are simply no longer on the books… You know that.

    No, I don’t, and I’m afraid that the Treasury Department, the Congressional Budget Office, and the Blue-Chip private sector analysts disagree with you.
    .

  85. Mark commented on Sep 4

    @freejack: You’re kidding, right? NASA is MAJOR pork. Ask any NASA employee off the record. $500B to go to Mars??? The only purpose of that is to try and stoke inflation, which the government needs to diminish the national debt over time.

    Wake up.

  86. JWC commented on Sep 4

    This retired grandma wants to chime in here for a second. I went to the grocery store yesterday, and struggled to figure out what kind of meat to buy. I took my son’s family out to dinner for his birthday and the bill was the largest I have ever paid. I may have to rethink that tradition next year. Hubby and I have done what you are supposed to do, work hard, save, play by the rules. I think (?) we will be okay, because we have managed our money well. I worry about my grandchildren and the future debt we have straddled them with. I no longer believe most of what I hear on CNBC, I don’t read anything from the WSJ, and I refuse to watch any program that has even a minute of Larry Kudlow on it.

  87. jmay commented on Sep 4

    The most important thing Clinton did was slowing the growth of the Defense budget. Not reducing it — just slowing the growth. That in itself was enough to balance the federal budget.

    The Republican-Military-Industrialites bitched and complained — I remember a classmate who was a Captain in the army talk about how Clinton was destroying the military.

    Here were are 8 years later and Bush is bankrupting the country with these senseless wars and the incredibly bloated ridiculous Department of Homeland Security.

    Defense is the most wasteful part of the national budget by far. 21 Intelligence agencies that don’t talk to each other? $100 to do one load of laundry in Iraq?

    That’s the single biggest problem. Ike was right — that’s why his granddaughter is now publicly supporting Obama.

  88. barbicho commented on Sep 4

    Keith Marsden is a right-wing economist, usually described in biographies an “economics consultant to several UN agencies”. He was previously an operations adviser at the World Bank and worked as an economist for the International Labor Organisation. He is based in Geneva.

    At the World Bank, he was author of a widely-quoted paper on the links between taxes and economic growth which argued against taxation.

    Since working for the World Bank, nearly all of his output has been through the Center for Policy Studies. He is highly critical of the British government’s economic record.

    Marsden is a member of the advisory board of the Tax Payers Alliance, and the international advisory board of the European Foundation (which aims are:
    * To further prosperity and democracy in Europe
    * To renegotiate the treaties of Maastricht, Amsterdam and Nice and prevent the ratification of the European Constitution
    * To reform and scale down the acquis communautaire
    * To ensure that future member states get a fair deal from EC/EU membership
    * To halt the continuing arrogation of power by the EC/EU
    * To prevent the UK from adopting the euro
    * To contribute as actively as possible to an informed public debate about the future of Europe
    * To liaise with like-minded organisations all over the world
    * To liaise with organisations affected by EC/EU action and policy
    ).

  89. John commented on Sep 4

    I long ago gave up being surprised at the very strange oped pieces they run in the WSJ. There are at least two, arguably three, others today alone. Given the tectonic shift I’m sensing politically I’m wondering how long the fruitcakes are going to be running things there. I see Murdoch forced Fox News to smoke the peace pipe with Obama who is going to be doing an hour long interview with O’Reilly tonight, because Rupe can tell which way the wind is blowing and he has big fish to fry in Washington. Can it be very long before he gives the Heave Ho to Gigot?

  90. John commented on Sep 4

    For those that like this kind of stuff here’s a link to piece by economic arch conservative John Tamny who lays the market’s weakness at the foot of McCain for choosing Palin since apparently this makes it a near certainty Obama will win in November.

    http://www.realclearmarkets.com/articles/2008/09/markets_boo_mccains_vp_choice.html

    Of course another explanation for those like Kudlow and Co who see politics in all market movements, the explanation could be horror at the remotest chance that McCain and the mayor of Wasilla will be directing the destiny of this great nation. Choose according to your inclination.

    Even if Tamny’s explanations for the markets ills are baloney he’s probably not far off the mark in thinking this pick improved Obama’s chances somewhat.

  91. Linda commented on Sep 5

    I mean seriously guys — I am a libertarian, so am about as anti-Bush as they come, but does anybody here really believe that Bush is at the core of the housing and debt bust we have on our doorstep (and the house price decline is certainly at the core the credit collapse) now?
    Posted by: jeff | Sep 4, 2008 3:20:54 AM

    A President affects the nation and the economy in many ways. That’s what’s behind calls for that quaint old fashioned thing we call “Leadership.” We also tend to blame “the President” as a handy stand-in for his particular constituency’s package of ideas, philosophy, and programs as well as for the actions or inactions of the Executive branch Departments.

    In GW’s case, the referenced housing and debt bust are certainly related to all of the above. In an atmosphere where Gordon Gecko would be seen as a piker, excess isn’t surprising. GW himself said, “They got drunk.” You bet they did. They were operating in an atmosphere where oversight was lacking, and those who were supposed to be doing it had reduced budgets and clear signals that a somewhat blind eye was called for. The most favored child tends not to respect limits. And there’s no doubt about who the most favored child has been for the past 8 years. In an atmosphere where the incentives favor greed and “no one” is exercising oversight, the outcome is somewhat predictable. hmmm… puts me in mind of a frat party.

    The house price decline was inevitable (and IMO the hope was that it wouldn’t happen till after the election). Despite his ability to see exuberance, Greenspan was more than happy to tout ARMs and urge people to buy houses. Do we wonder why?

    The credit collapse (and the froth at the top of the housing boom) was due to easy credit, and the insane mess of derivatives created to make even more money on top of big money. The credit collapse began in earnest when someone noticed that “The Emperor’s New Securities” were nothing but hot air. To say that the house price decline started it is like blaming the wind when a house of cards collapses.

    I’m sure GW didn’t plan all this. He probably didn’t even see it coming, but almost certainly someone in his administration did, and things could have been done or not done differently – had GW cared to address it. The housing bubble and the credit collapse didn’t have to happen or at the least didn’t have to be as bad as they will be. The man in charge takes the blame for what happens on his watch. Whether he started it, or planned it, or not, he presided over an atmosphere that nourished it, and he was in a position to address it before it grew to what promises to be historic proportions.

Read this next.

Posted Under