Where is the US economy headed?

I thought it was worth noting because good economies are not always about breaking all records, its about basic stability and continuity, and I think that is what we have. Too much growth can be detrimental, and there was no way to duplicate the 90s, which was in part fueled by the internet stock bubble, unless you want a huge crash at the end. We were very fortunate that Bush's tax policies averted that.

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okie wrote:

The point is, Thomas, that the Democrats cannot run against the economy because it isn't too bad, and the stock market is looking fairly good now.

If that was your point, kelticwizard's graph disproves it as well. As you can see, the Dow hit a record in 1992. Nevertheless, the Democrats did, in your words, "run against the economy" in 1992 -- and they won.

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Thomas wrote:

okie wrote:
Bush's terrible economy is breaking records on Wall Street.

http://www.foxnews.com/story/0,2933,217766,00.html

Just for context: How long into the presidencies of Clinton, Bush I, and Reagan did it take until the Dow first broke its previous record? Without having looked at the data, I'd bet it took much less than six years for each of them.

I think Thomas' comment here is just as misleading as oakie's earlier claim.

In the first place Presidents and Legislatures don't create economic activity. They certainly have the ability to harm or misdirect it, but they don't create it. Secondly there is a considerable time lag between the application of government economic policy and the effects it yields on economic performance. Politicians generally assume the lag is zero when the news is good and they are in office. Oddly this zero lag view seems to have substantial public currency as well.

The U.S. economy was already in a recession when Bush took office. Current indicators were still good, but the underlying trends - and the forces behind them - were inexorably at work. Given the magnitude of the bursting dot comm bubble, we had a reasonably soft landing, due in part to the Bush tax cuts. We would also had been better off had he the wisdom, political courage and will to restrain government spending.

A broad economic expansion, begun during the Reagan years was still underway when Clinton began his first term. He was wise enough to do nothing to harm it and the good news continued. One can make a fairly good case that the division of power between a Republican Congress and a Democrat President in those years yielded a paralysis of major government initiatives that prevented the politicians (of both parties) from screwing up a good thing.

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I agree with all you say, except my earlier statements have not been misleading. All I said was "Bush's terrible economy was breaking records on Wall Street," which is true. It was a sarcastic statement, and I did not say breaking records indicated everything was booming. As you pointed out, which says the same thing I said earlier, the booming stock market during the 90's could no way be sustained in any real world, and some of that was the phony dot.com boom, so we've had a period of correction for growth to catch up with inflated stock prices. The truth is the economy is steady and pretty good, not great, but it is not nearly as bad as the Democrats would love people to believe.

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http://img.photobucket.com/albums/v645/kelticwizard100/DowJones3Pres.gif

okie wrote:

Yeah, like I haven't been around for a while watching this stuff.

Too bad you didn't pay attention while you were watching. For if you paid attention, you would see that the stock market's performance under Bush is terrible compared to his two predecessors. When previous presidents see relatively steady stock market growth, when the stock market under previous presidents is largely a series of new "records", then to keep the stock market flat or worse for six years is a disgrace.

And don't give me any 9/11 baloney. As the chart indicates, the fallout from 9/11 was all over in a couple of months-the stock market returned to what it was.

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okie wrote:

My parents lived through the depression, keltic, so if you want to listen to how virtually everybody lives now compared to then, you need to listen to somebody that knows what they are talking about like them and remedy your own ignorance.

So THAT'S your defense of Bush's economy? It was better under Bush than it was during the Great Depression????

I know you Republicans are experts at lowering the bar for Bush, so that if he achieves mediocrity in any area it is supposed to be cause for joyous celebration and hosannas. But you have really outdone yourselves this time.

Don't complain about Bush-things are better under him than they were during the Great Depression. That's a riot. Razz

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kelticwizard wrote:

okie wrote:
My parents lived through the depression, keltic, so if you want to listen to how virtually everybody lives now compared to then, you need to listen to somebody that knows what they are talking about like them and remedy your own ignorance.

So THAT'S your defense of Bush's economy? It was better under Bush than it was during the Great Depression????

I know you Republicans are experts at lowering the bar for Bush, so that if he achieves mediocrity in any area it is supposed to be cause for joyous celebration and hosannas. But you have really outdone yourselves this time.

Don't complain about Bush-things are better under him than they were during the Great Depression. That's a riot.

Keltic, if you would apply just the slightest historical analysis to this subject, then Bush is not performing badly at all. The stock market has always performed in fits and starts, in other words, periods of growth followed by relatively flat performance, and possibly even drops if you look at it in constant dollars. This is well illustrated by the graphs in the following links.

http://www.signaltrend.com/DJIA.html

http://bigpicture.typepad.com/comments/2005/12/100_year_bull_b.html

The following site shows growth rates, and the second chart is the one to look at because the first one does not account for inflation so it gives a distorted picture.

http://www.lowrisk.com/djia100year.htm

This last chart I will show below because it really shows the best picture in my opinion, in inflation adjusted dollars. The commentary accompanying this graph says: "Adjusting for inflation puts the Bull and Bear periods into even sharper relief. It also shows how totally bubblicious the late 1990s were, and why many strategists and technicians started pulling in their horns in the mid-1990s."

I interpret the "bubblicious" late 90s as reflecting the phony dot com bubble. In other words, there was no possible way this could sustain itself no matter who was president, and in fact, it was peaked out and headed down by the time Clinton left office. And this is consistent with historical cycles of the market.

The other observation one should note in the following graph is the earnings now as compared to the 90's, on this graph they look as good or better. The truth is this economy is not bad and the stock market is performing very good when measured against historical cycles and trends. With the bubble of the 90's, we are fortunate to sustain as much value of the market that we did. And remember the bubble did not accurately reflect profits, so the market became inflated. When something becomes inflated, it must come back to reality. To explain better, profits were there, but stock prices were much higher compared to profits than commonly seen at other times in the market.

Edit [Moderator]: Image converted to a link:
http://bigpicture.typepad.com/comments/files/modifiedshiller.jpg

P.S. The graph by itself clearly dispels Clinton's contention during that campaign with Bush I, including the debate I remember in particular, that Bush was presiding over "the worst economy since the great depression." That was enough to convince me Clinton was a bald faced liar from Arkansas, and nothing ever happened since to disprove that.

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Thanks for stretching the whole screen out so that
nobody can read any posts on the whole page,
Bubblehead.

Now, not only are your own posts entirely unreadable,
so are the messages of everyone else who took the time
and effort to post on this page.

You have been on this forum less than a year,
and you have more posts than I have,
and I've been here three years.

Yet, am I supposed to believe that you still can't
post a damn graph without ruining the screen?

Why don't you screw up the whole page while
you are at it? Oh wait, you just

DID!!!

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Enhance your calm...

Job creation in September:

Quote:

September job growth below expectations

By David Lawder 1 hour, 9 minutes ago

WASHINGTON (Reuters) - U.S. employers added a scant 51,000 jobs in September, far below market expectations, according to a government report on Friday that showed broad weakness in the manufacturing and retail sectors.

That's 100k below what is neccessary just to keep up.

Cycloptichorn

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Keltic, calm down. I've run into the stretching screen problem because of other people, and I thought the graph was worth it to stare you in the face, as I did not know whether you would take the trouble to click the link. Hey, my sincere apologies for committing a very bad sin here, judging from the size of your fonts.

Anyway, the graphs I dug up were enlightening to me, and I hope they were to others.

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okie wrote:

Keltic, calm down. I've run into the stretching screen problem because of other people, and I thought the graph was worth it to stare you in the face, as I did not know whether you would take the trouble to click the link.

That's just my point. You knew the screen stretching problem was happening, and you decided your graph was so important that you were perfectly willing to sacrifice the readability of everyone else's posts on the page just so that you can get your graph in.

Beautiful.

For the record, there are ways to resize an image so that it fits on the screen without bollixing up the whole works. I suggest you learn them before posting any more large images. You have posted over 2,000 messages on this forum-it is not asking too much to expect you to take a little time to learn how to avoid abusing it.

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bm

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Quote:

September job growth below expectations

By David Lawder 1 hour, 9 minutes ago

WASHINGTON (Reuters) - U.S. employers added a scant 51,000 jobs in September, far below market expectations, according to a government report on Friday that showed broad weakness in the manufacturing and retail sectors.

Cycloptichorn wrote:

That's 100k below what is neccessary just to keep up.

Cycloptichorn

Indeed it is. Fact is, bush's job creation has not kept up with population growth for his entire term.

Below is Bush's job creation for people between 25 and 54 year old-people in the prime of their earning years. Notice how under Clinton, in that age group the job creation far exceeded the population growth. Note how under Bush it has lagged behind.

http://img.photobucket.com/albums/v645/kelticwizard100/PopvsEmployed.gif

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kelticwizard wrote:

Below is Bush's job creation for people between 25 and 54 year old-people in the prime of their earning years.

Just for reference, can you tell us the source of your numbers?

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Be glad to. The Bureau of Labor Statistics, from the Current Population Survey, (CPS).

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kelticwizard wrote:

Be glad to. The Bureau of Labor Statistics, from the Current Population Survey, (CPS).

Thanks!

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There is something in that graph, kelticwizard, that seems questionable. But I can't think of what it is!

Meanwhile, on a somewhat but not completely unrelated note is this.

The Nobel prize in Economics ("The dismal science") went to an American this year, it was announced over the weekend, for research he had done in the area of unemployment rates and the inflation rate.

Without getting too balled up in this, the conventional wisdom has long been that, when the level of unemployment gets "too" low, employers have to increase wages to compete for workers. The higher costs get passed on to consumers in the form of higher prices; i.e. inflation.
The Nobel laureate's research seems to show that that may be true in the short-term but the inflationary wave disappears over time.

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a canadian prime-minister (good old john diefenbaker) when at one time questioned about the high rate of unemployment , replied :
"we want people to have more holidays !" . (that was in the 'good old days' - late 50's) .
hbg

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realjohnboy wrote:

There is something in that graph, kelticwizard, that seems questionable. But I can't think of what it is!

The huge decline of population entering the target age group in the Bush administration?

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kelticwizard wrote:

Below is Bush's job creation for people between 25 and 54 year old-people in the prime of their earning years. Notice how under Clinton, in that age group the job creation far exceeded the population growth. Note how under Bush it has lagged behind.

Your post begs the question, why single out 25 to 54 year olds instead of the entire work force? Was that a way to get the most impressive looking graph to support your bias against Bush? Maybe not but just a suspicion?

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Where is the US economy headed?

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