$318 Billion Deal Is Set in Congress for Cutting Taxes

!Don't say that Bill! !Puh-lease! That sets us up for one of those pious lectures about trickle down -- which would make me trickle down, I tell ya.

Okay, I didn't say it, but everyone - softly, think it to yourself!

I'm living in the real world where money doesn't just disappear from the economy because someone chooses not to spend it on consumer goods. Ever hear of investment? Going to tell me that has no impact on business? Ever hear of the money supply? Think increased savings levels have no impact on the supply of available funds for investment, for loans, etc.?

Stop whining and THINK.

Scrat
That is economic BS. There is more than enough money available however, who do you think will invest it considering the level of risk and meager returns. In addition this is a consumer based economy the only thing that will spur investment is the level of consumer spending. That is where the money will do the most good not in the pockets of the wealthy. If the purpose of tax cuts is indeed to spur the economy it doesn't take a genius to know who should be getting them.

I agree with you, au; tax cuts for the rich will not stimulate our economy. We are looking at over-capacity, not under-capacity of our businesses, and you won't find many CEO's talking about "expansion" any time soon. Our economy is "constricting," not expanding. Many office buildings in Silicon Valley is vacant. No more investments in office expansion is needed; we need to first get occupancy rates close to 95 percent before new construction can be justified. Office lease rates are dropping; who's going to build? Money don't mean sh*t in this economy, except when the consumer has it in their pockets to spend. c.i.

The only trickle down in the economy is the lost of jobs - not for the rich mind, they have golden parachutes and it has to get pretty bad for them to be fired. Isn't it a great Republican sham we live in!

BillW, Many of those taking advantage of those shams are also democrats. Many of them are church-going types too! c.i.

Yeah, but it is republican policy - never said I was a Democrat to begin with! Greed runs many directions in this country - Bush told everyone (except the rich) to sacrifice for the country - gees, what a jerk!

BillW, That's where his "compassionate conservative" seems like another WMD. Looked and looked, but couldn't find any of it. c.i.

Scrat
I just wanted to make sure you did not miss this bit of information regarding your 'Improving economy"

Consumer confidence erodes in June

Shoppers less optimistic about economy, but slippage is less than economists had expected.
June 27, 2003: 10:10 AM EDT


NEW YORK (Reuters) - U.S. consumers were slightly less optimistic about the economy in June, according to a University of Michigan report seen by market sources Friday, as the job market stayed stagnant and a stocks rally faded.
In its final reading of consumer sentiment, the sources said the university's index fell to 89.7 during June, compared with a preliminary reading of 87.2 and May's final figure of 92.1. Economists polled by Reuters had expected, on average, that the figure would slip to 87.3.
The current conditions index rose to 94.7 in June against May's final figure of 93.2. But the future expectations component deteriorated, hitting 86.4 against May's 91.4.
Michigan's gauge was largely in line with a survey released Tuesday by the Conference Board, a private New York business group. The Conference Board's index showed that sentiment toward the economy's current state had also waned in June, but consumers were increasingly expectant that the business activity would rebound within six months.
Bellwether U.S. stock indexes surged after the end of the war in Iraq but have stalled recently as signs of an economic revival remain tentative. The moribund labor market has shown no sign of turning around and economic growth has not accelerated sufficiently to create new jobs.

Yes, and those at the lowest income levels got the largest cut in their tax rates, and those at the top got the smallest.

But again, I don't need you to agree with reality for it to be reality. It already is.

au - I wonder whether you even notice the disparity between the headline "Consumer confidence erodes in June" and the text "slippage is less than economists had expected" and "U.S. consumers were slightly less optimistic about the economy in June..."

I know you want to portray this as terrible news, but--and I'm going by YOUR source here--if things were not as bad as "economists had expected", that's what we call good news.

But please feel free to keep hoping for the worst, and I'll keep watching things improve.

If deflation sets in, the Bush will come out saying, "The economy needs a little deflation to be good, a little never hurt nobody and I have already insulated the most important Americas". Then the Republican pundits will hail the good news.

Scrat
That is like a Dr. telling a patient I thought that I would have to amputate your leg above the knee. However, I was too pessimistic only had to amputate above the ankle. The government economists predict the worst to allow them to say things are better than we anticipated. If the economy is not as bad as expected does that make it good?

Only when Republicans are in office au.

Where in YOUR SOURCE did it claim to be quoting GOVERNMENT ECONOMISTS?


I understand that you think things are getting worse (or not improving). I believe they are getting better.

Consumer Spending Rises 0.1 Pct. in May

U.S. economy set to recover, but jobs scant-report

Dollar on bull run as strong U.S. growth eyed

Of course, I am quite aware that there are other reports that caution that things are not getting better yet and still others that claim things will get worse yet. I UNDERSTAND THAT.

Based on limited information and my gut, I think we are already on the way to recovery. I can accept that you (au) see it differently.

If anybody thinks the economy is improving, I'd like to sell them a bridge in Montana on prime property. c.i.

I appreciate the offer, but while I think the economy is on the mend, I am not personally doing well enough at this time to invest in real estate.

2003

Media

Exuberant Again

It's no surprise that readers are skeptical of media assertions that the economy's bouncing back

by William Powers

.....

Wait a minute, the economy's coming back! So say the financial pages, anyway, if a bit warily. "Shares Rally as Economy Shows Some Signs of Recovery," was the headline over a recent Reuters story in The New York Times, capturing the general feel of this kinda sorta turnaround, this maybe-the-bull's-back-in-town story.

And from some highly influential corners of the financial media comes a more emphatic message about the recent rally, an admonition that America just isn't taking this nascent recovery seriously enough. We apparently aren't buying into it sufficiently by rushing merrily back to stocks, and—tsk, tsk—this is very, very bad of us, and we should all go stand in the corner for a while and think about our behavior.

"The Market Is Half Full," announced a knuckle-rapping Wall Street Journal opinion piece last week by James J. Cramer, the irrepressible market swami. Cramer scolded the half-empty camp, wondering if perhaps "everyone from Alan Greenspan to the president is too negative." His Panglossian pique rose to this crescendo: "Maybe we are in one of those rare moments where capitalism should be getting its three cheers and instead is being voted off the stage by a chorus of wronged investors, permanently pessimistic intellectuals, and politicians who don't want to see the positives."

"An unpenned bull is striding down the middle of Wall Street these days, but it's being ignored just like the emperor's lack of clothes," wrote Chris Pummer of CBS.MarketWatch.com, a leading personal-finance Web site, this week. The piece couldn't have closed more definitively: "Believe it. The bull is back."

To which hordes of burned investors, people who may never again see the nest eggs they've lost, can only respond: Oh is it really, now?

If the public doesn't respond to this new round of "buy" orders from the media, and the economy doesn't come roaring back as quickly as it might, who's at fault—all those frightened investors trying to protect the pennies they still have, or the media outlets that took them for a ride in the 1990s and are now widely and justly distrusted?

Remember all the brilliant magazine stories about tech stocks that were going to make us rich? Remember when stock-picking geeks were profiled in the adoring tones once reserved for sports heroes and movie stars? Surely you recall the unbeatable Janus Fund, the wild success story that launched so much fawning coverage not many years ago. The Colorado-based outfit wound up with more than $300 billion in investors' money at the market peak in 2000. My sad little skeletal IRA remembers those ebullient stories all too well. Recent headline from CBS.MarketWatch.com: "Fading giant Janus offers few worthwhile funds." Thanks, fellas.

But the crash served one useful purpose for American investors: It revealed the tragic flaws of personal-finance journalism. One is that personal-finance outlets tend to be heavily dependent on advertising from the very industries they cover: Wall Street brokerages, high-tech companies, and others. Thus, even as they try to give disinterested advice, it behooves them to essentially cheerlead any boom, because that will put more cash in their pockets.

A story in The New York Times Business section this week noted that SmartMoney magazine, which rode the '90s boom very nicely but has been suffering of late, now hopes, as David Carr wrote, "that a recovering market will help stabilize the magazine." Edwin A. Finn Jr., the chairman and editor in chief, told The Times, "The turn in the stock market has been helpful."

See how that works? In fairness, I should note that SmartMoney and other top-tier financial pubs didn't surrender their journalistic skepticism in the '90s, and often ran negative pieces about Wall Street and big companies that buy ads. Finn also heads up Barron's, another member of the Dow Jones family that was often bravely bearish in the '90s, and wound up looking wise in retrospect.

But the fact remains that booms are good for the personal-finance media, and in tone and temper, many fanned the flames of irrational exuberance. They convinced a lot of moms and pops it was wise to make financial moves that later lost them their shirts, and have little standing to tell us what to make of the market right now.

The other tragic flaw is that personal-finance outlets tend to be followers rather than leaders. Because they need evidence to make the case for particular stocks and funds, they focus on strategies that have already paid off and can be documented with performance numbers. As a result, they often urge people to go into investments whose best days may well be over.

This cycle seems to be playing itself out again right now, with the real estate rush. "How Real Estate Really Builds Wealth," says the cover of the June issue of Money magazine, and the words "Real Estate" and "Wealth" appear in the same green font, just to make sure you get the message. After several years of astonishing real estate gains, Money is suggesting that it's still a lovely time to jump in. Even the one article that asks whether this boom could go bust has an upbeat feel. Sample text: "Even where there is a bubble, a pop is unlikely."

Money actually posits that real estate investments might just build better people: "A 2001 study by researchers at Ohio State found that children of homeowners scored higher on math and reading tests than children of renters, the likely reason being that homeowners don't move as often as renters, thus creating a more stable environment."

Did someone say irrational exuberance was dead?