Friday, April 15, 2005

 

The Bush boom continues...

While we are on the subject of Bush’s plan to privatize Social Security (see the comments in the previous post), check out what is happening in the markets today:

Wall Street suffered its worst single day in nearly two years Friday, with the Dow Jones industrial average falling 191 points for its third straight triple-digit loss. Deepening concerns over economic growth and higher prices led to the worst week of trading since August.
An already uneasy market began the biggest one-day selloff since May 19, 2003, after the Federal Reserve reported drops in manufacturing and other industrial production, and a Labor Department report showed higher oil costs driving up import prices.


Weren’t Bush’s tax cuts for the rich supposed to “jumpstart” the economy about two years ago?
Comments:
Tax cuts for the rich? The rich pay the most in taxes, didn't you know? If they get a tax cut, it also helps build jobs because the "rich" as you call them (is there some reason why we should be hostile toward those who have more than we do? We all have choices, and we can't blame "the rich" for what we choose to do with our lives) will have a break and be able to put more money back into the economy.
 
Yes, the rich do pay the most in taxes which is as it should be. That is because they recieve the most benefit from having a stable government and society where their money and investments are protected.
If it was as simple a matter as cutting taxes for the rich to produce job growth, then what happened during the first four years of the George W. administration?
What we need is fiscally responsible leadership that does not allow deficits to get out of control and drive up interest rates to the point that it drags our economy down. That is not what we are getting from Bush and the Republicans.
 
What we need is fiscally responsible leadership that does not allow deficits to get out of control and drive up interest rates to the point that it drags our economy down. That is not what we are getting from Bush and the Republicans.

As much as I dislike some of the spending of Bush (Medicare prescriptions, especially), the thought of turning to the Democrats as an alternative to hold government spending down is simply ludicrous...indeed, if you check out the debates over all of Bush's drunken sailor spending, the remarkable thing is that in each instance, Democrat leadership was complaining about not spending even MORE.
 
What we need is fiscally responsible leadership that does not allow deficits to get out of control and drive up interest rates to the point that it drags our economy down.

Are you suggesting that we're currently suffering under high interest rates? The 10-year Treasury closed Friday at 4.271%. This rate ended 2004 at 4.27%, ended 2003 at 4.01%, and ended 2002 at 4.61%. Before that, the last time they ended a year below 5% was 1966. Average rate from the 60's was 4.84%. 70's was 7.5%. 80's was 10.59%. 90's was 6.67%. 2000's is 4.79%.

Say what you will about Bush's economic policies, but the notion that interest rates are out of control (or even moderately high) is flat-out ignorant. Rates are very, VERY low.
 
Matt is correct. I deserve to eat crow for suggesting that interest rates are high. However, I would note that the reason they have been so low is due to Alan Greenspan's desperate manipulation of the rates at the Federal Reserve Board last year when he was trying to give Bush an economic boost in time for his re-election campaign.
Fortunately for Bush, he didn't need a healthy economy to win the election. Scaring the American electorate with tall tales of WMDs in Iraq was sufficient.
 
Blaming Bush for the latest 'market adjustment' is like blaming Clinton for the stock market internet bubble bursting. While Bush may have some influence, there are far too many indicators and variables that enter into the picture for him to directly cause a one week tumble.

I also find it difficult to believe that Greenspan acted solely for Bush's political gain. He has a very consistent record of nudging the economy, despite who was in office.
Besides, even assuming you are correct, and that the economy was helped, well by golly, that's a good thing.

Also, 'concerns over economic growth and higher prices' does not mean that the economy has not been 'jumpstarted'. For example have you seen the gains in the banking industry? How about the economic growth spurned by the gains in the oil industry?

And why is rising import costs so bad? People have beem griping for years about manufacturing jobs going overseas. The higher it costs to import those products, the more likely those products will again be manufactured locally.
 
Alan makes a good point, although I would point out that Clinton DOES get blamed for the tech bubble burst along with everything else that did and didn't happen during his administration.
But I would just say that my knock against Bush is for the economic performance during the entire time he has been president and not just for this latest bad week on the stock market.
I can handle the ups and downs of the economic cycle, it's just when there are never any upturns that I start to get antsy. Did somebody say there was an upturn? What happened? Did I blink and miss it??
 
Did I blink and miss it?

Perhaps...after all, you seem to have also blinked and missed 9/11 and its catastrophic effect on the early Bush economy.
 
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