I’m guilty of horrible writing there. What I meant is that I think there will be increasing numbers of terrorist warnings and fears of a terrorist attack will increase as the election approaches. After the election, if there are no terrorist attacks the fevered pitch will subside, consumer confidence will increase, and business hiring will pick up again. I believe this is the case because most of the other economic fundamentals are still very high.
Basically, I think the markets and the business community are putting a risk premium on everything. Businesses are asking, “What if I hire this person and something happens that throws us back in recession?” The markets are depressed because the risk premium makes stocks less attractive.
Sam:What I meant is that I think there will be increasing numbers of terrorist warnings and fears of a terrorist attack will increase as the election approaches.
Why? This is the part I don’t get. If the level of warnings and fears reflects the level of actual danger, why should the actual hazard diminish significantly just because the election is over? And if the warnings-and-fears level is not strongly correlated with the actual danger level, then doesn’t that imply that the issue is being hyped for political purposes?
And how does tight oil fit into the election schedule, if at all?
If I understand SS post, theoil and the election. were separate unless you go for that “Bush telling Saudis to ease oil prices so he can win” stuff.
The terror threats will probably relax after the election in the same way that the terror alert rises before major holidays and falls after. People think that the terrorists will strike when people tend to be gathered in easy to target places. Also the attacks in Spain showed that they may attack to disrupt elections. Thusly an increased fear of attacks until the elections are over.
I’m not sure that the terror warnings cut much ice out here in the rural Midwest. The chances that a bunch of Jahadists are going to blow up the Co-op Elevator is pretty slim. The economy, however, is another proposition all together. We had a plant here making soft sided luggage for a national brand mail order house. It employed some 90 people, primarily women, at wages that were pretty attractive around here, from $13 to $20 per hour plus benefits. In April the plant closed on 60 days notice. 90 women out of work in a town of 2500. The plant shifted its operation to Mexico. Some of the out of work employees found work in a shop that makes sweat clothing in a town 25 miles away, but most of them are still out of work and because of families, farms, training don’t have the option of leaving to look for work.
That sort of thing has a much greater impact on this community than any messing around with terror alert levels and conjecture on future terrorist attacks – except for the titillation value, it distracts us from increasing economic distress.
It may be too late for the President to do anything but continue to proclaim that his tax cuts are working to make the economy better (a proposition that looks pretty dubious from here) but we may be in too deep for any change of administration to do much about it in the short term either. I do know that we aren’t going to become comfortably prosperous by doing each other’s laundry at cut rate prices.
Perhaps. I am no economist. But didn’t the index of leading economic indicators decline in June? Wasn’t that during the time when oil prices were receding, or was that still during their first rise?
Also, since jobs creation has been falling away consistently since March, it is hard to see just how this is a “temporary” pinch. It strikes someone like myself that the few months of good news that we enjoyed at the beginning of spring were a temporary relief from the pinch.
I read your evaluations of the economy approximately a month ago with some skepticism, and it seems since then that they have not been borne out. The cynical side of me reads your predictions in this post as an anticipation that the economy will begin to function better under Kerry, and an effort to seed the counterspin for why it isn’t his policies that are the cause. But I’m just a layman when it comes to economics, and a cynic when it comes to the words of the right, so take that for what it’s worth.
They were, but that was driven mainly by lower real-estate and lower vehicle sales. Over half the indicators were higher. The lower real-estate can be attributed partly to the 25 basis point rise in interest rates, and slower vehicle sales can be attributed at least in part to higher energy costs.
Still, there’s no question that there’s been a pretty significant slowdown in the economy over the summer. The question is why.
Actually, that never even occured to me. I take it as a given that however the economy performs over the next year will have nothing to do with Kerry, because he wouldn’t even take office until January, and it would take quite some time for his policies to take effect. The ‘Kerry Economy’ would really start in his second year in office.
Because we all know that the left’s hearts are pure.
Earlier in the year, when the job growth number first came out stronger than expected, I said something to the effect of: “One month does not a trend make. Let’s see if we can get 3 or 4 months of consistent growth before we get too excited.” The same thing applies here. The only difference is that we’re closer to the election, so everyone wants to jump on the numbers and make political predictions.
This business about presidents “creating jobs” or “losing jobs” is mostly political nonsense. But it does play in Peoria, and since perception is reality, politicians can stand or fall on an issue that is largely out of their control.
I mostly agree John Mace, the problem is that it is the current politician in the white house who is making a stronger connection: His tax cuts were supposed to create more jobs around this time, so I guess this administration has the same kind of economists that made his job forecasts also.
Add to that, his recent political advertisements taking credit on the creation of more than a million jobs (which is still one million short of what we had when he took office), affirming that more were coming thanks to his policies, means that he is clumsy to stand on this issue.
OTOH, it is not 100% accurate to say presidents don’t affect the economy, they are a factor, seeing that the economy is going global means to me that internationally we have to have better relations with the world, something that this administration is fumbling.
One thing that I always believe: it was nonsensical to give that huge tax cut, mostly to the very wealthy, with virtually no strings attached, giving us also the current situation that many of those wealthy fellows, instead of investing and creating jobs in America, used their tax cuts to move their enterprises overseas. Again, this was not the only factor on them leaving, but it was one that the current president made easier for them.
As I am not much of a protectionist, I think the people that remain should get more benefits in education and we finally have to drop this idea that health care should be provided by the employer, taking care of the disruption and abuse many are suffering when their health care goes away has to be part of a newer deal, in exchange for allowing free enterprise to move all about.
Since I don’t see the current administration even considering those ideas, I go for Kerry.
Yes, he will have reap what he has sown. Make foolish predictions, and suffer the consequences.
Yes, presidents (and legislatures) can and do affect the economy. The question is, how do you isolate that effect from all the other complex variables. I tend to think you can’t, and so I pretty much ignore statements about “presidents creating jobs”. However, I find it hard to believe that any ill will other countries might have towards us would interfere with economic relations to any significant degree.
Oil prices certainly have had an impact but not terror. Retail sales have not been growing much. Bush’s package is having an effect, with high end retailers doing better than low end ones cite
Terror fears are not mentioned at all, and I have a hard time imagining how they can affect retail sales. Things are going to get worse - the little bit of money from the tax cut that the middle class has seen is long gone, the Fed has to raise rates again, at least once, and there is no money, thanks to the Bush deficit, for any more stimulus. There is no way George “Herbert Hoover” Bush is going to go into the election with net job creation.
A question on the numbers: Over 100,000 people enter the work force every month. Is the million person job loss an absolute loss, or is it a loss considering the increased work force. I think the former, which means that the net loss in jobs available vs. people needing them is more like five million.
You know Elvis, I did remember that thread. That is why I had not replied to his posts in this one, on the other thread Sam Stone was accusing everyone that was mentioning the data of the past (how many jobs we had when this administration came to power) as being irrelevant and that they were spinning, I got the impression that he considers what happens now as more important as what happened before.
Well, this is now, and I hoped that since Bush was making assurances, that he and his tax cuts were going to create hundreds of thousands of jobs now during this months; that even Sam, like John Mace would criticize Bush, alas.
NOW we see that many reports the president and Sam Stone were using were not accurate, and many investors did follow plans based on them. The sell out on Wall Street points to me as the realization that the “leadership” model of trusting flawed data is not working anymore.
So, you still say we are doing pretty good? Well, I am getting tired to have to have to live under just a pretty good president. With my pretty good contract job, with no benefits, that can be send to India at any moment. I will not feel content until I at least get a fair chance to get a great job.
*There was once a pretty good nation,
Pretty proud of the greatness it had,
Which learned much too late,
If you want to be great,
Pretty good is, in fact, pretty bad.