It’s more than another solid data point. Non-farm payroll is about the most important indicator of the health of US financial markets there is.
Well, let’s see, Clinton had to face a massive budget deficit at the start - and the first thing he did was go about fixing it, regardless of whether you agree with the method he used or not - a Mexican currency crisis, then an Asian currency crisis, then a Russian currency crisis, and the collapse of LTCM somewhere in between, to name a few. That hardly qualifies as having the wind at your back.
He DID solve the biggest economic problem he was handed when he got into office: the budget deficit. Bush, by contrast, has done nothing to make the current account deficit, the biggest problem he faced on coming into office, any better. Shirking your responsibility by shoving a problem under the rug and hoping no one notices is not showing leadership.
That’s actually a pretty decent number, but it needs to be sustained, as we’ve had peaks in the past that proceeded to falter again. Too many of the jobs are still in the food service and retail industries (80,000 of them), but I’d still consider it a good sign if the trend continues. For reference purposes, here are the numbers for the past 10 years.
Interesting. Adding all the numbers together for 2001 to current, we get 965,000 jobs added during the Bush presidency, which is a little underwhelming. OTOH, the pace has certainly picked up these past few months. It does still seem early to shout about it from the rooftops or anything.
Was that flipping or twisting? :dubious:
Thinking about this s’more:
I think a lot of people are hesitant to give Bush much credit for the current economy for two reasons:
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They’re not convinced that we’ve entered a sustained period of growth, which seems reasonable – it is early to say.
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When the jobs numbers had been so bad in 2003&4, the administration was saying things like “our economy is strong, and getting stronger”, when the everyday evidence was saying otherwise. Now, a year later, even if things really are getting “strong & stronger”, this past experience could lead one to continue being skeptical about economic pronouncements coming from the WH.
But, really, sustainability is what it’s all about. We’ll see…
Five years into his presidency, and Bush gets a subpar recovery, and all us Dems are supposed to be cowed into submission by the sight of someone actually getting a job after billions and billions in deficit spending.
I’m not even sure anymore what this thread is supposed to prove, other than that even the most incompetent President will get a recovery, however lame (the average for Jimmy Carter, not fondly remembered economically, was 10814000/48 (St Louis Fed again) or 225,292 per month, average. This month didn’t even make that grade, on, it should be noted, a substantially higher base), somewhere in his Presidency, especially if he sticks around for 8 years.
If these numbers go negative, I’m starting a thread on it. Just because. This has gotten extraordinarily stupid.
Actually, this recovery has been going on for some time. A couple of years now. About 4 million jobs have been created in the last two years, and GDP growth was good in 2003 and 2004, and is trending higher in 2005.
Of course, that number is skewed by the large number of job losses in 2001, before any of Bush’s economic plans went into effect. So that’s a little disingenuous. And then 9/11 happened, and radically altered the economy. Any historical comparison of Bush’s record needs to take that into account.
Bush looks a lot better when you don’t try and help his numbers look better than they are. Most of us are happy to admit that things are starting to trend upwards, but you keep trying to make the numbers look better. In 2002, we lost 544,000 jobs. In 2003, we gained only 94,000 jobs. Last year, 2004, we gained 2,062,000 jobs, which is right around what we should get even without the bad years prior, but it was the first acceptable year we’ve had. We’re currently on track to gain a little over 2 million jobs against this year, if things continue down this path. You’ll notice I completely ignored 2001, which is the year you want us to give Bush a break on. Also, remember that losing jobs is not balanced out by gaining jobs. We’re supposed to gain jobs at a rate of between 120-180 thousand per month to keep up with population growth, depending on who you ask. So you need to add the jobs that should have been created to the number of losses to get the actual picture.
The problem is that while the individual monthly numbers have almost been good enough for the last couple of years, those lean year job losses don’t just disappear. Those millions of people didn’t die off, so we still need more jobs. Basically, sustaining 180,000 a month is going to take a very long time to get us caught up.
It’s much like the deficit. Cutting the deficit still makes the debt larger, it just slows the bleed. You actually have to eliminate the deficit and move to a surplus to start moving in the positive direction. The same with the jobs. If you get behind, just getting back on track isn’t good enough. You have to play catch up for quite a while.
I’m not trying to make the numbers look better - I’m responding to Pantom spinning the numbers to make them look worse. We heard lots and lots about the ‘2 million jobs lost under Bush’, except that 2/3 of them were lost in 2001, before any of Bush’s policies had taken effect, and in a year when the economy suffered numerous shocks - a recession, the WTC attack, the collapse of tourism, and the rise of oil prices.
In the end, the President will be judged on the totality of what the economy did on his watch. The fair way to evaluate his effect is to take the years in which his economic plans were in having an effect, and chart the change to the economy. The Bush presidency will essentially be measured by the years 2002 to 2010. After he’s out of office we’ll be able to go back and look at the total economic picture and compare it to his policies in an attempt to determine what effect they have. The change for the better we see now could simply be the normal business cycle asserting itself. Or it could be something more due to his supplyy side tax cuts or through the stimulus of deficit financing. It could also be another bubble - this time a liquidity bubble created by the rise of real estate prices and low interest rates, which is causing people to spend money and leverage themselves more.
Every President faces challenges.
As I’ve said, and as you have so far avoided saying anything about, the biggest problem Clinton inherited was the budget deficit, which he solved. Just to make this bipartisan, the biggest problem Reagan inherited was inflation, and he solved that.
The biggest problem Bush II inherited was the current account deficit, and all that’s happened with that is that it has gotten worse. He will be judged as Nixon has been, economically: at this point, Nixon’s trashing of Bretton Woods is pretty much all he’s remembered for in this area. Bush II’s failure to face up to this, by far the biggest problem the US economy faces, is what he will be judged by in future years.
And no, I’m not spinning, regardless of what you say. You presented numbers outside of any historical context, and without an objective benchmark for judging the relative performance of this President against others. I did. Takes work, but it’s the only real way to do it.
Just to make it clear how biased your presentation is, let me reuse a cite I used in the euro thread, except a different part. From Reuters latest report on US reserves and debt:
That last part, which is an improvement only if you take it out of its historical context and do only a year over year comparison, instead of acknowledging that Bush II inherited a surplus, is what you keep harping on. But he inherited that current account problem, and it has grown so large that really no one can quite get their minds around how to solve it without throwing the entire globe into a depression.
Every good President solves one problem, but leaves behind another, because no one is perfect. Reagan solved inflation, but left behind the budget deficit as a problem. Clinton solved that, but left behind the current account deficit as a problem.
Bush II has solved nothing, and is so far threatening to leave behind both the budget and the current account deficits as problems. And he’s doing all of this while presiding over a very subpar recovery phase of the cycle, at least so far.
Wow. My ‘biased’ presentation is to look at the generally accepted economic indicators for evidence of how the economy is doing. Your ‘unbiased’ presentation is to declare that a president must be judged on how well he solved ‘one big problem’, and to further declare that the current account deficit IS the ‘one big problem’, and therefore Bush is a failure.
I think you need to re-evaluate just who is attempting to spin things for one side here.
Do you know why the current account deficit is so high, btw? It’s high because the U.S. economy is outperforming the world economy. The growth in demand for goods in the U.S. is higher than the growth in demand for goods elsewhere in the world. So Americans are buying up stuff from other people faster than they can buy up American stuff.
I’m curious how you think the president is supposed to ‘solve’ this. What tools does he have at his disposal that would not do more harm than good? He could slap trade tariffs on imported goods. Think that would be a good idea? Or perhaps he could raise taxes so high than it depresses the economy so that there’s less growth. Good idea? The one thing I can thnk of that could be done would be to get China to re-value their currency, and the Bush administration did pressure them to do so and they have moved in that direction.
The current account deficit will correct itself if it continues. It exists in the first place because Americans are enjoying low-priced imports. Eventually, enough foreign investors will decide that they are holding enough American dollars, and the value of the dollar will drop and/or interest rates will rise to make the dollar more appealing. This will drive up the price of imports, balancing the playing field. This is not a disaster, it’s a normal correction to an economic imbalance. Any federally-imposed ‘fixes’ might just make the problem worse or cost more than the problem it’s trying to fix.
As for Bush ‘inheriting a surplus’, this is a great Democratic talking point, but it doesn’t bear much relation to reality. The 2001 budget had a 33 billion dollar deficit. The 2002 budget had a deficit of 317 billion dollars. Why the huge jump in one year? Only 80 billion was due to tax cuts, but total receipts dropped by about 140 billion dollars. That’s because the economy was in a recession. Had Bush simply carried over the last Clinton budget intact, there still would have been a huge deficit.
The other thing the recession did was put a whole lot of people out of work, and they went on employment assistance. The cost of which jumped from 269 billion to 312 billion. And these were jobs that were lost BEFORE any of Bush’s policies could take effect due to the collapse of the tech bubble, and as a result of the 9/11 attacks.
Then there was the spending due to the war on terror. National Defense spending jumped by almost 50 billion dollars that year. So if Bush hadn’t implemented any tax cuts at all, just the increase in defense coupled with the recession would have resulted in a deficit of at least 190 billion dollars. Bush had almost no control over any of this, and should not be criticized for it.
So where did the rest come from? Here Bush is open for criticism, but I suspect you won’t like criticising this stuff much, because where Bush is guilty is where he did things that Democrats generally like. He increased education funding from 57 billion to 72 billion. Health spending went from 172 billion to 196 billion. There was the bailout of the airline industry. The Department of Homeland Security got 28 billion. There were increases in government programs across the board, and quite substantial ones.
So it’s fair to criticise Bush for the deficit, but not for ALL of it. Saying he ‘turned a surplus into a 300 billion dollar deficit’ is an unfair characterization. A better one would be, "He could have held the deficit to 200 billion or so. Instead, he tried to be a ‘guns and butter’ president and overspent in a time of war. Bad president. No cookie.
Still, the primary criticism of Bush by the left continues to be his tax policy, and it may be that very policy that has caused the U.S. economy to boom and for tax revenues to begin to increase dramatically. And had he not implemented those tax cuts, there still would have been big deficits, and it’s likely that the recession would have been deeper and lasted longer. The tax cuts may have avoided the dreaded ‘double dip’ recession and prevented deflation by keeping demand for goods and services up.
Actually, no, the ‘first thing he did’ was to attempt to increase the deficit by $16 billion. Republicans blocked the effort.
Regards,
Shodan
How is the President supposed to ‘solve’ the C/A deficit? By being President.
By:
- not cutting taxes at the same time as going to war.
- showing a little courage: in 2003, I believe it was, the Japanese spent more than they ever had before in a single year on currency intervention, targetted directly at us and our economy. This made the current account deficit worse, of course, by keeping the currency from falling as far as it might otherwise have fallen. I don’t recall the President saying or doing anything about this. Whatever he did, it didn’t stop them.
- showing a little courage, part two: as the Cato Institute points out here, he hasn’t vetoed a single bill. As Barron’s pointed out in their editorial this week, the Congress passed a transportation bill (the Republican Congress, Shodan, although with bipartisan support; everyone loves to bring home the pork) that had, according to them,
The chutzpah displayed in this bill is extraordinary: it includes $229 million for a bridge in Alaska to be named after Rep. Don Young, Republican of Alaska and the manager for this bill in the House.
Will Bush sully his perfect record by vetoing this monstrosity? Not likely.
This refusal to be responsible at all ties into the current account deficit because the budget deficit is a minus from national savings, and the lack of overall savings in the economy is one of the reasons for it. Acts like vetoing the above bill are directly under the control of Bush. A large part of the deficit is directly traceable to the fact that he has conspired with the Republican Congress to increase spending on pork at the same time as he has been busy cutting taxes. This is demagoguery at its worst. Barron’s, once again, gets it right:
- finally, showing a little courage, part three: when China slapped him right in the face with their 2% revaluation, his reaction was akin to that of the frat boys in Animal House: Thank you sir, may I have another! Sometimes, it’s downright painful to watch this Administration as it gets slapped around by the actual adults who run the rest of the world, and are taking this Administration for one hell of a ride. Of course, he didn’t help his cause by running up huge deficits earlier that were, in effect, financed by China. Ditto for dealing with Japan, too. It’s a bit hard for a debtor to dictate to his creditor; usually, things work the other way around. So much for promoting the US national interest via his economic policies, eh?
As for your economic indicators, once again: the actual historical context shows this recovery to be subpar in relation to what happened in prior recoveries in prior Administrations. Simple point.
Shodan: I’m sure you’re right about whatever in tarnation you’re referring to. Please consult
this timeline. Clinton’s deficit reduction plan was passed on August 10, 1993. So you’re right, technically it wasn’t the first thing he did. So sorry. Meantime, Nafta, his second major economic achievement, which he spent major political capital on even though it was started by his Republican predecessor, and even though it went against the politics of his constituency, was signed on December 8. What this shows is that Clinton was doing what he thought needed to be done, and was willing to go to the mat with his own party if necessary to do it. He was, in short, being President, and showing he had an actual spine. Whether you think either of these two acts was in any way responsible for the subsequent prosperity, only the longest, strongest period of growth the nation ever went through, is of course a judgement call on your part.
Pantom: Your arguments would have been better had you not tried to tie them all to the current account deficit. None of the things you mentioned, except the Chinese re-valuation, have anything to do with it.
Despite that, you are correct about Bush’s failings. The Highway bill is a monstrosity, just filled with pork. It’s like Republicans are the party of smaller government whenever THEY aren’t the government, but once they control it, party on. It’s disgusting. Bush promised to veto the bill if it went over an (already outrageously high) cap. The Republicans pushed it 4 billion over the cap anyway. Bush should veto it. He probably won’t, to his shame.
Best thing Clinton did. And isn’t it a shame that his own party has now veered back to protectionism? CAFTA passed against the opposition of all but a handful of Democrats. It looks like neither party has principles.
No, the Dems have been quite consistent in their protectionism. Nafta passed with mostly Republican votes, as I recall. Not a thing I like.
Re the rest: His silence on Japan’s actions in 2003 was directly related to the current account situation. Indeed, letting Japan do that then let China keep the yuan tied tightly to the dollar; in that year, at least, it would have been very hard for them to do it all by themselves. The mere threat of currency intervention by Japan keeps the dollar from falling any further over in Asia, because of the memory of 2003. Once again, this enables China.
The connection between domestic spending and the current account is: that the bonds used to finance this are bought overseas. Refer to that reserves report I cited earlier. Overseas ownership of Treasuries is high and increasing. This of course decreases our leverage in negotiations with China and Japan, certainly, since they can point to their financing of our deficits. This goes directly against our national interest.
Actually, through some shady accounting, they actually went about 9 billion over the cap. See here.
I think it is a shell game, with foreign governments taking your money. I do not like to predict how things will play out. I do know that the U.S. is more than prepared to move to reconstruction once the present parties have met their appointment. Only time can give us appointment. I look at the economics of the countryside… I see waste. The true test of the economy comes from Sun Tzu, who wrote concerning that when the State concentrates power, the people suffer, when the Emperor allows the wealth to grow in the countryside, the State is rich. The State he refers to is everyone who is counted at census. I am counted, I am in debt up to my eyeballs and if this pile gets too deep, I can’t break it off because of the New and Improved Bankruptcy Laws.
Sun Tzu also says, “No country has ever profited from protracted warfare. Those who do not thoroughly comprehend the dangers inherent in employing the army are incapable of truly knowing the potential advantages of military action.” (p.173; The Art of War; Westview) Now that sounds like an idea this administration can hang its hat on.