# How's the economy doing? **URL:** \ **Category:** Great Debates\ **Created:** [May 9, 2004, 3:25pm UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293 "2004-05-09T15:25:20Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Brutus](https://avatars.discourse-cdn.com/v4/letter/b/91b2a8/32.png) [@Brutus](https://boards.straightdope.com/u/Brutus)\ **Post date:** [May 11, 2004, 2:15am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/61 "2004-05-11T02:15:53Z")
> [@Reeder](#): > > Pssst… > > That was just the dot.coms… > > A very small part of the economy. Golly, really? No shit. But the phoney valuations of those companies flooded the country with capital (based on crap, remember). Said (based on crap) capital created jobs in all sorts of sectors. Dot-com employees buy product A from Company B, which hires more people to meet demand. Company B employees are now spending more money on Company C products, and so forth. It was a house of cards. Greenspan made the call, but was booed down. If we ever do see another time like the roaring Nineties, brace yourself, because it will fall. Again. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [May 11, 2004, 2:22am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/62 "2004-05-11T02:22:12Z")
**Brutus** , Greenspan created that bubble, partially in response to the LTCM debacle, partially because of the Russian and Asian currency crises, and finally, because he felt the need to flood the country with liquidity for Y2K. Greenspan, more than any other single person, bears the responsibility for Nasdaq 5000, a level I expect to see again only when I’m old and even more cranky than I am now. BTW, **manny** , I’d be real interested in all those topics you brought up on the previous page. I’m a sucker for new ideas on how the economy currently is operating, since there might be a way to make some money off it. Meantime, one of my favorite quotes on Bushco’s economic advisors, who’ve proven themselves to be geniuses at making themselves look silly. From a Barron’s of a few weeks ago, I don’t remember which issue, by the always hilarious Alan Abelson: > [@](#): > > Outsourcing in the long run is likely a good thing for the economy. So spake N. Gregory Mankiw, chairman of the President’s Council on Economic Advisors… Actually, it would prove telling for Mr. Mankiw’s argument were he to eat his own cooking, so to speak. A casual tally discloses the staff of the Council on Economic Advisers numbers roughly three dozen (and we’re not including a pack of interns)… Now, we don’t know what exactly these stalwarts take home every week; we imagine it’s public knowledge, but, in any case, we feel safe in assuming it’s more than $10 an hour. And that’s our point. We suspect there are legions of qualified economists in Bangalore or Guangdong who would leap at the opportunity to do the council’s work for a modest fraction of what the council pays its people… The beauty of such a move, besides powerfully buttressing his case and buttoning the lips of his snarling critics, is that the council’s work could be outsourced without even the tiniest diminution of quality. Consider: Early last year (under a different but equally luminous honcho), it predicted that in 2003 payrolls would swell by 1.7 million. As it happened, that forecast was a tad errant since not a single, solitary job was added last year and, indeed, some were lost; and we confidently venture that this year’s estimate of 2.6 million net new jobs also will prove wildly - make that ludicrously - optimistic. So, operating on that basis, as the council manifestly does, that a miss is as good as a mile, our putative Indian economists couldn’t have - or possibly do - worse. It appears that Abelson actually has a chance at eating a little crow on the last part of that quote, which would be a good thing. We’ll see. ---
**Author:** ![Reeder](https://avatars.discourse-cdn.com/v4/letter/r/c6cbf5/32.png) [@Reeder](https://boards.straightdope.com/u/Reeder)\ **Post date:** [May 11, 2004, 2:23am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/63 "2004-05-11T02:23:22Z")
I love your sig Comrade **Brutus**. It fits you and Bushco to a T. ---
**Author:** ![Merhouse](https://avatars.discourse-cdn.com/v4/letter/m/b5a626/32.png) [@Merhouse](https://boards.straightdope.com/u/Merhouse)\ **Post date:** [May 11, 2004, 2:28am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/64 "2004-05-11T02:28:21Z")
Some of the jobs growth has undoubtedly come from the beverage bottlers (well, Coca Cola Company, anyway) who are now making 1.5 liter bottles and selling them for the same price they were selling 2 liter bottles for last week. I wish I still had my Whip Inflation Now pin. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [May 11, 2004, 2:58am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/65 "2004-05-11T02:58:06Z")
> [@LuckySevens](#): > > > [@Sam Stone](#): > > > > 5.6%, by the way, is one of the lowest unemployment rates of any country on the planet. Japan and Luxembourg are lower, I think, and that’s about it. Japan’s is lower because it has virtually zero immigration and a population that is not growing. > > Nitpick: Australia has a lower unemployment rate at the moment than 5.6% And, from [this](http://www.oecd.org/dataoecd/41/13/18595359.pdf) cite, we can add in Austria (4.5%) and Ireland (4.5%) based on a comparison of March data. If we are willing to go back a few months for those countries that don’t have as up-to-date data available, we can also add Korea (3.7% in Dec 2003), New Zealand (4.6% in Dec 2003), Netherlands (4.7% in Feb 2004), Norway (4.3% in Feb 2003), Switzerland (4.2% in Dec 2003), and U.K. (4.7% in Dec 2003). **So of the 27 countries listed by the OECD, I count 11 with lower unemployment rates than the U.S. From this, I’d conclude that the U.S.'s unemployment rate is one of the lowest unemployments rates of any country on the planet once you exclude most of those with lower unemployment rates.** 😉 [And, in many of these countries with lower unemployment rates and many of them with higher ones, you still have health insurance when you lose your employment.] ---
**Author:** ![Reeder](https://avatars.discourse-cdn.com/v4/letter/r/c6cbf5/32.png) [@Reeder](https://boards.straightdope.com/u/Reeder)\ **Post date:** [May 11, 2004, 3:04am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/66 "2004-05-11T03:04:47Z")
Never confuse **Sam Stone** or **Brutus** with facts. Nothing good could come of it. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [May 11, 2004, 3:09am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/67 "2004-05-11T03:09:46Z")
> [@Gorsnak](#): > > Frankly, I was stunned during 02 and 03 when the Canadian job market kept churning out jobs. The past two years, while the American job market stagnated (until its recent dramatic turnaround), ours was still solid. Late last year, and through the winter, ours finally went soft, I think due to many combined factors - SARS and BSE and a stronger dollar and the weaker American economy finally catching up to us. I’m very glad to see our numbers on the rebound, since I’d sort of expected it to take longer. Along these lines, [here](http://www.americanprogress.org/atf/cf/%7BE9245FE4-9A2B-43C7-A521-5D6FF2E06E03%7D/CANADA.PDF) is an interesting report fromthe new liberal think tank The Center for American Progress that compares job growth in the U.S. vs. Canada. (I started a thread on this last week [here](http://boards.straightdope.com/sdmb/showthread.php?t=253747).) Admittedly, such cross-country comparisons can be tricky, but at best it certainly makes it hard to argue that the last few years of Bush policies have been very good for job growth unless you want to explain why the divergence between the Canadian and American job growth numbers would have been much more dramatic in their absence. And, of course, as the study point out, these Bush policies were incredibly expensive in terms of what they have done to our long-term fiscal situation, whereas Canada has managed to get better job growth and not significantly worsened its fiscal situation. That’s the part that goes unstated in all this. I mean, if I go out and charge up to my $25,000 credit limit on my credit card, things are going to look pretty rosy here in the **jshore** household, but perhaps it would be worse asking if that is the wisest and most efficient use of resources. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [May 11, 2004, 3:15am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/68 "2004-05-11T03:15:12Z")
> [@jshore](#): > > …but perhaps it would be worse asking if that is the wisest and most efficient use of resources. worse = worth. Fun with homophones! Just for completeness, I should note that the sort of bill that we are talking about for the two tax cuts over ten years is something well north of $2 trillion, perhaps approaching $3 trillion (and that’s if the various sunsets are allowed to happen)… For money like that, we ought to accept nothing less than sustained fantasmagorical job growth!! ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [May 11, 2004, 3:25am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/69 "2004-05-11T03:25:57Z")
**jshore** : You sound like Warren “give me a trillion dollars and I’ll show you a good time too” Buffett. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [May 11, 2004, 3:30am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/70 "2004-05-11T03:30:57Z")
Okay, going a little post-crazy here, but [here](http://www.ctj.org/pdf/def0104.pdf) are some actual hard cost numbers for the tax cuts from Citizens for Tax Justice for the 13-year period from 2002 to 2014: $2.6 trillion if sunsets are allowed to happen + an **additional** $2.9 trillion if the sunsets are repealed, as Bush desires. **pantom** : Yeah, a trillion dollars here, a trillion dollars there, and, hey, maybe if we’re lucky we’ll even get a few million jobs out of the deal! ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [May 11, 2004, 4:04am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/71 "2004-05-11T04:04:33Z")
> [@manhattan](#): > > Heck, even prior to the later stimulus plan, and ignoring whether _any_ stimulus plan, tax or spending driven, had this or that effect, if someone told me at the beginning of 2002 that the economy would grow at 8.5+ percent in nominal terms and 5+% in real terms over the following two years and that the job market response would be bupkes, I’d have said that he’s nuts. Heck, even with the good job numbers in March, the first quarter _still_ saw productivity up 4.5 percent overall and up 5.9% in durable goods manufacturing, that home of the “good-paying” jobs (but see below). The GDP numbers may be more fantasy than reality. Have you seen this article? The Economist also ran a similar article a few weeks back. > [@](#): > > Businessweek > APRIL 5, 2004 > NEWS: ANALYSIS & COMMENTARY > GDP Growth: Are The Numbers Too Rosy? > Forget faulty jobs data. An overstated GDP may help explain the economic reality gap > [Bloomberg - Are you a robot?](http://www.businessweek.com/magazine/content/04_14/b3877044.htm) > [@manhattan](#): > > Finally, the pay division between service jobs and manufacturing jobs just doesn’t exist. Sure, an autoworker makes more than a burger flipper. But _broadly_, during April the average manufacturing job paid $15.24/hour, $16.08 after overtime. Service jobs as a group paid $15.17. Service jobs ex-retail and leisure (where the burger-flippers and clerks are) paid $17.25/hr. During the past several months, more than half the jobs created have been in those categories of service jobs which pay better than the median. There do continue to exist important (but shrinking) differences between the two categories in terms of pension plans and some other things, but sadly, those differences don’t seem to drive people’s near-term economic decisions and are fodder for an entirely different thread. As always, it depends on who is classified as working in what area. Perhaps there needs to be more granularity, say a distinction between “Regular Service” jobs (clerks, cashiers, etc.), “Medium Level Service” jobs (auto mechanics, etc.) and “Professional Service” jobs (doctors and such). Also union vs. non-union. I know some people in the local supermarket who are unionized. They start at $12 and change and go up to $18 and change with seniority. There is also a good deal of overtime opportunities where they get 1 1/2X or 2X hourly rate pay. Non-union people doing the same work, make a good deal less. And watch out if Bush and his “Economic Advisors” get to reclassify burger-flipping jobs as “manufacturing” jobs, as they were trying to do a few months back. That will lower the average manufacturing wage while making for a dramatic increase in the count of manufacturing jobs. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [May 11, 2004, 6:58am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/72 "2004-05-11T06:58:54Z")
**Reeder** said: > [@](#): > > Never confuse Sam Stone or Brutus with facts. > > Nothing good could come of it. Never confuse great debates for the pit. What is it with you people and your snide tempers? Just can’t have a discussion without working in the cheap shots, huh? Sucks to be you. And this comment about the ‘facts’ is hilariously applied to **elucidator** ’s post, in which he twists statistics by conveniently picking statistics from the best months for his case out of the past year and half in order to ‘prove’ me wrong on something that I said from the get-go was coming from memory and I wouldn’t swear by its accuracy. And which, in any case is irrelevant to the larger point, which is that the U.S. has very low unemployment by world standards. Whether there are four small countries or eight that had lower unemployment is pretty much meaningless. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [May 11, 2004, 7:01am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/73 "2004-05-11T07:01:51Z")
I meant **Jshore**. Elucidator is a fine individual who would never post such misleading data. ---
**Author:** ![Gorsnak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gorsnak/32/7587_2.png) [@Gorsnak](https://boards.straightdope.com/u/Gorsnak)\ **Post date:** [May 11, 2004, 2:09pm UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/74 "2004-05-11T14:09:47Z")
> [@Sam Stone](#): > > And which, in any case is irrelevant to the larger point, which is that the U.S. has very low unemployment by world standards. Whether there are four small countries or eight that had lower unemployment is pretty much meaningless. Well, perhaps, but your frequent point when posting comparative unemployment figures is that low unemployment rates are the result of lower taxes/freer markets/lower social spending. So when countries like Norway and The Netherlands start showing up in the ‘lower unemployment than the US’ category, it takes a lot of plausibility from your argument, especially when you frequently comment on how high European rates are. ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [May 12, 2004, 2:30am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/75 "2004-05-12T02:30:12Z")
> [@pantom](#): > > BTW, **manny** , I’d be real interested in all those topics you brought up on the previous page. I’m a sucker for new ideas on how the economy currently is operating, since there might be a way to make some money off it. I know, I owe, I owe. My apologies – my market had its short-term capitulation (at least it damn well _better_ have!) on Monday, so I’ve been busy shopping for bonds. I’ll try to get to it later this week if I decide it’s worth wading through the dreck being posted by some of the, uh, less informed people in this thread who have decided that each and every thread that tangentially relates to the economy is an excuse to throw out unsupported and stupid insults to their fellow members. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [May 12, 2004, 3:49am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/76 "2004-05-12T03:49:28Z")
**Gorsnak** said: > [@](#): > > Well, perhaps, but your frequent point when posting comparative unemployment figures is that low unemployment rates are the result of lower taxes/freer markets/lower social spending. So when countries like Norway and The Netherlands start showing up in the ‘lower unemployment than the US’ category, it takes a lot of plausibility from your argument, especially when you frequently comment on how high European rates are. I see. So if you can find a couple of counterexamples, this negates the whole notion that economies that have low taxes and regulation tend to outperform ones that don’t, is that right? But on the other side of the coin, the fact that the vast majority of countries that have higher taxes and more regulation than the U.S. also have significantly higher unemployment and lower growth rates, is data that should just be ignored. Is that it? ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [May 12, 2004, 4:00am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/77 "2004-05-12T04:00:15Z")
> [@Sam Stone](#): > > And this comment about the ‘facts’ is hilariously applied to **elucidator** ’s post, in which he twists statistics by conveniently picking statistics from the best months for his case out of the past year and half in order to ‘prove’ me wrong on something that I said from the get-go was coming from memory and I wouldn’t swear by its accuracy. And which, in any case is irrelevant to the larger point, which is that the U.S. has very low unemployment by world standards. Whether there are four small countries or eight that had lower unemployment is pretty much meaningless. Speaking of snide remarks, “conveniently picking statistics from the best months for his case out of the past year and half in order to ‘prove’ me wrong” is not only snide but is also a crock of B.S! **I chose the latest statistics available for each country. And, in fact, for all but one of the countries on the list I gave that have lower unemployment rates (which is not four or eight but 11 out of the 27 listed on that site), the rates were lower for all the dates available in the last half of 2003 through March 2004 (which is the last month listed)…The one exception is Australia. Furthermore, two additional countries, Denmark and Sweden had lower rates during a part of that period.** Look **Sam** , you pulled some claim out of thin air, like you often do, and you got called on it because it had a certain lack of basis in reality. I can understand you being testy given how often you have been wrong on so many different points over the past year or so on the SDMB, but I think you ought to try to give it a rest! Even **manhattan** is suggesting this. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [May 12, 2004, 4:02am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/78 "2004-05-12T04:02:56Z")
P.S. - And, if you actually identified the cherry-picking of data when it did occur…by the Bush Administration or by your conservatives sources…you wouldn’t get into trouble so much! ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [May 12, 2004, 4:19am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/79 "2004-05-12T04:19:40Z")
> [@Sam Stone](#): > > I see. So if you can find a couple of counterexamples, this negates the whole notion that economies that have low taxes and regulation tend to outperform ones that don’t, is that right? But on the other side of the coin, the fact that the vast majority of countries that have higher taxes and more regulation than the U.S. also have significantly higher unemployment and lower growth rates, is data that should just be ignored. Is that it? It seems that we have come up with a new definition of “vast majority” that applies when it applies to 15 of the 27 OECD countries. In fact, to even include 15 of them, one would also have to have a new definition of “significantly higher” since Denmark and Hungary’s March rate exceeded that of the U.S. by only 0.2 and 0.3%, and Sweden’s is currently 0.7% higher but was 0.6% lower last July. ---
**Author:** ![Gorsnak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gorsnak/32/7587_2.png) [@Gorsnak](https://boards.straightdope.com/u/Gorsnak)\ **Post date:** [May 12, 2004, 4:31am UTC](https://boards.straightdope.com/t/hows-the-economy-doing/244293/80 "2004-05-12T04:31:48Z")
> [@Sam Stone](#): > > I see. So if you can find a couple of counterexamples, this negates the whole notion that economies that have low taxes and regulation tend to outperform ones that don’t, is that right? But on the other side of the coin, the fact that the vast majority of countries that have higher taxes and more regulation than the U.S. also have significantly higher unemployment and lower growth rates, is data that should just be ignored. Is that it? Yes, I know. I’m being terribly unfair to you. I’m not making any grand claims, **Sam**. I’m just saying that the numbers you’re dismissing here aren’t as insignificant as you pretend. Seriously, when comparing unemployment numbers, you’ve pretty much got to stick to countries with comparable economies - so we’re talking the OECD countries, and if you look at the provided numbers, it seems reasonably obvious that the US is in the middle of the pack, and several leading the way with low unemployment are also leading the way in high taxes. Frankly, I again state my disclaimer that I’m not remotely convinced that unemployment rates are directly comparable due to differing methodologies in gathering and classifying data. But then, I’m not the one drawing conclusions from unemployment numbers, either - that would be you, and I think your conclusions are not very well supported by the evidence. [Previous page](https://boards.straightdope.com/t/hows-the-economy-doing/244293.md?page=3) [Next page](https://boards.straightdope.com/t/hows-the-economy-doing/244293.md?page=5)