Excellent. I’m thrilled for it. The DIJA must be very proud to be a leading indicator. In the meantime my company, a fortune 100 company, is expected to announce plans to ship a decent number of IT jobs overseas in 60 to 90 days. I figure as long as we’re throwing out one-dimensional views of the economy as if they proved anything I’d participate, just for giggles. The comment on the Dow having tanked was intended as a reminder not to place too much faith in any single indicator. Shares of my company’s stock will no doubt rise after the announcement of cost reduction by shipping jobs overseas. That will raise the DIJA a bit, but it will impact the jobs, which most people care about far more than the DIJA, of a decent number of my co-workers.
Most of Krugman’s analysis was based on the Labor Market, again a single dimension of the economy, albeit a very important one from a human perspective. I’d take it with the same grain of salt I’d take analysis based on the DJIA. It makes for a very charged opinion piece, but when we distill it down to bare economic analysis, which Krugman is quite good at, we come to the statement that 2.4% growth is not enough to revitalize the labor market. Various people claim this growth number will change in various directions at various rates, but as of right now Krugman is right on target.
All the talk of various types of indicators and leading and trailing indicators and such is all well and good, but at the end of the day, where the buck stops is the labor market. Right now it is stagnant and has a large number of long-term unemployed people. The future of the job market isn’t clear either, short or long term. That’s really the bottom line. The squiggly line of the DJIA is but one factor, it certainly isn’t the bottom line. For most people when they talk about the economy, they mean the job market. Ultimately it is what matters. The buck stops there.
I got that impression because I leveled that criticism against your first use of the Dow Jones as an indicator of the state of the economy (which you claimed at that time had increased due to people being pleased with the success of the invasion of Iraq). Unless I have missed it, you did not respond, but instead returned to further argue for the Dow Jones as an indicator of the economic recovery. From this, I took it that you did not find merit in my point.
If you feel that people are putting more money into the market because of Bush’s dividend tax cut, how can you also take this as an indicator of recovery? Perhaps you can theorize that it is going to be ultimately causal in the future recovery, but this is different than suggesting that the present increase reflects current economic recovery.
I didn’t use the Dow because for some reason the Yahoo chart didn’t go back that far. They have now fixed it, and it shows a similar pattern as the Nasdaq. There was a trough at about 7300 in early October, 2002 and a peak at 8900 late in the following month – a rise of 21%.
The Dow Jones growth to today based on late Nov. 2002 was 5%. The growth based on early October was 26%. If we chose a base point half way between the trough the peak, the growth to today would have been 15% – a very good number.
Fear Itself: Why did you select the particular date of Nov. 27, 2002 as a base to compare the current Dow Jones average to? Were you quoting someone else? Is it possible that you were quoting a partisan who might have chosen an unrepresenative comparison?
Hentor the Barbarian, thanks for the explanation. You have a good point. The dividend tax cut increased the after-tax return on stocks and so made stocks more valuable. Therefore the stock market rose. You are asking if this sort of rise predicts the future economy as well as a rise based on true economic factors.
That’s a subtle economic question. Bear in mind that the dividend tax cut encouraged business expansion and investment by increasing after-tax return. Also, a rising stock market makes people wealthier (on paper) and so leads to greater spending. So it tends to boost the economy. For these reasons, I think the rising stock market is a valid economic predictor, even though it was caused (in part) by a change in the tax structure.
I can see why you might jump to that conclusion december, but I am not a blog slave who depends on others to form my opinions. I looked at the data, and found that date was when the Dow, which was in a modest recovery, took a four month dive due to the unecessary and fraudulent warmongering by George Bush. My conclusions are my own, a policy you might consider.
Sam, I do not have a personal problem with you. My problem is with your consistently dishonest debating “style”. Examples of it are best nipped right in the bud, right in the threads in which you engage in it, lest third parties actually think more of them than is deserved. You do not get pitted because it wouldn’t help you use any more honest a style - if it won’t have an effect on you here, it won’t elsewhere. Do not take that little fact as validation of your views or “style”.
I certainly do have a problem with these things, though (and it isn’t just me, as you well know):
Your consistently filtering facts to support your preconceptions (and not only politically-partisan bashing, of which there is ample evidence that you refuse to consider). Evidence in this thread alone is using only that economic data that supports the contention that Bush is doing a great job with the economy. Example in this thread: The constant loss of jobs during this administration. But those economists you select for being just as ideologically bound as you must be right, yessirree.
Your constant misrepresentations and dismissals of positions that don’t agree with your own, as evidenced by your own inability to even restate them in your own words. That’s been pointed out to you, and not just by me, on a number of occasions. In this thread, refusal to get into what employment numbers mean below the surface.
Your use of the very same tactics that you denigrate when they produce views that disagree with your own. Example in this thread: Using one of your own anecdotes as an example of Truth, while refusing to consider real-world examples of so many others, and in snide terms as well.
Your frequent (but not down the line) refusal to offer to reconsider any point, or even admit you might have been wrong, when facts are shoved in your face, but simply to walk away or do the below:
And, last but certainly not least, your predilection for personalizing every disagreement everyone may have with you. Your facts and reasoning are never the target, no - any time you get called wrong, it’s always a personal attack, isn’t it? A fine method that is for excusing yourself from actually considering that you don’t know everything, and that some of what you do know is wrong. One must always keep that in mind. Example in this thread: Your complaint about me having a personal problem with you because of an example of my exposing your dishonest methods.
I hope this post clarifies that such is not the case - you may well be a peach of a guy in person, but you just do not wish to debate constructively. You certainly could, and that’s why you get engaged instead of dismissed the way the shriller partisans do, but for some reason you’d rather simply stick with the partisan stuff. It would be interesting to know why, but frankly the Fight Against Ignorance takes precedence.
Now, back to the real world, where real people live and struggle, and whose own experience means more to them than that of RW-think-tank economists on neocon blogs …
[Mods, if this is out of line, please let me know. My apologies - this is in response to a post directed to me, though.]
C’mon, Sam, try reading the posts on this thread with some comprehension. Every stat that’s been tossed out has been revised, reinterpreted, reimagined and gneerally reworked to fint various viewpoints. The only difference is, when the mass media spews the same statistical crap there’s generally no one around to call them on it.
That is a classic example of just WHY you need a scientific method. You would have made a good barber, ca 1400. **
[/QUOTE]
If I am a 15th century barber, you’re an ancient Greek – one Procrustes. And ideas tht don’t fit your right wing philosopy get fitted to your Procrustean bed and lopped into shape.
Elvis: Whatever. You keep levelling the charges, and whenever I call you on it you either back off, ignore me, or admit you were wrong.
Evil Captor said:
I’m not talking about ‘the media’. I’m talking about the considered opinions of the economists who make their living forecasting the economy. This isn’t spin. The numbers are available for anyone to look at. They are standard indicators of economic performance. Things like inventory levels, housing starts, consumer confidence, business investment, new jobless claims, etc. Most of them are pointing up. The prediction of 3.6% growth isn’t a number cobbled up by some pundit with an axe to grind. It’s the median value of a survey of economists who are paid to know this stuff, and which businesses and governments rely on to make decisions. YOU don’t like that result, because it doesn’t fit the spin YOU want to place on the economy. Well, tough darts. Them’s the facts.
C’mon, Sam, everybody knows those “professional” economists miss the boat more often than they hit it. You’d do just about as well going to people who read tea leaves … or throwing darts … tough darts.
I’m sorry Evil Captor, I just can’t swallow such a blanket statement without some kind of proof. Professional economists are wrong more often than not? Prove it.
I’m going to attempt a quick note here.
This is a december thread, so I know what the underlying point of it is. However, you’ve got to be brutally objective when looking at this, for your own personal well-being. Points to consider:
Given the jump in productivity and the accelerating trend to outsourcing, anything less than robust growth (probably 4%+, but IANAE) isn’t going to do much good in bringing down the jobless rate. There is a better than even chance of achieving such a growth rate in the next few quarters because of the most reliable economic cycle there is: the Presidential election cycle. (no, I’m not kidding) This is what the stock market is seeing, IMO.
Time is also on the side of the economy getting better. It’s been a long time since the bubble burst, and the excesses have pretty much been wrung out. Corporate earnings have also improved considerably, as has the quality of the reporting of those earnings. IMO, but I’ve got real money riding on that supposition.
Once the election is over, the economy will probably slump again, because the long-term problem with manufacturing jobs and service jobs being exported while our trading partners find it in their interest to keep the dollar from cratering will continue. There will be an increasing chance of a dollar crisis as the decade wears on, but it won’t get to better than even odds, I don’t think. Just something to keep an eye on. It’s one of those weird things that could happen at any moment, like a blackout, although I do think the odds are better of a dollar crisis than another blackout like the one we just had.
Ignore the ideologues. Keep it objective.
Sorry, Sam, I don’t think I need to jump your hurdle to make my point to anyone but you. It’s a widely held belief that economists that they are not a particularly reliable group when it comes to predictions. Just go to Google and type in the following terms:
economic predictions inaccurate
Should be enough to convince any reasonable person that I am totally and completely on the correct side of this argument, since most of the first page of hits consists of economists talking about why their predictions are inaccurate.
Even if everything you say turns out to be accurate, the economy could still be bad for those of us who work rather than invest for a living, even if it’s good for corporations and their shareholders. A jobless recovery is no recovery, for most of us.
Google?! You’re kidding right? I just punched in physicists inaccurate predictions and got a slew of hits. Does that mean that physicists are usually incorrect? Relying on the contents of the first page of links returned by Google is like sticking your hand into a dump truck size pile of newspapers and then reading the op-ed sections clenched in your fist. It proves exactly nothing.
[Ghostbusters: Dean Yeager]
Your theories are the worst kind of popular tripe, your methods are sloppy and your conclusions are highly questionable.
[/Ghosbusters: Dean Yeager]
C’mon Evil Captor, if you can’t do better than that just admit that you made an unsupportable statement and retract it.
Evil Captor: agreed, but as I said, the chances are good that jobs will be coming down the pike soon, because the election is coming. After the election things will probably get dicey again, but it’s a rare Prez who can’t get the economy to gift him with at least some jobs during election season.
Look at it this way: Greenspan has already said he’s willing to keep rates low for as long as it takes. Translated, that means he’s not touching rates until after the election, regardless of what happens to the economy between now & then. He knows which side his bread is buttered on.
Actually Greenspan was openly criticizing Bush’s tax cuts as Bush was appointing him for another term.
It is a rare president who can’t get the economy to gift him with jobs during election season, but Bush is probably exactly that. He is after all the first president since Hoover to have a negative job creation rate.
New Jobless Claims: 386,000 (down from 456,000 last time)
Retail Sales: Up 1.4% (up .9% last time)
Q2 GDP: 2.4% (estimate was 1.9%)
ISM Index (Manufacturing Growth): 51.8 (up from 49.8)
Factory orders: up 1.7% (up .9% last time)
Unemployment rate: 6.2% (down from 6.4% last quarter)
Housing starts: 1.803 million (up from 1.73 million).
In fact, the only leading economic indicator that went down was consumer confidence, from 83.5 to 78.3. But note that before the Iraq war is was at something like 59%.
This is not an ‘election bounce’, or spin, or anything else. It’s hard data showing that economic activity is picking up, jobless claims are decreasing. It’s interesting that these numbers are even better than economists were predicting a month ago.
This is not a positive statistic. All it proves is that the economy isn’t tanking as fast as it used to; kind of like the poor housewife who says her husband doesn’t beat her as much as he used to. Plus, new claims are down because the government doesn’t count the unemployed whose benefits have run out, or the ones who are so discouraged, they are no longer even looking for work. Some recovery.
Wrong stat, sparky. These aren’t total unemployed. They are NEW jobless claims. As in, people who first filed for unemployment. Thus, ‘discouraged workers’ aren’t part of the measurement.
Even in the best economy, there are new jobless claims. People get laid off all around the country, all the time. And note that it has to be a negative number. So the question is, ‘how many jobless claims would you expect in a healthy economy’? A small enough number means it’s just the typical ebb and flow of a healthy job market. Too big a number is a sign of mass layoffs, industries collapsing, etc. The ‘magic number’ that indicates a healthy economy is 400,000. That number is now below 400,000.