I’m surprised none of the other conservative posters on the SDMB have pointed this out yet.
[Personal Opinion] I’ve long maintained that the economy is simply too cyclical for any one president to claim (or be blamed for) any one upturn or downturn. Apparently the economists in the linked article agree. Note that this is a genuine news story and not an Op-ed piece. [/Personal Opinion]
I’d like to hear what any legitimate economists that post to the SDMB have to say…
We have pointed it out. Then liberals retort that it’s still Bush’s fault because people were worried he was going to win. :rolleyes: Then the threads end up in the pit…
Booms happen, and busts happen. It’s how you respond to (a) them when they’re happening, and (b) the inevitability of an eventual bust.
In 2001, with the recession already underway, according to these economists, Bush & Co. were making economic projections assuming the boom would go on forever, and wiping out the entire national debt by the end of the decade. And selling the Biggest Tax Cut In History on the basis of those exceedingly rosy projections. Naw, no bust was ever gonna happen. Not to worry.
If it was already happening while they were BSing us, they lose even more points. Sorry.
And the Bushies’ policies may be exacerbating the bust, and adversely affecting our eventual recovery, according to this Washington Monthly piece.
These creative jobs, Richard Florida goes on to say, by and large happened in Blue America - in the creative enclaves from Seattle and Silicon Valley to Austin to the Tysons-Dulles corridor to Route 128 outside of Boston. And a significant part of what fueled the creative boom, he says, was a migration of talent from around the country and across the globe to these places.
Now, though, several things are happening, principally: (1) other countries are emulating what happened here; (2) both active post-9/11 immigration barriers and the nature of our foreign policy are turning bright immigrants away; and (3) the Bush administration is putting its money and effort behind the rusty economy of Red America, through the farm bill boondoggle to the steel tariffs to breaks for extractive industries.
I just read this article earlier today, so I’m not yet advocating Florida’s position. But I think it’s worth considering, and if he’s right, it’s directly relevant to this discussion.
During good times, George W. Bush advocated tax cuts.
During bad times, George W. Bush advocated tax cuts.
It doesn’t take a rocket scientist to realize something’s !#&@?&!'ed up with this approach.
hhmmm... you forgot overspending in both scenarios :)What, the Bush Depression instead? I’ll go with that.
Tax increases will NEVER stimulate an economy…period. It’s counter-intuitive to believe that they will. How can taking more money AWAY from people stimulate anything?? :rolleyes:
And “Depression?” Get REAL. I don’t see 70% of eligible workers out of jobs, man…
Let’s try to keep this realistic and avoid the hyperobole, ok?
And hey, for all of us armchair economists (me included)…unless we have the kind of clout behind us that the people in the link in the OP have, well, it’s all just OPINION.
We had one quarter of “recession” – after Sept. 11, 2001. The economy is roaring, except for employment and maufacturing. Those are lagging indicators. Are they lagging more than normal? If you are a Democrat or anti-globalist the answer is a resounding “YES!”
To continue a small digression…
Our economy blows away either the EU or Japan. The only economy that our economy does not stack up well against would be our own economy at another time or some underdeveloped nation going through industrialization.
On the actual topic, the economy is so complex and large that even a president has a negligible effect. Earthquakes, worker productivity, technology, consumer confidence, inflation, interest rates, and wars are more important. The president does have some control over the last one.
Because of how it is spent.
OK, if you promise to have a better grasp of government fiscal policy, its impact, and why it works (or why it doesn’t when it doesn’t).
I would tend to disagree with this. Sure, it is quite possible that a president won’t behave in ways that adversely affect the economy. But big deficits do affect the economy, do they not? Having a war does, as you admit. A president’s impact isn’t necessarily large, no, but there’s no reason why it can’t be, no?
I am going to kill the “show signature” as default box. I like my sig and all but I only intend to use it once every million threads or so.
Dramaticly increasing overall spending, without seeking revenue for this increased spending, is absolutely not fiscally responsible.
The president has direct control over the budget. Who is going to seriously argue that the budget (i.e. Government spending)has little or no effect on the national economy?
:rolleyes:
G.W. Bush’s economic legacy is going to be summarized in history as 1) spasmodic increases of the Federal budget deficit to the financial woe of subsequent generations and 2) fiscal policies which directly and gratuitously benefit exceedingly wealthy individuals and large corpoprations at the expensive of the needs of the vast majority of Americans.
Question to fiscal conservatives: if the current executive power is not remotely abiding by basic principles of fiscal responsibility, why the hell are you still supporting it?
Not true… the president and his policies affect many of these factors. Also remember that the market is also regulated by expectations. If people think the market will go up/down due to good/bad governance they will increase/reduce investments accordingly.
Worker Productivity - More labor taxes = less “productivity”
Technology - By barring stem cell research he might be taking the US out of the next generation of high tech industry.
Inflation - Large deficits means more borrowing which means more currency = more inflation. The current effect is a low dollar value. Might be good a bit for the economy… but in the longterm not so.
Interest Rates - Greenspan ? Again the president can affect this.
Wars - certainly.
Presidents might have varying degrees of influence… but certainly they do influence a lot the economy.
Those are two pretty big exceptions. And the “real unemployment” rate is approaching 10%. Not to mention the growing number of “underemployed” persons.
Hold on a sec… I’m all for a little chest-thumping, but have you not heard of Nokia? Ericsson? How about a little company called Airbus? There was an interesting article in one of my local papers (Seattle PI) recently about how Airbus alone is punching an ever greater hole in the US current account deficit.
And this is before stating the obvious about better health care systems, lower wage inequality (increasing again in the US), longer vacations – overall better quality of life. Hey, I’m a proud American too, and I’d like to start beating the Euros on some of these statisitcs. 
The conservatives making this argument are usually the same ones who swore Clinton’s tax hike would destroy life as we know it. Anyway, I agree that presidents have little effect in the short term. But Bush is clearly trying to create structural deficits that have long term implications – the baby boomers will soon start retiring, after all.
erislover,
Are you seriously contending that the gov’t would be more efficient than direct consumer spending? I’m going to stand by my statement that a tax increase absolutely cannot stimulate an economy - with the caveat that it can stimulate certain portions of a non-stagnant, non-recession economy. It simply cannot be true that taking, say, $400 from a consumer in taxes is going to be more efficient in gov’t hands at stimulating an economy than having said consumer spend that $400 directly back into the economy. Even the most efficient bureaucracies will have to get their “cut” of that $400, which means that there is less of the $400 to be put pack into the economy. If the consumer spends it directly at the hardware store, grocery store, private school, etc., etc., it will be much more efficacious, particularly at the local level, than it will ever be after being filtered through gov’t. Even if all the consumer does is save it at the bank, the bank will be more efficient at putting the money into the economy than the gov’t will.
Now, I’m not going to argue that large deficits are detrimental. Heck, debt is debt and it has to be repaid, but we need to keep something in mind: The current deficit is a projected deficit based on current levels of taxes, GDP, and a myriad of other factors. We should also keep in mind that the surpluses were also projected surpluses, based on those same factors. There was NEVER any REAL money stored away in a bank vault somewhere - and keep in mind that budgets created in '98, '99, and '00 were based on these “fictitious” numbers. It’s the same as saying, “I know I make $x/year, so I’m going to budget accordingly.” Nothing really wrong with that, but you don’t have the money yet. So, if you get laid off, become ill, or some other factor reduces your projected income, you will need to make an adjustment…
Gov’t has yet to learn this lesson…
To clarify:
Paragraph 1 was directed at erislover’s comments, paragraph 2 was a general response…
Ah, there’s your problem.
Conservatives forget about one thing in these discussions: there’s a lot of money sloshing around at the top. This was true even before Bush’s enormous tax cuts, which are tilted way towards the rich.
Your hypothetical $400 isn’t going to be consumer spending. Rich people can only spend so much. What they will do is invest, which only sometimes means what you’d like to believe. Most of the time, that simply means more dollars chasing the same basket of common stocks, driving their price way up, without creating any new wealth to trickle down, even if trickle-down was a viable economic approach. So the stock market does great.
So yeah, if the Feds use that $400 to build roads or improve national park facilities or whatever, that’s gonna help the economy more than it will help the economy for a rich person to up their holdings of GE by $400.
Huh??
Pardon me, but can you back this up? Because the rest of us are under the impression that the Clinton surpluses were real, as in the Federal government didn’t have to go out and add to the total of money that it was borrowing - very much unlike right now.
Well, even if the bureaucracy gets “a cut”, that means some pencil-pushing bureaucrat gets money and…guess what…he doesn’t burn it; he goes down to the grocery store and spends it too. Not that I am advocating large wasteful bureaucracies but conservatives do forget that spending is spending from an economic point of view and even inefficient bureaucrats spend. And, by the way, private investment can also be very inefficient or counterproductive…e.g., it can go into polluting the environment or it can be used for lots of mindless advertising that doesn’t impart any useful information but simply tries to make people think they will be more virile if they buy that big hunkin’ SUV and waste more of the earth’s resources.
That said, in a recession economy, tax cuts are generally stimulative because there is not a finite amount of money…i.e., they are injecting more money into the economy by running deficits. And, this is not a bad thing in the short run and certainly stimulative (at least as long as the economy is slack enough that interest rates aren’t pushed up significantly). [In this regard, increases in government spending to run a deficit have a similar stimulative effect and some might argue that to the extent that the current recovery has been helped at all by the President’s policies, it may be the spending as much or more than the tax cuts that are producing the stimulus.] Of course, the current President has put into place tax cuts that are incredibly expensive and continue to be so long after the economy has recovered. In other words, he is getting the minimum stimulus bang for the maximum buck.
In the latest issue of The American Prospect [Feb 2004], Nobel-prize winning economist Joseph Stiglitz has a good article on all of this stuff. It doesn’t appear to be online, but here is one quote from it:
In other words, economic cycles happen. But, it is not necessary to mortgage our entire fiscal future in order to mitigate their effects. As Stiglitz also notes,
Let’s face it…When historians look back at the Bush Administration, I think this will be one of the overarching themes, perhaps the main one: This Administration had various ideological agendas it wanted to pursue and then it used circumstances to provide wacky justifications for them. In addition to the tax cuts, other examples include the War on Iraq, the gifts to the fossil fuel industry justified in the name of energy independence and commonly called “the energy bill”, and the gifts to the logging industry in the name of stopping forest fireds commonly called the “Healthy Forests Initiative”.
It would make for a most excellent comedy if the consequences weren’t so freakin’ serious! So, alas, it is more of a tragedy.