Help with Economic Statistics: Need Ammo to Refute Recent 'Upturn" News

[Kathy in Cambridge]

Tonight I am going to some of my Repub-leaning inlaws. I know a political discussion will occur due to the recent economic news of an upturn. Fasest quarterly growth in 20 years? Well, I guess if you're growing from the absolute depths 20% still falls way below where the economy should be.

Can someone point to articles that refute recent glowing economic news or help me put together a cogent argument (aside from my own unemployment) which argues against recent news. Thanks!

Happy Holidays!
RR

[BlueEyedSon]

1. A few

Unemployment. And the reported figures do not include folks who have stopped looking.

The Dollar (vs euro for example). If you adjust for the decline in the dollar, the percent increase in the Dow is much closer to zero.

Consumer Confidence.

Todays durable goods orders.

The Federal deficit (the vigor of the economy is contrived, temporary and unsustainable, but the deficit will be with us for a loooong time).

You can look up the details.
http://www.google.com

[spooky3]

34. Durables dropped 3.1%; housing down, per WSJ

"Durable-goods orders fell a surprising 3.1% in November, the biggest drop in more than a year, as the factory sector's recovery faltered. Meanwhile, new-home sales fell 2.4% amid higher mortgage rates."

[Killarney]

2. Jobless recovery

Push the jobless recovery. Unemployment is still high. And if they say that unemployment just went down a bit, tell them they are wrong. When someone has used up all their unemployment, they fall off the statistic, yet they are still unemployed. So the stats are wrong.

Also, push the deficit. The largest deficit in the history of the US. And GWB started out with a surplus.

Push the fall of the dollar.

Also, you're right that growth means shit when you are growing from the bottom. Say, yeah, we had a quarter of growth but we need about 8 more quarters of the same unsustainable growth to get back to where we were when GWB took over.

Good luck. :)

[LuminousX]

3. Look at all the stimulus poured into the economy

Bush has poured gasoline on the fire of the economy, and of course it roars to life, but at what cost? Without appropriately stoking the fire, it will die out rather quickly. And that stimulus wasn't 'extra money', it wasn't the surplus, it was borrowed against future earning, which, if the fire isn't properly built, won't be there.

Right now we are in a job deficeit with no real signs of that turning around. For every open job, there are 3 unemployed people.

[napi21]

5. What kind of jobs?

The reports are that there were 300,000 jobs created. Well, I'd like to know what kind of jobs there were. Addition of service sector jobs, & Christmas retail jobs isn' even coming closee to reducing the unemployment of all the tech and mfg. jobs that were lost!

I also keep hearing reports of retail sales not doing too good. The increase appears to be at the very high end retailers (of course because they got all that $$ from the tax cuts), but the Kmarts, Walmarts, etc. keep saying things aren't so good.

I'll be surprised if you gain any ground with your Pub relatives though. Most Pubs won't listed to reason.

[Kathy in Cambridge]

6. Thankfully, it's only my brother-in-law

everyone else is Dem.

[0rganism]

32. Also, 300000 jobs over what time period? The last 2 quarters?

Jobs need to increase at about 150000/quarter just to keep up with population growth. 300000 in 2 quarters is barely keeping up, not real growth. Meanwhile, salary growth has dropped below inflation, and the number of "involuntary part-time workers" is up 1.6 million since the recession began.

cf http://www.epinet.org/content.cfm/webfeatures_econindicators_jobspict

[NewJeffCT]

4. I'm not economist

But, you can point to the fact that it is still a jobless recovery, holiday sales have been unimpressive as many working class and middle class folks are afraid to buy big tickets items as they are fearful of the future.

The biggest things, though, are the MASSIVE, record-setting deficit and the weak dollar... I think you can check www.bushtax.com for some info on the deficit and how it has effected the states. The weak dollar is also a big problem. Because of our massive, irresponsible deficit, nobody besides China wants to buy the US dollar. (The Chinese are buying because their "People's Money" is fixed to the dollar.) The cheap dollar makes our exports more competitively priced (except in China), but also raises the price of imports from other countries (Japan and Europe)and can lead to huge problems with inflation.

[napi21]

8. US Dollar vs Euro

My son is working in Sicily, and has been there for about a year. When he first got there, the Euro was = to the US Dollar. Now, everything there costs him 25% more. He is paid in US Dollars, but his rent, food, gas....everything you need to live day to day....costs 25% more.

I must admit, until he was complaining aobut the value of the $$, I didn't think about how many people this affects.

That's separate from the big problems it creates with international trade!

[Grover]

21. Don't use the Euro v. Dollar argument.

The dollar's decline against the Euro is a good thing for the US economy, and especially good for international trade. The EU is considering emergency measures to stop the rise in the Euro before it kills their already weak economic situations. Take any product that the EU exports. In real terms that product isn't WORTH 25% more than it was before. The EU manufacturers then have to cut their prices to reflect the out of control Euro, to keep their products moving. Right now they are facing a double edged sword in that the only real option they have right now is to flood the market with Euros to gain some control, but that will ultimately lead to the possibility of dramatic inflation.

Except for money traders, there is no positive for the EU with an ever increasing Euro.

[alfredo]

39. Could bush be letting the dollar fall to hurt the European economy?

He made it clear he was going to get even for them putting their own countries first.

[MrBenchley]

7. The best argument I know

is that the people who are saying the economy is growing also swore up and down there were WMDs in Iraq and that 9/11 happened without any warning...

[napi21]

10. WMD's

I agree, but I'm a little afraid to use that. I still think it's entirely possible for our Pubs to pland some, and then magicly find then next Oct.!

[NewJeffCT]

12. yes, another October surprise

Find them in late October so it is too late to fully investigate their legitimacy until say, mid-November.

[Atman]

9. Explain what Productivity is

This is the thing the Bushistas are touting as such a good thing. It is only good if you're the Bossman. In reality, it simply means fewer people are doing more work for less money. And more likely than ever before, those few jobs remaining have been shipped to India or China. Still American companies, just setting up shop in foreign lands, to help them increase their "productivity" in lands with minimal labor laws and ridiculously low wages.

Merry Christmas.

[napi21]

11. Productivity

Boy, is that right on!!!!!!!!!

No one seems to be able to admit, productivity is a good thing, as long as it isn't abused. This kind of attitude is the reason Unions came into being many years ago. I know they are courting Walmart, and if these abusers keep going, the Unions will rise again!

[wryter2000]

13. In latest

There are two headlines in LBN on the front page -- housing sales and orders for durable goods were unexpectedly down in November.

[William Seger]

14. Read Paul Krugman, "Looting the Future"

http://truthout.org/docs_03/120603I.shtml

"Everything we know suggests that Mr. Bush's people have given as little thought to running America after the election as they gave to running Iraq after the fall of Baghdad. And they will have no idea what to do when things fall apart."

[Cannikin]

15. What are the US's major exports these days?

I thought it used to be Jet liners, but thats fading fast. Whats left?

[William Seger]

20. I think Krugman was talking about agriculture exports

We still export a LOT of wheat, corn, soybeans, stuff like that. When Krugman mentioned dropping the steel tariffs to avoid retaliatory tariffs , I think he was mainly talking about Bush* needing to keep the agribusiness states.

[calimary]

38. Uh, I think that major export nowadays is - JOBS.

[NewJeffCT]

16. oh come on

Shreveport really did need that Hooters restaurant.

[zbdent]

17. Don't car dealers offer great end-of-year incentives just to move

things off inventory so that they can fix their taxes?

Also, don't forget, most auto dealers are doing the PR about how you can practically have a Hummer at half to no cost, well, if you have a great tax preparer who knows the right strings to pull.

Also, got to get rid of the stuff which didn't sell this year to make room for the stuff that won't sell in 2004 until the end-of-year incentives kick in again.

[IMayBeWrongBut]

31. Actually I seem to recall...

Bush* giving an executive order getting rid of the Federal tax on invetory. So no need for all those after Christmass sales, or year end car deals. I'm sure they will still advertise about a need to reduce inventory just to get people in the door. But that carpet store down the road has had a "going out of business sale" going on for the past few years. I suppose they eventually will go out of business.. ;)

[SharonAnn]

18. Today in Yahoo news. Important stuff in this article.

Housing starts down in November

Sales of durable good down in November.

These are two important indicators.
Pre-Christmas Economic News Not So Cheery
37 minutes ago Add Business - Reuters to My Yahoo!


By Glenn Somerville

WASHINGTON (Reuters) - A day before Christmas, the government reported some surprisingly bleak economic news as drops in orders for costly durable goods and in new-home sales cast a cloud across generally cheery expansion prospects.


New orders for long-lasting U.S. manufactured goods fell at the steepest rate in more than a year across a broad spectrum of categories, the Commerce Department (news - web sites) said on Wednesday.


In another report, the department said purchases of new single-family homes fell 2.4 percent to a seasonally adjusted 1.082 million unit annual rate last month. Analysts had been looking for an increase in home sales to a 1.120 million pace.

...
http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=1&u=/nm/20031224/bs_nm/economy_dc

[NewJeffCT]

19. released right before XMas

Many folks will be getting out early, rushing home to spend time with family or on the road to visit relatives... so, nobody will notice.

[Grover]

22. Try other issues.

I would be very cautious about trying to prove an idealogical point right now with the economy. Here we are three years into a recession, and things are picking up. Even if you take away the external economic stimulus, just the natural course of the business cycle tells us that everything is in place for a good recovery in the coming months/year.

If you make an argument that will likely be proven incorrect in the next few months, then ultimately you have hurt your standing, at least politically speaking with the inlaws.

[Kathy in Cambridge]

23. It's only one in-law and he can take the heat

because so much else is wrong with Bish's policies it's laughable to think the economy is turning up in the slightest. Up from bottom is not that high. As a poster mentioned, it would take eight consecutive quarters of 20% growth to reach the the economy Dubya inherited in 2001. That just ain't gonna happen, Grover.

[T Roosevelt]

33. You seem to have missed the points made in this thread

The economy is NOT picking up:
- net job loss
- high-paying jobs going overseas
- jobs created now are low-paying service jobs
- dollar falling
- deficit increasing
- productivity just means fewer people making less money producing the same (most likely) or more (doubtful in this economy) stuff
- approaching a housing bubble
- bankruptcies are up
- refinancings down
- national and personal debt increasing
- current account deficit (CAD) increasing (though the falling dollar will help this)
- inflation on the rise (disregard the pundits - check the facts)
- insider selling is up (bad news for corporate earnings)
- higher stock prices reflect falling dollar
- foreign investments are leaving the country (bad news for CAD - means foreigners are losing faith in the dollar and no longer funding our deficits)

There are other things that I haven't listed here...but hopefully I've made my point. The economy is not reflected by the DOW.

[camero]

24. i started a thread on it.

I should have looked yours up before doing mine. but the link is on it. It offers a good argument about just what is being done with "your money."

[Kathy in Cambridge]

25. I saw that, camero. Good Article!

I printed it out to have handy for this evening! ;-)

[camero]

26. cool

it completely takes thier argument away.. almost. thanks for lookin.

[durutti]

27. Here's what Doug Henwood (of Left Business Observer and The Nation) said:

'Don't put much faith in projections for next year. But the recent
growth spurt got a lot of its juice from the combination of lower
taxes and higher military spending. In the case of the tax cuts, the
rebate checks were probably quite important, given the late
summer/early fall spurt in retail sales, which is now fading. Unlike
2001, when people mostly saved their rebate checks (or used them to
pay down debts), the latest round were mostly spent it seems. The
other major source of stimulus has been various forms of home equity
withdrawals - esp new borrowing against appreciated values when a
mortgage is refinanced ("cash-out refis," they call 'em) - which have added some $600 billion to consumer demand this year. The fading in retail sales over the last several months is probably the result of the fading of those two stimuli - the rebate checks are all spent and refi has mostly run its course, and with job growth weak and real wage growth at 0, labor income isn't up to the task.

'With deficits as large as these it's no surprise the economy's been
stimulated, but it's taken quite a long time and the growth rates are hardly overwhelming, testimony to the inefficiency of the stimulus, because of its upper-bracket skew. Tax cuts for millionaires and Halliburton contracts (the biggest component of military spending in the second quarter, which saw the biggest spurt in Pentagon spending since the beginning of the Korean War, was "support services," i.e., transport, setting up bases, fixing turkey dinners) just don't pack the punch that higher unemployment benefits or infrastructure spending would.'

[durutti]

28. Some Points

1. The business cycle is an intrinsic part of any capitalist economy. A recovery was bound to happen some time, independent of any government action.

2. Presidents generally have little to do with economic growth. The Federal Reserve has more to do with it, and even their influence is overrated.

3. Historically, there is no real correlation between tax cuts and growth. Countries with higher taxes are growing faster economically than the U.S., and the U.S. economy grew fastest when taxes were much higher.

4. Tax cuts generally don't work for a number of reasons. First and foremost, they tend (especially in recent years) to favor the wealthy. But the wealthy already have all the spending money they can use. Statistically, the wealthier you are, the more likely you are to save money. To stimulate the economy, you need to increase demand by giving money to people who will spend it -- the lower- and middle-classes. Secondly, tax cuts tend to result in money being taken out of public services -- meaning that people will have to pay for them out of their own pockets, in effect eating into the already too-small tax cuts of many Americans.

5. It would be incorrect to say that the Bush tax cut (or Reagan tax cuts, for that matter) had *no* stimulating effect. They did, to some extent. They gave some money to select sections of the middle class. Practically any tax cut would have *some* effect on demand.

6. However, last quarter's growth was also a result of other factors: the mortgage refinancing boom, low interest rates, military spending, and the narrowing trade deficit. Thus, to some extent, the factors which almost always prevent tax cuts from being an effective stimulus were mitigated.

7. Also, economies tend to rebound with high growth after long periods of stagnation.

8. It's common sense, really -- the first two tax cuts didn't work. It's not at all logical to assume, then, that this last rebound was a result of the tax cuts primarily.

9. Also, while it appears that a genuine rebound may be around the corner, there are a few troubling signs -- in particular, the lack of growth in real wages and the weakening of the dollar.

10. Over the long term, Bush will have done quite a bit of damage to the economy. Under his watch, we've had that terrible prescription drug bill, increasing homelessness and malnutrition, more people without insurance, no increase in real wages, an increase in inequality, risings costs of rent, and incredible levels of national debt.

11. In conclusion, last quarter's growth would have been greater (and the recovery more certain) had the government opted to increase unemployment benefits and spending on infrastructure. Lower- and middle-class tax cuts or one-time bonuses might also have been in order.

[Kathy in Cambridge]

29. Thanks for the post-very helpful!

[0rganism]

30. Print out a few copies of this damning article from the EPI

http://www.epinet.org/briefingpapers/146/epi_bp146.pdf

This describes just how shitty the current employment numbers are. Between the recession and rampant offshoring, we're in deep water now.

Ask your favorite repuke relative how much good a 10,000 DOW does for anyone who can't get a job.

[Yupster]

35. My advice

try not to fight about politics at Christmas. Can't you tell your in-laws all the cool things their grand-kids are doing?

[Kathy in Cambridge]

36. It went fine tonight. We always talk politics

and it's civilized. Besides the nieces, nephews and grandkids learn the art of civil, intelligent discourse.

[FUDU]

37. The economy only benefits the rich

The poor always get screwed no matter what. Put that in their pipe and smoke it.

[jbm]

40. Maeve posted this link on the stock market watch thread today...

http://www.washingtonpost.com/wp-dyn/articles/A26303-2003Dec23.html

<snip>
And there are some indices that make even the productivity increases pale by comparison. Corporations have been having a bang-up recovery all along, it turns out; they are about to experience their seventh straight quarter of profit growth. The operating earnings of the 500 companies on the Standard and Poor's index, researchers at Thomas First Call in Boston estimate, will rise by 21.9 percent over last year. Who could ask for anything more?

Well, the American people, for one. Since July the average hourly wage increase for the 85 million Americans who work in non-supervisory jobs in offices and factories is a flat 3 cents. Wages are up just 2.1 percent since November 2002 -- the slowest wage growth we've experienced in 40 years. Economists at the Economic Policy Institute have been comparing recoveries of late, looking into the growth in corporate-sector income in each of the nine recoveries the United States has gone through since the end of World War II. In the preceding eight, the share of the corporate income growth going to profits averaged 26 percent, and never exceeded 32 percent. In the current recovery, however, profits come to 46 percent of the corporations' additional income.

<snip>

I heard someone use the term 'transfer of wealth' to describe the GW Bush economy. They were exactly right!

[w4rma]

41. Here is a very, IMHO, clearly explained editorial explaining the situation

Economy on the rebound?

By John Atcheson
Originally published December 24, 2003

WASHINGTON - Before America allows President Bush to take bows on the economy, let's take a closer look at this recovery. A simple thought experiment will help.
Imagine for a moment that you took all your credit cards and maxed them out. Now take your mortgage and borrow the maximum on it. Cash in the kid's college fund, your rainy day savings, your 401(k) retirement savings. While you're at it, stop paying for your health insurance and the maintenance on your house, your car and your yard. Now take all that money and spend it. Feeling pretty flush? Sure you are. You just pumped tens, maybe hundreds of thousands of dollars into your pocket.

But you'd never do that.

Because you know that just because you'd be living large for the time being, you wouldn't be wealthier. In fact, you'd be getting poorer by the minute. And yet, that's exactly what Mr. Bush's recovery is - a giant borrowing binge. But he'd rather you didn't know that. In February, the administration buried a report from its own Treasury Department that said our current fiscal policies, the ones Mr. Bush likes to claim are bringing on a "recovery," would create more than $44 trillion in chronic debt.

As the London Financial Times noted, $44 trillion is roughly equivalent to 10 times the publicly held national debt, four years of U.S. economic output or more than 94 percent of all U.S. household assets. No wonder things seem good. We've cashed in everything we own at the Bush Pawn Shop, and now we're flashing a serious wad of walkin' around money.

The Democrats like to point out that we're still down some 2.5 million jobs since Mr. Bush took over and that, absent a miracle, Mr. Bush is likely to be the first president since Herbert Hoover to have fewer jobs at the end of his administration than when he took over. But the real story is, how can we not be living even larger, after borrowing all our children's assets and shrinking the Federal Reserve rate to the lowest level since 1958? What have we got to show for it?
…
http://www.sunspot.net/news/opinion/oped/bal-op.badeconomy24dec24,0,3292091.story?coll=bal-oped-headlines
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=956993