Editore"s Note
Tilting at Windmills

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January 2, 2006

TAKING 'STOCK'....In February 2004, Labor Secretary Elaine Chao was on CNN defending the Bush administration's economic policies. When Judy Woodruff noted the president's poor record on job creation, Chao suggested there's only one number that matters.

Woodruff: I want to cite the one economic analyst with Credit Suisse First Boston. He said, these are his words, quote, "very disappointing; we're not getting the jobs to replace the stimulus in the economy which will fade once the first quarter ends." Another economist said, "It's the weakest job-creation rate relative to economic growth on record."

Chao: Well, the stock market is, after all, the final arbiter.

In retrospect, Chao may have wanted to pick a different standard of measurement, because if the stock market is "the final arbiter," Bush has some explaining to do. The Dow ended 2005 lower than when it started 12 months ago.

In fact, while it was the 0.6% decline for the year that generated headlines, most seem to have overlooked the fact that on the day Bush was sworn into office in January 2001, the Dow Jones stood at 10,732.46. As of now, it's at 10,717.50.

In other words, after five years of Bush's presidency, the stock market has a cumulative gain of negative 15 points.

Under Reagan, the Dow went up 148%. Under Clinton, it grew 187%. After five years, Bush isn't quite breaking even.

Sure, Republican administrations have consistently under-performed Democratic administrations on stock market growth, but who would have guessed that nearly five years after Bush took office, the Dow wouldn't have grown at all?

Steve Benen 11:12 AM Permalink | Trackbacks | Comments (138)

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Comments

Unintentionally revealing. This probably can be applied to all Bush Administration policies. 2000+ Americans dead in Iraq? What sayeth the stock market?

Posted by: Pat on January 2, 2006 at 11:15 AM | PERMALINK

Oh, and by the way: Frist.

Posted by: Pat on January 2, 2006 at 11:16 AM | PERMALINK

So, who's making the money?

Median income is down. The DOW is flat. GNP is up. Who is making the money? Where's it going?

Posted by: Jeffrey Davis on January 2, 2006 at 11:19 AM | PERMALINK

Good comment, Jeffrey. Lets see whether the Republican trolls who were arguing the other day for increased wages for US workers as a way to stem the tide of illegal immigration will stick to their principles. I'm no fan of their argument on immigration, but suspect they discover the need for a better deal for workers in the US only when it suits their rhetorical needs.

Posted by: Friend of Labor on January 2, 2006 at 11:24 AM | PERMALINK

You just hae America. Why only last week I heard at least two different right wing radio host proclaim this is the "greatest ecomony EVER!" And they wouldn't lie to us.

Posted by: Martin on January 2, 2006 at 11:25 AM | PERMALINK

Sorta like the FAUX Special on Iraq yesterday showing that "we" are winning because they have a stock market functioning.

Posted by: thethirdPaul on January 2, 2006 at 11:25 AM | PERMALINK

That wasn't really a "comment". It's a real question. Who is making the money? I suspect, but since I'm not an accountant or economist don't know where to look, that our foreign investors and debt holders are taking the excess out of the country. That's one thing that happens when you spend more than you make.

Posted by: Jeffrey Davis on January 2, 2006 at 11:28 AM | PERMALINK

I guess it's a sign of the times, but here's the bigger significance missed in this:

The Secretary of LABOR declares that the final arbiter is the Dow.

Posted by: flike on January 2, 2006 at 11:31 AM | PERMALINK

Uh, Steve, we are nation UNDER ATTACK and have been since Sept 11. 2001.

It's funny how often liberals forget that.

Posted by: Al on January 2, 2006 at 11:35 AM | PERMALINK

Let me add my own speculation to this.

I think the success of the stock market under Dems should be called the "trickle up" phenomenon -- one that, unlike the "trickle down" theory, actually seems to work, likely demonstrably.

Because Dems try to run the country for the entirety of the populace, the US workforce in general -- the true engine of productivity and creativity in the economy -- actually generates more wealth for everybody, including the rich.

Which, I suspect, is why the stock market goes up so much more impressively under Democrats.

Posted by: frankly0 on January 2, 2006 at 11:35 AM | PERMALINK

Is there any calculation for inflation built into the index? If not, wouldn't the Dow need to go up by a percentage equivalent to at least the rate of inflation for the year in order to break even?

Posted by: Michael Ditto on January 2, 2006 at 11:36 AM | PERMALINK

This comes as a suprise?
Why does every hard core republican
insist that the economy is better?
What deluded neocon are they getting
there numbers from?
I simply do not understand how can
people be this blind.
No matter how many times you say it.
Saying it does not make it true.

Posted by: Honey P on January 2, 2006 at 11:42 AM | PERMALINK

Michael Ditto,

Unfair to post here making sense.

I remember it well when Larry Krudlow and Jim Cramer wanted us to invade Iraq in order to help the stock market. They said that it would stabilize the market. So I guess we check the DOW the day of the attack and the Dow now to understand whether we are winning.

Posted by: thethirdPaul on January 2, 2006 at 11:42 AM | PERMALINK

Oh yeah, who gives a shit if people are working, so long as the investors (read: wealthy) are making money. Eventually they'll pissing a little trickle down to the rest of us. It's not like 2/3 of our economy is driven by regular American consumers or anything. In fact, yacht sales are the key indicator of how well the economy is doing.

Shorter Chao: let them eat cake.

Posted by: NTodd on January 2, 2006 at 11:51 AM | PERMALINK

I offer some points to consider:

-85% of the gains in the DOW during Clinton's first term came AFTER the Republicans took control of congress, which spanned only 25% of his first term.

-James Carville stated before the DOW took off that stocks were for rich people (actually, he said "fat cats" and so Clinton's administration would not be concerned with the DOW.)

-The post by Mr. Bennen quotes Ms. Chao quite sparingly. One would have to see more of the actual interview to pass judgement on her remarks.

-While the DOW has been weak, almost all of the other factors indicating economic success have been positive, including NET income growth. Tax cuts, anyone?

-Federal revenues collected for 2005 will be at an all time high. Tax cuts anyone.

-The real economic boom (and it was a bona fide boom, make no mistake about it) during Clinton's second term came after Clinton, though kicking and screaming, agreed to Republican capital gains tax reform.

-The September 11 attacks virtually bankrupt the airline and travel industries. The former has not and may never recover.

Other than those factors, I guess the Bush record on the economy pails compared to Clintons. The unemployment rate has fallen to 5%, but any democrat can tell you, THEY'RE ALL BAD JOBS.

No wonder Clinton had time to get his dick sucked in the oval office...

Posted by: The Machete' of Truth on January 2, 2006 at 11:53 AM | PERMALINK

Larry Krudlow and Jim Cramer wanted us to invade Iraq in order to help the stock market. They said that it would stabilize the market.

The market certainly is stable: it hasn't moved anywhere!

Posted by: NTodd on January 2, 2006 at 11:53 AM | PERMALINK

Chao thinks "the stock market is, after all, the final arbiter" because that's where she gets her income. Woodruff should have asked Chao how many corporate boards she sits on and how much she makes from them.

Posted by: Hedley Lamarr on January 2, 2006 at 11:54 AM | PERMALINK

I offer some points to consider:

Tell ya what, offer some citations, and maybe I'll consider your points.

Posted by: NTodd on January 2, 2006 at 11:54 AM | PERMALINK

Actually, Jeffery asks a very good question. Where exactly IS the money going?

It's not going in dividends, which are still shrinking as they have been for the last 20 years. It's not going into venture capital money, which fueled the economic boom of the 90's. It's not going into consolidation and stock purchasing, as stock prices are flat.

Corporate pay can't account for it all. It's about a covering of the bottom of the bucket really.

Where's it going? And why?

Posted by: Karmakin on January 2, 2006 at 11:54 AM | PERMALINK

Dow industrials close, Dec. 8, 1941: 112.52
Dow industrials at end of year, 1945: 192.91

I leave it to the readers to draw their own conclusions.

Posted by: bobbyp on January 2, 2006 at 11:56 AM | PERMALINK

Who is making the money?

Left-handed relief pitchers.

Seriously, who knows? I don't. I wish I did.

I'm concerned that there's this odd nexus of "bad things" as a result of this country's economic priorities. Housing, medical, and energy are increasing out of proportion with the rest of the economy and wages are stagnating - or decreasing - and now investing is more like gambling than ever before.

Posted by: ChrisS on January 2, 2006 at 11:56 AM | PERMALINK

Larry Kudlow and Jim Cramer wanted us to invade Iraq to help the stock market?

I defy anyone to document that.

Posted by: The Machete' of Truth on January 2, 2006 at 11:57 AM | PERMALINK

Fairly dull machete.

Posted by: Pat on January 2, 2006 at 11:57 AM | PERMALINK

The fault is the investors'. If they had used the data-mining option of the SolidWorks7.0 to make their investment decisions, as I did, they would have made profits of over 235% over the last five years as I have.

Posted by: tbrosz on January 2, 2006 at 11:57 AM | PERMALINK

In a global, interconnected economy, how is any securities index a reliable indicator of the well-being of Americans? GDP doesn't tell you much about average Americans, either, but it's a lot better than any equities index. "Let them eat cake" was a sophisticated macro-economic take compared to Chao's remark.

The Bush people aren't stupid; or, if they're so stupid, why are they in charge of the free world? But intellectually, they are simply not presentable. You can't take them anywhere.

Posted by: kth on January 2, 2006 at 12:00 PM | PERMALINK

flike beat me to it: we have the Secretary of Labor touting the Dow as the ultimate indicator of how well our economy's working.

To paraphrase a headline from 30 years ago:

Chao to working people: drop dead.

Posted by: RT on January 2, 2006 at 12:01 PM | PERMALINK

NTODD:

Tell you what, get on your Google horse and look the stuff up youself. That's what I did.

Posted by: The Machete' on January 2, 2006 at 12:01 PM | PERMALINK

Tell you what, get on your Google horse and look the stuff up youself. That's what I did.

No. You make the assertions, you back them up. I'm not doing your homework for you. You Googled them? You know exactly where the citations are, then. Otherwise, you're a fucking liar.

Posted by: NTodd on January 2, 2006 at 12:05 PM | PERMALINK

Your claim is false, tbrosz.

Posted by: bobbyp on January 2, 2006 at 12:05 PM | PERMALINK

Well, Pen Knife, go back to CNBC and get the transcripts of Kudlow and Cramer prior to the invasion. That is exactly what both of them said. Also, check where the "Democratic" Cramer referred to Dickless Cheney as a "Great Patriot".

Posted by: thethirdPaul on January 2, 2006 at 12:07 PM | PERMALINK

Your claim is false, tbrosz.

While that's usually a pretty accurate assessment of tbrosz, assertions, in this case, so was the tbrosz false. Check the email.

Posted by: Gregory on January 2, 2006 at 12:10 PM | PERMALINK

Chao's complete quote (Benen actually links to it):

"CHAO: Well, the stock market is, after all, the final arbiter. And the stock market was very strong this morning in reaction to the news that we have just received."

Chao was referring to the DOW being the final arbiter of whether the January, 2004, job creation numbers were an indication of an economic upturn. This was in answer to a SPECIFIC question from Judy Woodruff.

Chao did not say that the stock market is the final arbiter of economic success, as Benin contends.

Posted by: The Machete' of Truth on January 2, 2006 at 12:11 PM | PERMALINK

your claim is false, fake tbrosz.

Posted by: bobbyp on January 2, 2006 at 12:12 PM | PERMALINK

NTODD-

I don't know why you're getting angry. I just exposed the post by Steve Benin as misleading. It wasn't that difficult.

Posted by: The Machete' of Truth on January 2, 2006 at 12:16 PM | PERMALINK

I don't know why you're getting angry.

Because you're just like all the other assholes who post claims, and when challenged, provide nothing to backup the assertions. I'm not going to take your word for it, nor am I going to do your work to see if your statements are correct.

Odd that you demand a citation for the claim above about what Kudlow said, yet won't provide any for your comments.

Posted by: NTodd on January 2, 2006 at 12:21 PM | PERMALINK

Jeffrey, the money is going to two places: high-income individuals and reatined earnings.

machete of truth, give us a frickin' break, why doncha? most of your comments are silly or cherrypicked, the typical work product of Propaganda U, where they seem to train all the little right-wing robots these days to produce such piffle.

let's deal with some reality: 50% of american households own stock, and the median stock ownership is around $75K, which means that 75% of american households own less than $75K in stock. The average stock ownership is about $225K (i'm not at my computer where i've bookmarked the data, so maybe later i'll give you the link); when you've got that kind of delta between mean and median, you know stock ownership is concentrated at the top level. So yes, stock ownership is for rich people, although stock ownership can be a vehicle for incresing net worth (just as home ownership can).

As for economic factors, you clearly don't know what you're talking about. Job creation has been weak, real wages are declining, corporations are sitting on tons of cash because they can't find a good place to invest it, household debt is at an alltime high (in real terms), and so forth. Your notion about net income, by the way, is wrong, probably because you don't understand how the stats are collected on this matter: for 80% of american households, real income is lower than it was when Bush took office.

Your notion that 9/11 destroyed the travel industry is also wrong: what's been croaking the travel industry is the high price of fuel and our old friend "legacy costs." The 9/11 excuse is long past its sell-by date.

The fact that federal tax revenues are up is a function of the economy being larger. However, what you laughingly call "tax cuts" are no such thing: they are "tax shifts," since the debt has to be paid, and the interest rate on that debt is rising. What is happening is that Bush has spent the planned-for surplus of FICA taxes on current tax cuts for the upper-income brackets (largely the top 2%, who are the only ones whose after-tax share of income has increased); someday, that debt will have to be paid back. Tax cuts without offsetting spending cuts aren't cuts.

i'm not even going to waste my time on silliness like the '90s boom was all because of capital gains reform: not even the morons at the Wall STreet Journal try that approach.

Posted by: howard on January 2, 2006 at 12:21 PM | PERMALINK

Upon further review...

I realize that this is a leftwing Web Site. That explains the personal hatred in NTODD's tone.

Please accept my apology for posting here. I realize that on leftwing sites, only the "Caretakers of the Orthodoxy" need participate.

Happy New Year to all!!!

And remember, as Michael Moore says, there really is no terrorist threat.

Posted by: The Machete' of Truth on January 2, 2006 at 12:22 PM | PERMALINK

I read the comments in this post with interest. Very academic. Lots of reference to obscure numbers. Think about the following.

Yesterday, as we do every month, my wife and I just paid our monthly bills and noticed two changes that are going to affect us and millions like us. First, our heating bill is up dramatically from the same month last year--over double. We have a heat pump and a pretty insulated home, so we can absorb the increase for a few months, but a retired friend of mine (think fixed income) is complaining of a $450 natural gas bill. I don't think he is alone. Lots of people are wearing extra sweaters this winter.

Second, and in the same month, our minimum credit card payments have doubled, prompting my wife to look into refinancing our home. In our case, pulling equity out of our home to pay off our credit cards is possible and will, no doubt, save our budget, but my wife asked how we are going to avoid running up credit card debt in the future. Like most Americans we haven't experienced any dramatic increase in our income in years. I am a professional and we are firmly members of the middle class, but we are over 50 so retirement is on the horizon. We talked about it and have agreed to cut up our cards, or at least, use them only in emergencies. From what I read nearly everybody has had a similar increase in minimum credit card payments.

What does it all mean? Well, in our case, we are not going to be buying that big screen high definition television until we save the money to pay cash. Neither am I going to be buying a new deer rifle, or any thing else that might be considered a luxury. We are probably going to cut back on our travel. Nothing bad about any of that, but assuming my wife and I are not alone in cutting up our credit cards, think what enforced private virtue means to the economy in general. Two hundred million people cutting back on credit card purchases could throw our economy, and the economy of the rest of the world, into a recession. Maybe it is a good thing in the long run, but bad, bad, bad for the rest of this winter and into the summer. Enjoy the Rose Bowl Parade.

Posted by: Ron Byers on January 2, 2006 at 12:23 PM | PERMALINK

btw, machete, i read the chao quote and i have no idea why you think it means what you claim. she is, after all, a bush appointee, which means imprecision of speech is a hallmark.

NTodd, don't worry: machete doesn't know nearly as much as he/she thinks he/she does. the course work at Propaganda U is so shallow....

Posted by: howard on January 2, 2006 at 12:23 PM | PERMALINK

Chao did not say that the stock market is the final arbiter of economic success, as Benin contends.

Your addition to the quotation doesn't change my interpretation.

Posted by: NTodd on January 2, 2006 at 12:23 PM | PERMALINK

I realize that this is a leftwing Web Site. That explains the personal hatred in NTODD's tone.

Yes, of course, I was so uncivil that you know are crying on your keyboard and can't possibly post anything to back up your assertions. Boofuckinghoo.

Posted by: NTodd on January 2, 2006 at 12:24 PM | PERMALINK

ron, thank you for laying out some home truths for our friend machete.

yes, the kinds of problems that you are facing are only too typical of the difficulties of most american households. The 80th percentile of household earnings is around $83K; the median is around $43K. While obviously there are young college grads making $50K and living large, for most people, making ends meet in an economy where good jobs with good benefits are declining, energy costs are up, and (thanks to the awful bankruptcy bill) credit card costs are up at a time of historically unprecedneted household debt, is a tremendous challenge.

On the other hand, trust me on this: you don't need a high def TV!

Machete turns out not only to be a propaganda robot but an idiot: if you have any actual knowledge of anything, machete, now would be a good time to demonstrate it.

Posted by: howard on January 2, 2006 at 12:27 PM | PERMALINK

And remember, as Michael Moore says, there really is no terrorist threat.

The only halfway true utterance you made. There is hope for you, "dull knife".

Posted by: bobbyp on January 2, 2006 at 12:27 PM | PERMALINK

But what's wrong with Machete's argument? He mentioned Clinton got a blowjob, didn't he? Doesn't that explain it all?

Posted by: Pat on January 2, 2006 at 12:29 PM | PERMALINK

Federal revenues collected for 2005 will be at an all time high. Tax cuts anyone.

Federal reciepts (measured in contant dollars) were less in 2004 than 2000 (Tax cuts anyone?)

http://www.taxpolicycenter.org/TaxFacts/Tfdb/TFTemplate.cfm?DocID=200&Topic2id=20&Topic3id=23

The revenues hit "all-time highs" on a regular basis because the economy is constantly growing.

Revenues hit "all-time highs" under Carter and Clinton.

Unfortunately, the Republican congress and Republican president are also hitting "all-time
highs" on borrowing and spending.

Posted by: Stephen on January 2, 2006 at 12:34 PM | PERMALINK

Typical
Right-Winger -
Obnoxious and offpoint,
Ludicrous,
Laughable

Posted by: Robert on January 2, 2006 at 12:40 PM | PERMALINK

You are so right, Howard. Look closely at your average american suburban neighborhood. The signs of decay are obvious--deferred maintenance, creeping shabbiness, increasing average age of the autos on the street, etc. Of course, there are exceptions, but your average working class family is living in a financial pressure cooker. It is starting to show, and not just in the level of uncivil political discourse.

Posted by: bobbyp on January 2, 2006 at 12:44 PM | PERMALINK

Howard, thanks for the support.

Alas, I don't need the HDTV, but I sure would like to have one.

bobbyp, your observations are accurate. I just don't know how close we are to a major economic pileup, but the new credit card rules are going to crush a lot of folks.

We really do need people in Washington who give a rats ass about regular Americans. Too bad all they seem to care about are their K Street clients.

Posted by: Ron Byers on January 2, 2006 at 12:49 PM | PERMALINK

You guys don't get it. Kevin has been writing about peak oil the whole year. If you had bought energy stocks, or energy based mutual funds (like FSESX or FSNGX) or even the energy based ETF like XLE every time he wrote about peak oil, you would have made at least 25% for the year.

Kevin has been giving you excellent investing advice, indvertently or not. I come here just for that.

Posted by: tbrosz on January 2, 2006 at 12:51 PM | PERMALINK

Just to amplify on my previous post, on May 26, 2005, when Kevin's Peak Oil Part I appeared, FSESX was $47. It ended the year at $65.

So if you guys had listened to Kevin, you would have made 37% just in 7 months.

Posted by: tbrosz on January 2, 2006 at 12:56 PM | PERMALINK

I posted my goodbye before I read the reply to me by "Howard". If I may address a couple of points:

1. I disagree that stock ownership is just for rich people. You said that 75% of Americans own less than $75,000 in stock, but that the average stock holding is $225,000.00. But the average is severely weighted by the Gates' and Buffets of the world. On the other hand, high capital gains taxes can really hurt the small investor, as well as the small saver. That's why I believe capital gains taxes should be completely abolished, as should any tax deductions for investment losses.

Howard, you seem to be economically sophisticated. If capital gains taxes and tax deductions to offset losses, both personal and corporate, were abolished, what would the net effect on revenues be?

I never said that the '90's boom was the result of capital gains tax reform, I said it must be factored in, something leftists never do.

2. Another factor never mentioned by leftwing observers of the '90's boom is the massive technology spending spurred by the Y2K situation. Not just in preparation for Y2K itself, but for the ancilliary investments that accompanied it. For example, Y2K begat servers, servers begat EAI, EAI begat software development and consulting and on and on and on. And believe me, when we reach the year 10,000, whoever is president is gonna see more of the same.

3. United Airlines has never recovered from 9/11. Legacy costs were a factor before, but 9/11 was the crusher. Of course, legacy costs are largely due to organized labor, aren't they? That's something most leftists are very supportive of.

4. Finally, your argument that "federal revenues being up is the result of the economy being larger" speaks volumes about the effectiveness of tax cuts. Your "postulant" on "tax shifting" is simply a circuitous route to avoid a simple truth: When tax rates are lower, the economy grows, creating more actual tax revenue.

Later, Gang. And don't forget: If the glove doesn't fit, you must acquit.

Posted by: The Machete' of Truth on January 2, 2006 at 12:56 PM | PERMALINK

Is this "tax revenues are at an all-time high" something that W has been saying lately? If so, it seems of a piece with his line about "everybody thought Saddam had WMD": perhaps true in a certain sense (/was true at a certain time etc.), but very misleading.

Posted by: kylemeister on January 2, 2006 at 12:56 PM | PERMALINK

Dear little Pen Knife,

Peruse at your leisure: www.townhall.com/opinion/columns/larrykudlow/2003/03/20/169609.html

Krudlow writes in part:

"One of the indicators of the future health and wealth of the nation is the stock market. In recent days--as President Bush has readied the nation for the forceful removal of Saddam Hussein, the US and Global stock markets have again confounded the naysaying media with dramatic rallies.
The market message is unmistakable, in that ridding the world of the Stalinesque dictator in Iraq is a huge plus. Terrorism will be reduced, weapons of mass murder will be limited, people will be safer around the world, human rights and democracy will be unleashed in the Middle East and the fragile outlook for the world prosperity will be improved. These are all positives on Wall Street...............Remember Machiavelli's dictum, "It is better to be feared than loved. Love will come later, when the Iraqi people are liberated. But fear, through substantial force, must come first - Wall Street fully approves of this turn of events."

He also mentioned that a Fox Poll said that 69% of those polled said that "If the war costs each taxpayer $300, then it is worth it."

Posted by: thethirdPaul on January 2, 2006 at 12:59 PM | PERMALINK

It was a clever dodge, Tbrosz (or fake Tbrosz as the case may be). You missed out on NutriSystems 1,500% gain 2005 as a result!

And you call yourself a smart investor? Stick to tabloids, that's where the real action is.

Posted by: bobbyp on January 2, 2006 at 1:00 PM | PERMALINK

Machete' claim:

I never said that the '90's boom was the result of capital gains tax reform, I said it must be factored in, something leftists never do.

Machete' quote from his first post:

The real economic boom (and it was a bona fide boom, make no mistake about it) during Clinton's second term came after Clinton, though kicking and screaming, agreed to Republican capital gains tax reform.

I have looked high and low for the word "factored" in the original claim. But if it was a "bona fide" boom, then what did the mid 90's tweak to capital gains have to do with it? Apparently nothing.

So why bring it up?

Posted by: bobbyp on January 2, 2006 at 1:10 PM | PERMALINK

Just to clarify, The Machete' of Truth is neither a rightwinger nor leftwinger. The Machete' is 100% objective.

My Clinton remarks would apply to any narcissistic sociopath, democrat or republican. He just happened to be the one sick enough to manifest his compulsion while on my payroll. I'm quite bitter about it.

Ron Byers- Great post! My situation is quite similar to yours, but I don't blame the President. Nor did I blame Clinton when I got laid off in 1999.

The economy is way to complex for simple explanations and far reaching conclusions about cause and effect relationships of economic policies.

That's really why I responded to the Benen article. I also get a kick out of how quickly leftwingers reply with vicious personal attacks.

NTODD is now a raving lunatic, and Howard, who I thought was rational, has lost all restraint. That's why I said, only the caretakers of the orthodoxy should be on this Site.

I apologize for upsetting you all.

Posted by: The Machete' of Truth on January 2, 2006 at 1:11 PM | PERMALINK

BobbyP,

Yeah, I read your 1941 Dow, but what about Pan Am, huh, huh?

Posted by: The Bolo of the Bewildered on January 2, 2006 at 1:13 PM | PERMALINK

butterknife of halft-truths: "-While the DOW has been weak, almost all of the other factors indicating economic success have been positive, including NET income growth. Tax cuts, anyone?"

'almost all' is such a nice phrase; it allows one to ignore job growth and the growth (or lack thereof) of the median wage.

Posted by: Barry on January 2, 2006 at 1:19 PM | PERMALINK

I must concede that if Bush has been able to create the economic conditions that preclude even one person from buying a deer rifle (I assume that a deer rifle is intended for killing deer), then Bush is not all bad.

Posted by: lib on January 2, 2006 at 1:26 PM | PERMALINK

Bolo,

Pan Am silver did OK, but not great, in 2005.

Posted by: bobbyp on January 2, 2006 at 1:26 PM | PERMALINK

JOHN ROBERTS WANTS A BIG RAISE FOR ALL OF YOUR HONORABLE JUDGESHIPS. THIS SHOULD BRING THE ECONOMY BACK IN LINE AND THEY CAN SPEND THE RAISE TO CREATE MORE JOBS , FOR THEY ARE ALL , ALL HONERABLE MEN.
HOWLER MONKEY

Posted by: HOWLER MONKEY on January 2, 2006 at 1:27 PM | PERMALINK

The Machete' of Truth on January 2, 2006 at 12:22 PM:

Please accept my apology for posting here. I realize that on leftwing sites, only the "Caretakers of the Orthodoxy" need participate.

Try to post a comment at Freeperville that don't toe the party line, and the comment gets deleted and their IP address blocked...Unlike Michelle Malkin, where there's no comment section whatsoever...

If you are going to offer up comments, expect people to disagree with you, sometimes strongly.

Posted by: grape_crush on January 2, 2006 at 1:29 PM | PERMALINK

The machete of mush speaketh:

The economy is way to complex for simple explanations and far reaching conclusions about cause and effect relationships of economic policies.

Guess that puts the kibosh on supply side economics, huh?

Posted by: bobbyp on January 2, 2006 at 1:29 PM | PERMALINK

So, what kind of cheese would you moonbats like with your whine?

Let's start by looking at a definition of the Dow Average:

a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal (which is published by Dow Jones & Company), a practice that dates back to the beginning of the century.
Whoa, what's this? It's not the Stock Market, it's 30 frigging stocks.

Wow, Bush must be a total failure because the weighted average value of 30 stocks is declining slightly. What was that economic growth last quarter, anyway?

Posted by: conspiracy nut on January 2, 2006 at 1:38 PM | PERMALINK

...Bush must be a total failure because the weighted average value of 30 stocks is declining slightly.

If you say so, nut. On the other hand, if we are economic ignoramuses (moonbats, to use your term) then the Secretary of Labor is a total loon trying, as she did, to justify a disappointing jobs report by refering to a couple of hours of trading activity on ONE stock exchange.

Heavy thinkers, those republicans.

Posted by: bobbyp on January 2, 2006 at 1:46 PM | PERMALINK

cn exmplifies the willful ignorance of the wingnuts.

NASDAQ, (^IXIC on Yahoo),the index of 3125 stocks has gone up by a whopping 1.38% during 2005, and the phenomenal -19% (that's negative) during the Bush years.

Same numbers for S&P500 (^GSPC) are 2.72% and -8% respectively.

Posted by: lib on January 2, 2006 at 1:48 PM | PERMALINK

It's your brainiac Labor Secretary that views equity prices as the most important indicator of general prosperity, not us, nutcon. Dow's not perfect but it goes back much farther than the others, and there's no reason to suppose that it is unrepresentative of trends in the equities market as a whole.

Posted by: kth on January 2, 2006 at 1:51 PM | PERMALINK

While obviously there are young college grads making $50K and living large ...

Not quite. I'm a scientist, working with engineers and new grads. Average starting salary is ~$28-$40k. Hey, notice anything about student loan debt? These starting salaries aren't adjusted for location either necessary. Completely anecdotal, but I met a few people in Manhattan with masters in architecture trying to survive on $35k. I make the same in NJ that I could in upstate NY where property is 200% less expensive.

So what we're seeing is the death of the middle class ... starting with the kids who are coming out of school with a moderate starting salary and student loans and housing eating up a minimum of 50% of post-tax salary. Add a car payment (though not required in a major metropolitan area, just double or triple housing costs), credit card payment, and utilities, and there's not much left for savings and investment. And definitely not enough to save for a 10% down-payment on a modest house.

If the goal of the economy is provide a family with the means to survive, then yes, we're still doing well. But if we're striving to maintain the middle class, then we're failing big time.

Posted by: ChrisS on January 2, 2006 at 2:01 PM | PERMALINK

For the wingnuts who have very conveniently decided that the stock market is not an indicator of economic well being of the nation, the Figure 1 on page 10 of this Bush administration document that charts the real median income of an American family, should be an eye opener, unless they are permanently blinded.

Posted by: lib on January 2, 2006 at 2:03 PM | PERMALINK

I just got a job as a chauffer, so now I'm behind the wheel of a Cadillac. You libruls are probably driving old foreign cars.

Posted by: frank on January 2, 2006 at 2:06 PM | PERMALINK

lib: Figure 1 on page 10 of this Bush administration document that charts the real median income of an American family, should be an eye opener

No fair using numbers - the economy is now a faith based initiative.

Posted by: alex on January 2, 2006 at 2:07 PM | PERMALINK

You know, we liberals could just try "creating our own reality" like the GOP does. I haven't tried that since the 60's, but hey, what's good for the goose.....

Posted by: bobbyp on January 2, 2006 at 2:12 PM | PERMALINK

I apologize for upsetting you all.

Think nothing of it, as I am sure we all will.

Now be a nice sport and watch one of the Crappy Bowls today. Well, maybe the Sugar has a good matchup.

Regards,

Posted by: bobbyp on January 2, 2006 at 2:21 PM | PERMALINK

If there is a fifty percent estate tax but the stock market doubles, the stockholders would be just as well off as if the estate tax were to be abolished but the stock market stagnates.

The Republicans currently are able to offer stockholders repeal of the estate tax, which is a bird in the hand.

The Democrats, in turn, would have to offer a rise in the stock market, which would be two in the bush.

The ability of the Democrats to market their alternative would be a function of how serious their proposal would be.

Given the never-ending enthusiasm Democrats have for their social agenda, reason exists to doubt that they are very serious about marketing any economic benefits.

Posted by: Thinker on January 2, 2006 at 2:22 PM | PERMALINK

No wonder Clinton had time to get his dick sucked in the oval office...

Instead of fucking everybody?

Posted by: G on January 2, 2006 at 2:25 PM | PERMALINK

The Republicans currently are able to offer stockholders repeal of the estate tax, which is a bird in the hand.

This is great if you love a good oligarchical system.

Posted by: G on January 2, 2006 at 2:27 PM | PERMALINK

"The Machete' of Truth" posted:

"85% of the gains in the DOW during Clinton's first term came AFTER the Republicans took control of congress"

False.

.

"James Carville stated before the DOW took off that stocks were for rich people"

True. The top 10% still own 90% of the stock.

.

"The post by Mr. Bennen quotes Ms. Chao quite sparingly. One would have to see more of the actual interview to pass judgement on her remarks."

Weasel words.

.

"While the DOW has been weak, almost all of the other factors indicating economic success have been positive"

False.

* Poverty has increased every year of the last five years

* Wages of the vast majority of Americans have gone backwards every year of the last five years

* The DOW would have to be almost to 13,000 in inflation-adjusted dollars just to break even with where it closed 2000

* The United States Department of Agriculture (USDA) estimates that more than 38 million Americans -- including nearly 14 million children -- are living on the BRINK OF HUNGER. That's up 2 MILLION in just one year.

.

"Federal revenues collected for 2005 will be at an all time high"

False.

Federal income tax revenues just recently hit the lowest level since 1959. You might want to check the blue line on the following chart between 2001 and 2004 (after 2004 is a projection):

http://angrybear.blogspot.com/rev_spen_exss3.jpg

.

"The real economic boom (and it was a bona fide boom, make no mistake about it) during Clinton's second term came after Clinton, though kicking and screaming, agreed to Republican capital gains tax reform"

False.

.

"The September 11 attacks virtually bankrupt the airline and travel industries."

The recession started months BEFORE 9/11, as a reaction to the illegal installation of the Boy Emperor Clown Criminal

.

"The unemployment rate has fallen to 5%"

NOT because more jobless workers are back to work, but because more are now classified as the 'Long-term Unemployed' and are no longer counted.

The national labor participation rate (the total number of the working-age population which is working or actively seeking a job) went over a cliff during the last five years, and is currently lower now than when the Boy Emperor Clown Criminal started his term.
.

Posted by: VJ on January 2, 2006 at 2:27 PM | PERMALINK

machete, i get a kick out of people who spout nothing but the approved propaganda robot line telling others that they've lost all restraint!

now, to deal with your supposed objectivity: let's take the biggest claim first. say you've got taxes running at 19% GDP. now, cut taxes so that they run at 18% GDP, and meanwhile, assume GDP nominal growth of 6% (3% real, 3% inflation), and waddya know? tax revenues are higher.

on the other hand, suppose you increase taxes to 20% GDP, and just for you, assume GDP nominal growth of 5% (2% real, cause just for you, i'm discoutning growth due to higher taxes, and 3% inflation), and waddya know? tax revenues are higher, too!

The fact is, you can look business cycle to business cycle, going back to Kennedy's tax cut, and you won't find any evidence that 18% GDP tax revenues produce a stronger economy than 20% tax revenues (because in the real world, we increased taxes in 1993 and nonetheless had the greatest period of growth in post-world war ii american history).

so i'm not denying that tax cuts can stimulate the economy in the slightest. what i am denying is that you can call cutting taxes and increasing spending a tax "cut;" it is a tax "deferal" whether you like it or not. try not paying the interest to the chinese, japanese, and korean bankers who hold our long paper and see how far that gets you. Indeed, as long rates increase, the interest on the national debt is going to become as large a line item as the defense budget, and unless you want to keep borrowing on the borrowing....

true supply siders - those who believe in tax cuts uber alles - also believe in cutting government spending, so that the budget is balanced and a smaller piece of the economic pie.

true keynesians - those who believe in using the government's economic politices counter-cyclically - believe that you increase spending and cut taxes during recessions and slow growth, and you curb spending and increase taxes during fast growth, so that over the course of the business cycle, the federal budget is balanced.

Morons like george bush and his fellow travellers belive that you cut taxes, increase spending, and leave the problem for someone else to solve. Christ, he's got a double stimulus going - tax cuts and increased spending - we're 17 quarters into an expansion, and we still haven't created as many as 300K jobs in a month.

Meanwhile, to run down your other points: no, as has been pointed out, you didn't point to changes in cap gains laws as a "factor;" no, it's not Y2K spending that caused the '90s boom (i mean, keeristo, where do you come up with stuff like that? sure, it was an influence at the margin, just like the internet boom was an influence at the margin, but the cause of the '90s boom was the bond market taking the clinton administration and the republican congress seriously on fiscal discipline and eliminating the irresponsiblity premium that had been part of long rates since the 1970s); and no, even though you're down to United Airlines, it's not 9/11 that is croaking them, it's a failing business model.

Finally, you make Carville's point about stock ownerhsip. Let's take the Buffet, Gates, Ballmer, and Allen households: among them, that's north of $100B in stock ownership. Divide that by the 60,000,000 or so households that own stock at all, and that's 16K per household already, just from those 4. Something like 3-4% of households have liquid assets worth north of $1M, and while that isn't all stock, much of it is. That's the bulk of stock ownership in america....

Posted by: howard on January 2, 2006 at 2:38 PM | PERMALINK

If there is a fifty percent estate tax but the stock market doubles, the stockholders would be just as well off as if the estate tax were to be abolished but the stock market stagnates.

You may have a point, thinker. Assume you buy a share of stock for $100 and die. The stock is sold to pay the estate tax of $50. Next, assume the share price subsequently doubles. This does not affect the estate tax at all. It has been paid. You, on the other hand, are still dead.

Now in case 2, there is no estate tax. Your heirs have a $100 capital gain that may or may not be taxed if the share is sold, but the share can be passed on tax free to even more distant future heirs upon your survivor's death. You're still dead by the way.

So tell me: In which case are you better off?

Posted by: bobbyp on January 2, 2006 at 2:39 PM | PERMALINK

None of the conventional economic statistics except the rate of unemployment suggests that there has been any improvement in the lives of middle class and poorer americans during the Bush regime. But no one (at least not me) knows how many workers have stopped looking for employment during this time, as the official unemployment numbers do not include discouraged workers. So it's a mistake to just crow about the unemployment statistics, which is ok, but not suberb as the wingnuts would like us to believe.

Posted by: lib on January 2, 2006 at 2:48 PM | PERMALINK

Howard,

Careful. You are showing signs of getting your restraint back. It may be taxable.

Posted by: bobbyp on January 2, 2006 at 2:49 PM | PERMALINK

Sigh...

Rebutting wingnuts fantasy statistics is such a tedious, albeit easy, job.

While the DOW has been weak, almost all of the other factors indicating economic success have been positive, including NET income growth. Tax cuts, anyone?

To say the Dow has been weak is a bit of an understatement. Take a look back and see if you can find any president whose first full 4-year term had a decrease in the Dow from inaguration date to inaguration date. Not Clinton, not Bush I, not Reagan, not Carter, not Nixon, not Johnson...well, you get the idea. I think George W beat Hoover, though. Good for him. But not for us. I won't even get into the NASDAQ- too ugly.

"Almost all of the other factors" apparently excludes real median household income- you know-what real people bring in? Down...reversed to pre-1998 levels. Jobs? The weakest post-recession recovery on record- a full 4 year term without a single net job produced.

To be fair, not everything is down- like number of Americans without health insurance, or folks below the poverty level. Those are both up, so Mr. Bush has that going for him.

Federal revenues collected for 2005 will be at an all time high. Tax cuts anyone.

Federal tax revenues almost always go up. Population goes up, economic activity (usually) goes up, tax receipts go up. Clinton had "all time highs" eight years in a row, before and after Republican congresses, before and after tax increases (although more so after).

In contrast, after Bush took over, tax receipts went down. Down in 2001, down more in 2002, down even more in 2003. Three years in a row- that hasn't happened since...well, actually, it's never happened before, at least going back to 1930. Another first for Mr. Bush. Having taken a bit of a breather from big cuts, tax receipts have recovered in 2004 and 2005...somewhat. At least, if you pretend there's no such thing as inflation. In real terms...well, lets just say Mr. Bush will be lucky if real tax receipts in 2008 reach the level of those in 2000.

85% of the gains in the DOW during Clinton's first term came AFTER the Republicans took control of congress, which spanned only 25% of his first term.

Cool! Wingnut math...where Jan 95 to Jan 97 is "only 25%" of Jan 93 to Jan 97.

Posted by: pdq on January 2, 2006 at 2:56 PM | PERMALINK

Where's it going? And why?
Posted by: Karmakin on January 2, 2006 at 11:54 AM | PERMALINK

It's going to Halliburton.
Because Republicans Steal.

They wanted a war to justify no oversight, and deregulation and tax cuts, so they can steal. They are the party of the white-collar criminal, the party of fraud and embezzlement. They are the party that brought us the Great Depression, The Gilded Age, the S&L crisis, Iran Contra, Watergate, Valerie Plame, Jack Abramoff, Enron, and Worldcom.

Republican Culture of Corruption.

Posted by: Osama_Been_Forgotten on January 2, 2006 at 3:03 PM | PERMALINK

The real irony here is my bushist buddy, who owns a cabinet and window business, and has had a couple of really bad months.

He thinks it's fallout from Katrina (oil price shock), and 9/11, and that a new round of tax cuts is going to stimulate the economy some more, and he'll be flying high in 2006. In the meantime, he (and his wife and 3 kids) are being evicted from his (rental) home, because he wasn't able to come up with rent money since October. And he still says that the economy is way better than Clinton's, and sees it as that the "right people" are being rewarded in this economy.

I told him about home sales dropping 11% last month. I told him about heating costs (in this state) going up 40% this winter. I told him about the predited two further rate-hikes coming this year, (to water-down the effects on the stock market of all that crooked Iraq money floating around out there - watch the price of Gold, by the way). But nope, it's all about waiting for the tax cuts to kick in. He says we'll be flying high by April 2006 when the refunds go out, and that the results will destroy the Democrats' chances in the 06 election.

Just sad.

Posted by: Osama_Been_Forgotten on January 2, 2006 at 3:15 PM | PERMALINK

"NET income growth."

So, since median income is down that means the people at the top are making out like gangbusters.

Posted by: Jeffrey Davis on January 2, 2006 at 3:16 PM | PERMALINK

Someone replied to my question about where the money is going that corporations are retaining their earnings. Two questions:

1) Why hasn't the price of the stock increased to reflect the big pile of money that they're sitting on?

2) Isn't sitting on cash a great way to lose it?

Posted by: Jeffrey Davis on January 2, 2006 at 3:28 PM | PERMALINK

Jeffrey, it was me who responded about the reatined earnings, so let me go a couple steps further.

Stock prices represent (broadly speaking) the net discounted value (meaning, discounting for inflation) of the future earnings stream of the business. That P/E ratio that you hear about? That's simply a shorthand for showing you how the market values a dollar of earnings: a company that is growing rapidly might see a P/E of 30 or more, while a company that is growing slowly might see a single-digit P/E.

Regardless, from a stock-pricing standpoint, dollars sitting around in a money market, earning, say, 4% a year, don't impress stock market investors! That 4% is the living definition of "slow growth," and as a result, lots of excess cash sitting around tends to distress investors, not impress them.

That's why hedge fund managers look at companies with lots of cash and basically say: that's a wasting asset. If you can't find a way to use the cash, either distribute it as a dividend or use it to buy in shares, thereby improving everyone's P/E (because earnings will be distributed across fewer shares as a result).

It's a problem that has even afflicted mighty Microsoft, an earnings behemoth that has been sitting on a mound of cash for a few years now, and that's why Microsoft is finally paying out a dividend (including the special dividend last year) and is buying back shares.

and yes, sitting on cash is a great way to lose it: first of all, it's a temptation to corporate managers to waste and extravagance, and second of all, it's a temptation to management consultants and investment bankers to come up with cockamamie schemes of how to use it in ways that don't improve the core business.

The fact that American business in general is sitting on a mound of cash is, therefore, not a good sign....

Posted by: howard on January 2, 2006 at 3:37 PM | PERMALINK

osama, that is sad, but tell us - what sterling qualities does this feller have to be your buddy? because on the face of it, he sounds like an ill-informed jerk....

Posted by: howard on January 2, 2006 at 3:39 PM | PERMALINK

Tell ya what, offer some citations, and maybe I'll consider your points.

Believe me, offering extensive links to the original data wouldn't change one single mind around here. I know.

That MSNBC took a "snapshot" of the end of the year is largely irrelevant. Look at the DOW through that whole time period. Why is this January-January period any more or less significant than, for example, October 2004 to October 2005?

Ignoring the significant events of this period isn't going to work very well, either.

The contortions the Left is going to have to accomplish to make the economy look bad are going to be even more entertaining as the year goes on.

BTW, citing Clinton's stock market "success" has to be a new level of chutzpah.

Posted by: tbrosz on January 2, 2006 at 3:43 PM | PERMALINK

very droll, tbrosz. tell us, if you will, what is contortionate about noting: falling real incomes; declining fringe benefits; rising headline inflation; poor job creation; massive levels of cash held by corporations who can't find a good use for it; historically unprecedented levels of household debt and monthly debt service; historically low levels of home equity due to people extracting equity to maintain consumption; massively growing federal debt; rising interest rates and inflationary expectations; and the number of discouraged workers.

to my way of thinking, every single one of these indicators is a perfectly standard and normal way of looking at how well the economy is doing, but perhaps you have a deeper level of insight....

Posted by: howard on January 2, 2006 at 3:50 PM | PERMALINK

....citing Clinton's stock market "success" has to be a new level of chutzpah.


We should not have registration, but definitely find a way to discourage mentally deranged individuals from posting here.

Posted by: lib on January 2, 2006 at 3:54 PM | PERMALINK

small world time, if our new favorite, machete, is still paying attention. i just came across an excellent discussion on the myth of tax cuts paying for themselves, based on a recent, detailed study by the CBO ("analyzing the economic and budgetary effects of a 10 percent cut in income tax rates").

study up: http://bigpicture.typepad.com/comments/2006/01/laughing_at_laf.html

Posted by: howard on January 2, 2006 at 3:55 PM | PERMALINK

but perhaps you have a deeper level of insight....

I think he's just got his head up his ass.

Oh wait.


Posted by: ChrisS on January 2, 2006 at 3:57 PM | PERMALINK

BTW, citing Clinton's stock market "success" has to be a new level of chutzpah.

Umm...why?

Republicans went on for years and years beating their chests over Reagan's stock market success. A 131% increase over his term was pretty darn good. The 225% increase that the Dow saw over Clinton's two terms was...well, an incautious person might say even better.

Not sure what your beef is- Clinton followed reasonably predictable, responsible, and stable economic policies that fostered economic growth. If you're going to give all the credit to a Republican congress during most of Clinton's time, I presume you would do the same for the Democratic congress that existed throughout all of Reagan's time, right?

Posted by: pdq on January 2, 2006 at 4:02 PM | PERMALINK

lib:

We should not have registration, but definitely find a way to discourage mentally deranged individuals from posting here.

It would get awfully lonely here.

Good luck selling the "crappy economy" meme next year.

Posted by: tbrosz on January 2, 2006 at 4:02 PM | PERMALINK

Good luck selling the "crappy economy" meme next year.

The point is not what can be sold to the electorate, but what the facts are. Your statement on Clinton's economy is idiotic.

Posted by: lib on January 2, 2006 at 4:06 PM | PERMALINK

I agree with you tbrosz. The thought of only you and I posting here is painful indeed.

In my opinion, selling the "crappy economy" meme next year will be, as they say, "a slam dunk".

Posted by: bobbyp on January 2, 2006 at 4:14 PM | PERMALINK

pdq:

I might be missing something, but are you really trying to sell the tech stock bubble as a valid and stable growth of stock values?

Posted by: tbrosz on January 2, 2006 at 4:16 PM | PERMALINK

The point is not what can be sold to the electorate, but what the facts are.

Again, good luck with that. If the stock market is up, employment at an all-time high, and other economic indicators up, showing a ten-page paper that proves that none of this really means anything isn't going to work very well.

On the bright side, you can comfort yourselves again for another few years with how stupid the American voters are.

Your statement on Clinton's economy is idiotic.

I was talking only about the stock market during the last couple of years of his term. That was the specific indicator I was shown here.

Posted by: tbrosz on January 2, 2006 at 4:19 PM | PERMALINK

The September 11 attacks virtually bankrupts the airline and travel industries.

I will edit that to: "American fear virtually bankrupts the airline and travel industries."

Posted by: The Snowshovel of Bullshit on January 2, 2006 at 4:33 PM | PERMALINK

At least right now the Stock Market is not up. The unemployment rate is not at an all time low. As soon as the people look at the performance of the 401Ks (dismal) at the beginning of the year, and those who have adjustable mortgages see their payments go up, there will be no need for a ten page paper.

As for Clinton's achievements, it is dishonesty of the highest order to just focus on the stock performance during the last two years of his presidency. No one except rabid partisans disputes that economy did well under Clinton despite the bubble - considerably better than under GWB.

Posted by: lib on January 2, 2006 at 4:36 PM | PERMALINK

If the GDP is going up steadily at 3-4% per year and yet the median income is down (adj. for inflation), then that means an even greater percentage of the nation's wealth is going to the wealthy. Perhaps that's what the Republicans mean by 'a good economy'.

While I suspect some of that was happening during the Clinton years there was a concerted effort to decrease unemployment, so that the wealth was distributed to more people. That's more of what a Democrat means by 'a good economy'.

Kevin, would you care to show a balance sheet for the nation, to indicate who was making money and who wasn't during this past year. This is a good time to sum up how things have gone.

Posted by: MarkH on January 2, 2006 at 4:38 PM | PERMALINK

I might be missing something, but are you really trying to sell the tech stock bubble as a valid and stable growth of stock values?

Okay, for the sake of argument, let's compare the lowest intraday low of the Dow after the bubble burst. This was on October 10, 2002, in the midst of the saber-rattling unsettledness in the lead up to the Iraq war. (This was first surpassed, by the way, somewhere around 1998 during Clinton's tenure). If Clinton only gets credit for the Dow up to that post-recession, post-9/11, sabre-rattling level, the dow was still up 120% from when he was inaugurated.

How's that compare to Mr. Bush?

Posted by: pdq on January 2, 2006 at 4:42 PM | PERMALINK

If the stock market is up

Except it's down. Down for the year. Down for 5 years. 5 years down. Think about that. When was the last time the stock market was down for 5 years? Not even factoring in inflation or the growth in the population. Down in absolute numbers. 5 years.

And median income down. 5 years. The average guy is losing money to Bush through all 5 years of his term. The stock market is down. Who is making the money? The inclination I have is to presume that the numbers have been fudged egregiously. Where is the money going that 4% increases in GNP woild give you? And why is it so skewed that the average guy is neither participating in the increases in productivity nor in job growth? As a guy with a beard asked, "Cui bono?"

Posted by: Jeffrey Davis on January 2, 2006 at 4:47 PM | PERMALINK

Anybody who thinks that the DJIA represents the stock market isn't worth listening to in the first place. The DJIA consists of 30 large-cap stocks, which is hardly representative of the market as a whole. The best measurement of the US stock market is the Wilshire 5000, which consists of 5000 stocks of all sizes. It was up 4.6% this year, not including dividends, which is quite respectable.

And plenty of people did much better than that. If you had significant portions of your portfolio invested in energy, natural resources, commodities, or non-US equities, you probably made any where from 15-20% this year.

Posted by: MattW on January 2, 2006 at 4:55 PM | PERMALINK

When was the last time the stock market was down for 5 years?

You can see the answer to this question by eyeballing this chart from Yahoo.

Answer: GWB is the worst President of the last 70 years.

Posted by: lib on January 2, 2006 at 4:56 PM | PERMALINK

MatW:

4.6% is not a respectable return for a stock index, since investment vehicles that are much less riskier yielded similar returns during this period.

As many others have pointed out above, you don't have to restrict yourself to Dow to conclude that broadly the equity markets have not done well under Bush.

Actually if everyone had a private Social Security account as proposed by GWB last year, and invested in broad stock indexes, the performance of those accounts would have further eroded the poularity of the President.

Posted by: nut on January 2, 2006 at 5:12 PM | PERMALINK

Anybody who thinks that the DJIA represents the stock market isn't worth listening to in the first place.

Well, although it's usually the wingnuts that bring up the Dow in the first place, you have a good point. And if you look at the broader market indices, Mr. Bush's performance looks, well...even worse.

Over Clinton's 8 year term, inaguration to inaguration, the S+P 500 was up even more than the Dow: 209%

Under Bush, to date: down 7%.

And again, regarding the NASDAQ? You don't want to know. The broader the index, the worse the numbers get for Mr. Bush.

Posted by: pdq on January 2, 2006 at 5:24 PM | PERMALINK

"If you had significant portions of your portfolio invested in energy, natural resources, commodities, or non-US equities, you probably made any where from 15-20% this year."

Isn't hard to profit from bush's economic management. Just bet on the bush family allied industries (energy, resource extraction, war) and/or on foreign markets. :)

Makes it all much simpler when the might of government is bent on enriching one or two sectors at the expense of others.

I actually did well sending much of my money overseas the last couple years (I'm not quite cynical enough to invest in extraction and war just because bush was elected especially as they support people like him so strongly, but getting some of my eggs out of this republican controlled basket was aparrantly a good idea).

Hmm isn't that another economic flow that is way up, americans investing outside the US.

Posted by: jefff on January 2, 2006 at 5:25 PM | PERMALINK

'tbrosz' posted:

"Good luck selling the 'crappy economy' meme next year."

It doesn't require "selling". The majority of the American people, by poll, already agree the economy is "crappy" and the country is going in the wrong direction.
.

Posted by: VJ on January 2, 2006 at 5:27 PM | PERMALINK

Over Clinton's 8 year term, inaguration to inaguration, the S+P 500 was up even more than the Dow: 209%

Correction: Almost as much as the Dow, which was up 225%. Much less than the NASDAQ, which was up 296%. Which doesn't count, even though the tech bubble had already burst by January 2001.

Posted by: pdq on January 2, 2006 at 5:33 PM | PERMALINK

Nut.....4.6% by itself is not very good, but add in another 3% or so return from dividends, and you're talking 7-8%, which is only about 1-2 percentage points below the long term averages.

As much as I absolutely loath Bush, he was not responsible for the bursting of the stock market bubble. Since it bottomed out in October of 2002, the market has done just fine (up 29% in 2003, 11% in 2004, 5% in 2005, all not including dividends). So broadly, the equity markets have done just fine, unless you blame Bush for the bursting of the bubble.

And, Jefff, betting on energy, natural resources, and foreign stocks has absolutely nothing to do with Bush, and everything to do with common sense. It's simply part of having a well-diversified portfolio. It also doesn't take a genius to realize that we have a finite amount of natural resources to exploit and that as long as the world population continues to increases, so will demand for energy. It also does not take a genius to realize that the burgeoning debt will eventually cause the dollar to weaken, and that with the US now making up less than 50% of worldwide GDP, a diversified basket of foreign equities is likely to outperform the US markets for the forseeable future.

Posted by: MattW on January 2, 2006 at 6:06 PM | PERMALINK

This thread is probably dead, so it seems to be appropriate to put the last nail for the nuts here.


Early last month, without much fanfare, the Congressional Budget Office released a paper called "Analyzing the Economic and Budgetary Effects of a 10 Percent Cut in Income Tax Rates."... [I]t may be one of the most important government publications in years. As Douglas J. Holtz-Eakin, the budget office's director, writes... most predictions of the effects of tax-rate changes "do not include the budgetary impact of any possible macroeconomic effects of tax policies." In other words, the predictions don't take into account how tax cuts could affect the overall size of the economy. It is this omission - one often cited by proponents of tax cuts, especially in the White House - that the paper tries to correct.... Ben Page estimates estimates how an across-the-board cut in income tax rates could generate higher levels of economic activity.... Even in his most generous scenario, only 28 percent of lost tax revenue is recouped over a 10-year period. The United States, it seems, is firmly planted on the left side of the Laffer Curve. Recent experience corroborates this prediction. In the second quarter of 2001, just before the first of President Bush's tax cuts took effect, federal receipts from personal taxes accounted for 10.3 percent of the economy. By the end of the post-recession slump, receipts had dropped to 6.4 percent. But in the third quarter of 2005, with the economy booming, they were still under 7.5 percent - an enormous difference. In dollar terms, federal receipts from personal income taxes, at $802 billion in 2004, are still lower than they were in 1998 ($826 billion) and much lower than in 2001 ($994 billion)...

...From Brad deLong's site.

Posted by: lib on January 2, 2006 at 6:07 PM | PERMALINK

lib:

"When was the last time the stock market was down for 5 years?"

You can see the answer to this question by eyeballing this chart from Yahoo.

Answer: GWB is the worst President of the last 70 years.

How are you defining "down" from that chart? The market was almost flat from 1965 to 1980.

Posted by: tbrosz on January 2, 2006 at 6:14 PM | PERMALINK

MattW:

You are conflating investment advice for an individual investor with the subject of overall growth in the stock market which is being discussed here.

Posted by: nut on January 2, 2006 at 6:19 PM | PERMALINK

No I'm not....I'm just pointing out that as much as I hate Bush, he did not cause the stock market bubble to burst, and that US stock market returns since the market bottomed out in October 2002 have been just fine.

Posted by: MattW on January 2, 2006 at 6:30 PM | PERMALINK
The Machete' is 100% objective.

Impressive!

Especially for a self-evaluation.

Posted by: Lawrence of Arabia on January 2, 2006 at 6:34 PM | PERMALINK

mattw, under no circumstances is the wilshire 5000 yielding 3%.

that said, the stock market responds to many exigencies, but it was, way back in the original post, Elaine Chao who brought up the stock market as validating economic performance.

Economic performance can be looked at through a variety of indicators, and the vast majority of them indicate a bifurcated economy: a few million households in america are doing very well, and one way or another, the other 115M or so are scuffling.

in comparison, as has already been pointed out, households at all levels of income and wealth improved their position during the clinton years.

now, of course, not all of that is clinton's doing and not all the weaknesses of the economy are bush's fault, but whereas clinton made an appropriate and intelligent choice of policies, bush has followed the delueded path of cut taxes and increase spending.

As i'm apparently the last person in america to remember, bush said the 2003 tax cut would produce 5.5M new jobs by the end of 2004. here we are at the end of 2005 and we're more than 1M jobs short, so even by bush's own choice of indicator, the economy has been weak.

Posted by: howard on January 2, 2006 at 6:36 PM | PERMALINK

Since it bottomed out in October of 2002, the market has done just fine (up 29% in 2003, 11% in 2004, 5% in 2005, all not including dividends). So broadly, the equity markets have done just fine

...as long as you ignore the fact that much of the tech market collapse had already taken place before Bush took office, and that the "broader markets" as well as the big caps continued going down well past the brief 2001 recession and 9/11.

I think it's worth noting that the Dow was above 10,000 at the end of 2002, well after the tech bubble, well after 9/11, and well after the recession of 2001. It dropped 17% that year (and was down 28% by your baseline of October of 2002). So yeah, apart from all of the big declines, the markets have done swimmingly under Mr. Bush.

So what was it that led equities to drop so precipitously (and the job market to sour) in 2002? The recession was past- the tech bubble bursting even more so, and we'd prevailed quickly and with minimum loss of life in Afghanistan.

Knowing that the markets despise nothing more than uncertainty, I tend to believe the 2002 drop had mostly to do with the US lurching toward starting a "preemptive" war in the middle of the Middle East powderkeg. I'm sure others have different takes on this. But I think it's disingenuous to give credit to Mr. Bush for the recovery (in terms of either stocks or jobs) from a drop that he was largely responsible for.

Posted by: pdq on January 2, 2006 at 7:00 PM | PERMALINK

Howard, although I am an ardent Democrat, to say that the overall economy has been weak is a bit of a stretch. GDP growth has been just fine (although the fact that it may be growing on the back of an unsustainable amount of consumer credit card debt is a valid concern), and people who have a trade (carpenters, plumbers, etc.) or a college education are doing just fine.

The people who are really struggling to make ends meet are the people at the bottom of the economic spectrum who have neither an education or a skill. Their wages are being supressed because they are easily replaceable and therefore have little leverage with which to fight for increased wages.

The major scandal is the fact that the federal minimum wage has not been raised to keep up with inflation, although many states have addressed this by passing minimum wage increases on their own.

Posted by: MattW on January 2, 2006 at 7:28 PM | PERMALINK

Matt, being a democrat doesn't exempt you from a blind spot on the economy. Would that it were so that it's only people with neither education nor a skill who are struggling, but it isn't. When the real wages of 80% of americans are declining, that's far more than those with neither education nor a skill. When household debt and monthly debt service obligations are at all-time highs, that's far more than those with neither education nor a skill. Etc.

i mean - go talk to some software engineers and find out if they think this economy is doing so well.

what has sustained gdp growth is, as i noted above, the double stimulus of tax cuts and heightened spending 17 quarters after a recession ended. we will pay a price for that in the future, which should appropriately be debited to the bush administration (and, indeed, i expect the future to arrive before bush leaves office, as it will only take a modest further uptick in interest rates to croak lots and lots of overextended households).

now, i don't blame bush entirely for this state of affairs: as i've noted in the past, increasing globalization means the standard of living in the rest of the world rises to meet the american living standard, which, in turn, declines, and no individual president can do much about that. but given that, bush made absolutely the wrong policy choices, which have, therefore, made a difficult situation worse than it has to be.

when gdp growth is essentially ending up as retained earnings and in the pockets of the upper 2% of households by income, gdp isn't the best of indicators for the economy as a whole.

ps. btw, i hunted around and couldn't put my fingers on the wilshire 5000 yield precisely, but it's in the nature of 1.5%, not 3.0%.

Posted by: howard on January 2, 2006 at 8:52 PM | PERMALINK

Arguing with tbrosz about the economy is less productive than arguing Differential Calculus with a five-year-old. At least the five-year-old doesn't "know" things about the subject under discussion that aren't true.

Posted by: on January 2, 2006 at 9:40 PM | PERMALINK

very droll, tbrosz. tell us, if you will, what is contortionate about noting: falling real incomes; declining fringe benefits; rising headline inflation; poor job creation; massive levels of cash held by corporations who can't find a good use for it; historically unprecedented levels of household debt and monthly debt service; historically low levels of home equity due to people extracting equity to maintain consumption; massively growing federal debt; rising interest rates and inflationary expectations; and the number of discouraged workers.

Simple, howard, they call into question the wisdom and effectiveness of Bush's borrow-and-spend economics, and therefore ultimately threaten tbrosz' tax cut -- the only element of Bush's economic policy he really cares about, and his sole actual claim to so-called "libertarianism."

Posted by: Gregory on January 2, 2006 at 9:59 PM | PERMALINK

"The Machete' of Truth" is really "The Penknife of Disingenuity" in pretentious disguise.

Posted by: Advocate for God on January 3, 2006 at 1:39 PM | PERMALINK

I hope when I'm President that I don't inherit an overvalued stock market with ridiculous p/e ratios at the same time as a tech bubble encouraged by the previous President bursts and real estate investment explodes goaded on by teeny interest rates. Then I won't be dragged through the mud for my stock market 'failings'.

Posted by: dkrypt on January 3, 2006 at 2:48 PM | PERMALINK

All you Dubyalovers can go to hell.

Dubyanomics is a failure. Not only is the market down 15 points from when he took office 5 years ago, but our wages are stagnant or going down.

Only the top 2% are doing well with Chimpy. The rest of us are getting screwed.

If you voted for Dubya and you're not at least a millionaire, you voted against your own wallet, you stupid halfwit moronic idiot dumbass.

Posted by: Tom3 on January 3, 2006 at 3:05 PM | PERMALINK

I hope when I'm President that I don't inherit an overvalued stock market with ridiculous p/e ratios at the same time as a tech bubble encouraged by the previous President bursts and real estate investment explodes goaded on by teeny interest rates. Then I won't be dragged through the mud for my stock market 'failings'.

If that happens, use some sense: don't use all your waking moments trying to put money into the hands of people who don't need it. That policy leads to stagnation.

Posted by: Jeffrey Davis on January 3, 2006 at 3:39 PM | PERMALINK

The latest closing values, as of the date specified:

DOW 30

1/20/1981: 950.69
1/20/1989: 2235.36
1/20/1993: 3241.95
1/20/2001: 10587.59
Today: 10717.50


S&P 500

1/20/1981: 131.65
1/20/1989: 286.63
1/20/1993: 433.37
1/20/2001: 1342.54
Today: 1248.29

Posted by: Irfo on January 3, 2006 at 3:45 PM | PERMALINK

dkrypt: I hope when I'm President that I don't inherit an overvalued stock market with ridiculous p/e ratios . . .

Hmmmmm.

Maybe you should talk to the tax-cutting GOP Congress that encouraged all that wild speculation in the stock market after 1998 or so.

Posted by: Advocate for God on January 3, 2006 at 4:06 PM | PERMALINK

Most Americans Losing Ground over last 5 years while top 20% doing well.

Take inflation into account and you find that half of all American workers are earning less now than they did in 2001. Rarely before in history has there been such a long period of growth in the gross domestic product without most Americans sharing in that growth.
http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=10794

What has grown signficicantly during the Bush Presidency? Each of the following categories have broken records:

The deficit - in fact a record breaking turnarround from surplus to deficit.

Political fundraising, Bush has raised far more than any individual ever before.

The number and percentage living in poverty.

The number and percentage without health insurance.

Posted by: Catch 22 on January 3, 2006 at 4:44 PM | PERMALINK

It is dishonesty of the highest order to imply that if Clinton were still President that the economy would be doing better than it is right now. The stock market burst in the last few months of Clinton's term (apparently people like to forget that Bush didn't take office until January of 2001, not 2000).

http://finance.yahoo.com/q/bc?s=%5EIXIC&t=my

This is a simple chart showing the NASDAQ, now look at the line where 2000 starts. Just to the right of that, but well before 2001. Note that it's almost a vertical line, straight down. The difference between Clinton's stock gains and the one's under Reagan is that Reagan didn't allow a bubble to be created to artifically stimulate the economy. He didn't have Sept 11th to contend with. In short, it is simple idiocy to attribute the bubble bursting (and it's after effects) to Bush when Clinton allowed it to happen.

Oh, and let's talk about how many CONVICTIONS there were in the Clinton Administration (not just cheap shot indictments, some of which have already been laughed out of court).

Posted by: Ratdog on January 3, 2006 at 5:21 PM | PERMALINK

Uh, Steve, we are nation UNDER ATTACK and have been since Sept 11. 2001.

It's funny how often liberals forget that.

Posted by: Al on January 2, 2006 at 11:35 AM

We are under attack by the fascists... Other than that I rebuke you with "BBC - The Power of Nightmares"

Watch...

Then screw off...

Posted by: Krk on January 3, 2006 at 8:24 PM | PERMALINK

Upon further review...

I realize that this is a leftwing Web Site. That explains the personal hatred in NTODD's tone.

Please accept my apology for posting here. I realize that on leftwing sites, only the "Caretakers of the Orthodoxy" need participate.

Happy New Year to all!!!

And remember, as Michael Moore says, there really is no terrorist threat.

Posted by: The Machete' of Truth on January 2, 2006 at 12:22 PM | PERMALINK

... .. . And so does the BBC... and the German Government and the Canadian Government...

The only thing thats a threat... Is the US...

We don't need you to "pretend" things are ok... Also... Please.. attack Clinton and the Dems... They are the lighter side of the same dark evil ;P

Posted by: Krk on January 3, 2006 at 8:57 PM | PERMALINK

It's an even larger loss when you consider the strength of the dollar five years ago versus what it is now.

Posted by: thedevil on January 3, 2006 at 9:16 PM | PERMALINK

Ratdog, you really don't know anything and don't deserve a response, but still, just so you don't embarass yourself in front of a more hostile crowd: there was a "bubble" under Reagan, known as the stock market in general.

And it burst in October, 1987, a moment that came close to shaking the foundations of our financial order.

and that's just one tiny example of the multitudinous pieces of ignorance that populate your remarks.

Posted by: howard on January 3, 2006 at 9:42 PM | PERMALINK

"...there was a "bubble" under Reagan, known as the stock market in general.

And it burst in October, 1987, a moment that came close to shaking the foundations of our financial order."

For those of you who think howard doesn't have his head up his ass, here is the graph that tell all:

http://finance.yahoo.com/q/bc?t=my&s=%5EIXIC&l=on&z=m&q=l&c=&c=%5EDJI

Poor howard can't read these very well (obviously) so I'll help out. The blue line is the NASDAQ from 1970 to now. The red line is the DOW from 1970 to now. If you look between 1985 and 1990 (1987 is in there, in case you missed it howard) there is a little blip. The tiny little blip is the "bubble" howard is comparing to the next section we'll discuss. Remember the size of that little blip. Now look over to 2000. You'll see a sharp rise that went on for a long time up until the beginning of 2000 (while Clinton was still in office). Notice after that the line drops almost vertically.

A "bubble" in the stock market indicates that the stock market is so overvalued that the stock prices can't be justified and the market corrects itself (harshly). That's not what happened in 1987. We know that for a few reasons, first, the next day (unlike the Clinton Crash of 2000) corrected upwards the next day (102 points the next day, the following Thursday it went up more than 180 points). The market was overvalued, but even a cursory search on the subject will tell you that virtually every economist who has written on the subject doesn't consider that even close to the primary reason.

Unfortunately, through his hatred, poor howard can't tell the difference between a blip and a downward vertical line, so I think it's safe to say he's a f**king idiot.

Posted by: ratdog on January 3, 2006 at 11:37 PM | PERMALINK

Posted by: Advocate for God on January 3, 2006 at 4:06 PM: Maybe you should talk to the tax-cutting GOP Congress that encouraged all that wild speculation in the stock market after 1998 or so.

AfG, was there any President's signature on any of that legislation?

Posted by: dkrypt on January 4, 2006 at 11:48 AM | PERMALINK




 

 

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