Posted on 10/17/2003 9:50:12 AM PDT by NYC Republican
Ever wonder why all the doom-and-gloom economic pronouncements you hear in the media, and from liberal politicians, don't square up with the America you see around you — an America in which the economy has turned the corner and is growing again? The answer is that most of what you hear about economics is a lie, usually papered over with impressive-sounding jargon and statistics designed to intimidate you.
Jerry Bowyer's new book, The Bush Boom, is a sorely needed dose of simple economic truth. And in this case, the truth happens to be very good news indeed.
Read through a couple of this book's short, digestible single-topic chapters — most built around a compelling chart or table — and you'll quickly discover a couple of amazing things. First, you'll realize that you really can understand economics. Bowyer makes it simple — and fun. Second, you'll realize that things are nowhere near as bad as the media and the liberal politicians are telling you. In fact, Bowyer's work shows that we could be on the verge of an historic boom.
Here's a simple example. How often have you heard the media wail about America's "record trade deficit"? Do the talking heads fretting about it even know what a trade deficit is? Probably not, but it's called a "deficit," so it must be bad. Or is it? With one simple, devastating chart and just a couple-hundred words, Bowyer shows that a trade deficit isn't bad news at all — in fact, a growing trade deficit is a good sign, something that has historically been associated with periods of rapid GDP growth. Narrowing trade deficits, on the other hand, have been associated with slower growth.
How about payroll statistics showing that even though GDP is growing this economic recovery isn't generating any new employment? Bowyer tells the dirty little secrets of how the Department of Labor calculates jobs numbers, and shows that they fundamentally don't make any sense: Some of the numbers show that employment has been increasing, while others show that unemployment has been increasing.
Which numbers should you trust? Maybe neither. Indeed, one of the lessons of The Bush Boom is that most economic statistics are so imperfect and subjective as to be nearly worthless. But in this case, if you had to choose between one DOL jobs survey that canvases large corporations and government agencies, and another DOL survey that canvases real people (capturing self-employment and traditional employment in small and new businesses), wouldn't you choose the latter? Of course you would. Any sane person would. Yet the media persistently quote only the former.
Bowyer also reveals how simple economic reasoning can be used as an antidote to liberal political arguments — even when those arguments don't seem to have anything to do with economics. How often have you heard the smear that the invasion of Iraq was "all about oil," that it was staged by the Bush administration for the benefit of Texas crony capitalists? Bowyer dispatches that fantasy with a simple economic truth:
... the Dow Jones Energy Index (which is well represented by oil and natural gas companies) significantly underperformed the S&P. In the past year, the energy index has fallen 22 percent, which is equal to a $122.6 billion loss in market capitalization. What can one say? If Bush really is in the pocket of the Texas oil interests, this makes him about the worst crony capitalist in history. Or maybe, just maybe, the war in Iraq was about something else.
Bowyer's arguments about federal budget deficits are not as sharply focused nor as persuasive. He offers some empirical evidence against the familiar "Rubinomics" theory that federal borrowing crowds out private borrowing and raises interest rates, but he misses the more compelling argument: higher taxes, the alternative to borrowing, obviously have worse and more immediate anti-growth effects. And while Bowyer argues that high deficits are necessary and historically precedented in times of war, he doesn't point out that today's deficits are not caused primarily by war spending, but rather by a slowdown in economic growth.
But those quibbles aside, the good news is that the very boom that Bowyer predicts and argues for so persuasively will be the thing that cures the deficits.
When you've had your fill of jargonized econo-dogma designed to make you suicidal (and vote Democratic just before you slit your wrists), treat yourself to a helping of Bowyer's plain-speaking optimism. And here's the best part: The more people who read The Bush Boom, the quicker the boom will arrive. Optimism and truth work that way, you know.
And from the Serial Doom-and-Gloomers right here....
No more than you're dreaming that the economic situation is not improving.
President Bush doesn't need to get back the jobs that were lost. Polls show Americans blame 9/11, not him, for the economic woes. If next summer/fall voters perceive the economy is improving, Bush cruises to re-election.
Don't kid yourself. Unemployment of 6% used to be called "full employment" by economists. Reagan was re-elected with unemployment of over 8% (and won a couple more EC votes than he needed). Look at where things have gone over the last six months and project it out a year? Things will look pretty good for election season.
Not really. I'm saying that the number itself is historically quite low (it will be hard to spin as "terrible performance" if it hasn't changed) AND I'm saying it seems likely that it will move lower over the next year. Unemployment figures lately have been quite positive and GDP growth estimates for the next 12 months exceed 4%.
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