Posted on 01/05/2006 7:17:03 AM PST by Willie Green
For education and discussion only. Not for commercial use.
When The Wall Street Journal hires its editorial writers, is selective economic aphasia listed as a job qualification? We at GLOBALIZATION FOLLIES aren't trying to be flip here. But it's the only possible explanation other than flagrant intellectual dishonesty for editorials like the one published just before New Years on Americans' holiday spending.
Determined to show that the free trade policies it has pushed so zealously have produced only benefits for the U.S. economy, and not sagging living standards (among other costs), The Journal made clear its ability to tune out economic reality in a brief titled "Cheers." According to Journal editorialists, rising holiday sales figures belie the Democrats' efforts "to throw soot on the growth story by constantly saying that median incomes are falling." As the editorial condescendingly explained, "Judging by these holiday sales, somebody must have money."
Of course, it's possible to make this argument with a straight face only by forgetting a little economic and financial concept called debt. Especially relevant for any discussions of holiday shopping, the latest government statistics show that the second and third quarters of 2005 represented the first two consecutive quarters of negative personal savings since quarterly data started being released in 1947. The third quarter of 2005 was also the first since 1947 when net national savings as a whole went negative. Yes, somebody has to have the money to finance the nation's ongoing shopping spree. Increasingly, however, it's not Americans, but their foreign creditors.
Actually, this information was staring Journal editorialists in the face even as they were writing their copy. For what was the source of the data that inspired this paean to cure-all powers of free trade? A credit card company.
(Sources: "Cheers," The Wall Street Journal, December 28, 2005;
"Table 5.1. Saving and Investment [Billions of dollars] Seasonally adjusted at annual rates," National Economic Accounts, Bureau of Economic Analysis, Department of Commerce)
"I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."-- President Andrew Jackson - (1824)
Snow urges Congress to raise debt limit"Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of plutocracy."
~ Theodore Roosevelt
ping
Pat for 2008!
-- President Andrew Jackson - (1824)
Demagogue and proto-moonbat.
Personally I've had a record-breaking year economically and work for a manufacturer of technical equipment. I also do some consulting and have pretty much had to turn away jobs. YMMV.
"with home ownership at record levels"
- and home foreclosures at record levels
- and the percentage of home ownership (i.e., how much of the house you actually own) at record low levels
"Home ownership" is an oxymoron in this country. Most people own only a portion of the home, the bank owns most of it.
When it comes to economics, the WSJ hits the bullseye, as usual.
Follow the money to see who benefits.
(Clue: It ISN'T the American Middle Class taxpayer.)
WASHINGTON LOBBYING SCANDAL: Spotlight turns to those who accepted money, favors
Free trade is bad because Abramoff is a criminal. That is logical?
I doubt many purchases of Chinese goods or Lexus automobiles are a result of Abramoff's crimes.
I'm willing to bet that the Journal (in an editorial? titled "Cheers") used more than retail sales figures to argue the economy is doing well.
Huh? Lobbyists passing money around to pols in Washington D.C. is not free trade.
According to Journal editorialists, rising holiday sales figures belie the Democrats' efforts "to throw soot on the growth story by constantly saying that median incomes are falling." As the editorial condescendingly explained, "Judging by these holiday sales, somebody must have money."
Real per capita consumption is a better measure of rising incomes and has increased at an average annual rate of 2.3% during the past 30 years. Per capita consumption in the U.S. has doubled since 1975. Maybe Tonelson can explain how each American's real consumption could have doubled if real salaries were not growing.
The typical household today has a disposable income higher than any other time in history, and when taking into account all forms of benefits that workers now receive, compensation to workers is about 27% higher in real terms than 25 years ago. Workers earn in less than four days a week what their parents earned in five, and they make in three days on the job what their grandparents earned in five.
Of course, it's possible to make this argument with a straight face only by forgetting a little economic and financial concept called debt.
From David Malpass at NRO: Response: It makes sense for debt (and assets) to grow faster than GDP in a flexible, financially innovative economy. Faber’s 300 percent figure includes corporate debt, much of which is cascading (for example, an auto buyer borrows from a financing company which borrows from the credit markets). Other causes of increasing U.S. debt are low interest rates and the increase in home ownership. The issue is not so much the level of debt but whether sufficient capital formation is taking place in a market-based way to maintain growth. I think it is.Assertion: Credit-market debt is too high. “Total credit market debt as a percentage of GDP rose from around 120% in 1980 to over 300% at present,” according to Marc Faber’s April 20 Gloom, Boom and Doom Report.
The third quarter of 2005 was also the first since 1947 when net national savings as a whole went negative.
The official savings rate measure does not consider economic gains from patents, innovation, capital gains or land appreciation. Since 1997, Americans have cashed in more than $3.5 trillion in capital gains.
Yes, somebody has to have the money to finance the nation's ongoing shopping spree. Increasingly, however, it's not Americans, but their foreign creditors.
The fact that Americans have per capita assets of $89,800 makes us the top saving country in the world. (Japan is second at $76,900 per head.)
Tonelson is no different than Krugman or Paul Craig Roberts in that all of them intentionally ignore the facts to advance their anti-trade/anti-Bush agenda.
Every revolution has first excecutied the rich and then, ultimately turned on the whiney, self-absorbed middle class. There has never before beeen one worse than the one we have.
And the multinational trade agreements promoted by the Bush Administration aren't free trade either.
"We are infinitely better off without treaties of commerce with any nation."
--Thomas Jefferson to James Madison, 1815.
"I hope we shall... crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country."
--Thomas Jefferson to George Logan, 1816. FE 10:69
How is it then that the average American household has about 57% equity in their home? Is 57% how you define portion?
Abramoff is just the tip of the iceberg.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.