Skip to comments.Bush Boom Continues
Posted on 12/14/2007 12:06:08 PM PST by Perdogg
Following last weeks solid jobs report, the New York Times got back to its Bush-bashing recession mantra with the front-page headline: Slowing Growth and Jobs Seen as Ominous Sign for the Economy.
This chant has been going on for quite some time. Doom and gloom from the economic pessimists has been political sport for seven years, even though the Bush boom just celebrated its sixth anniversary. The current expansion is now in its 74th month 17 months longer than the average 57-month business cycle since World War II.
(Excerpt) Read more at author.nationalreview.com ...
Jobs are an ominous sign for the economy? The latest jobs report says America is still working, with 94,000 new corporate payrolls in November and a rolling average of 103,000 job increases for the past three months. Along with a 4.7 percent unemployment rate, there is no evidence of a recessionary collapse in jobs. Even the household job count, which picks up small businesses, surged 696,000 in November, with a 303,000 average gain over the past three months.
Jobs are paying more, too. Worker wages are rising 3.8 percent over the past year, a full percentage point ahead of inflation. In fact, growth in total compensation for the entire workforce is rising at a 3.3 percent pace after inflation. University of Michigan Professor Mark Perry, writing in his Carpe Diem blog, says this is the best performance in seven years.
But wait, theres more. U.S. productivity surged 6.3 percent in the third quarter, its best pace in four years. A big rise in output per person is good for profits, growth, and low inflation. Business inflation has come down from 3.5 percent a year ago to 1.5 percent today. U.S. household net worth just scored a new record high of $58.6 trillion, with financial asset gains outpacing the drop in real estate values.
According to Prof. Perry, household wealth has increased 43 percent in just the past five years, despite $100 oil, $3 gas, and the sub-prime infection. The stock market, which is probably the best leading indicator of the future economy, appears just as resilient. Despite these same challenges, it is overcoming a brief correction and looks set to rise by roughly 10 percent this year.
Yes, economic growth may indeed pause to roughly 2 percent in the next couple of quarters, the result of two years of overly tight money from the Federal Reserve and the ensuing upturn in sub-prime defaults and foreclosures. You can call it Goldilocks 2.0. But you cant call it a recession.
Even the housing market has its share of positive developments. Mortgage refinancings are up nearly 70 percent as mortgage rates on fifteen- and thirty-year loans are down nearly 100 basis points. Such events may help cushion the plunge in home sales and will eventually stabilize prices.
Meanwhile, Treasury Secretary Paulson has put together a modest refinancing safety net that grants poorer homeowners some breathing room in which to modify and work-out jumps in low teaser rates. The Paulson plan would shift borrowers into FHA-insured refinancings, which can be packaged by Ginnie Mae (the Government National Mortgage Association) into new loan pools that will be bought and sold by investors. Its a relatively small plan that could help a half-million borrowers, and it will preempt Democratic efforts to spend billions on direct subsidies or bailouts.
The Fed can aid this plan on Tuesday by getting its target fed funds rate down by 50 basis points. This will take the pressure off adjustable-rate-mortgage increases. Whats more, the central bank can help unclog frozen short-term financing problems in the commercial paper market in New York and the interbank LIBOR markets in London. If businesses cant get short-term loans, the economic expansion will be seriously threatened.
The Fed also must undo the inverted Treasury yield curve whereby the 4.5 percent fed funds rate remains well above the 4 percent ten-year Treasury rate. This situation has prevailed for 18 months; unless its fixed immediately it represents an illiquidity threat that increases the odds of recession. A 3-month Treasury bill around 3 percent is pointing the way for the fed funds rate.
Righting the yield curve and expanding the monetary base by at least twice its current 2 percent growth rate would also provide new oxygen for the low tax rates on investment put in place over four years ago. The incentive effect of these supply-side tax cuts has been smothered by an overly tight Fed. But if Bernanke & Co. move aggressively, business investment and capital formation will soon pick up speed.
This sort of fiscal and monetary coordination will continue the Bush boom for years to come. Though mainstream media outlets will never admit it, President Bush has kept America safe and prosperous. But history will eventually judge him in a more kindly light.
That’s not possible. Everyone knows we’re in a recession. The economy is collapsing. The jobless and homeless are everywhere. It’s the worst Christmas buying season EVER. Bush is the worst president since Hoover. We need the dems to rescue us!
The NYT is not the national newspaper of record. Its not even the NYC newspaper of record.
Bush Boom Continues, so is the illegal immigration
Illegal immigration is down.
“The latest jobs report says America is still working, with 94,000 new corporate payrolls in November and a rolling average of 103,000 job increases for the past three months.”
That darn birth/death model is getting to be a larger and larger percent....
ok I might give you that. we just havent rounded up the ones that here now.
tell that to Lindsey Lohan
Yeah, the Bush Boom is just rolling along. One of the few things he has done right is cut taxes.
Greenspan is a stealth Democrat. He worked hard to create a recession during the end of Bush I’s first term to hlep Bozo Bill Clinton get elected.
Calm down with the alarmist babble and read....
That’s good news.
But I don’t think the statements I made are alarmist “babble”.
America is changing and the changes aren’t good for the average American. We don’t see the kind of increases in the standard of living that went on in the 1950’s and 1960’s here. We DO see a loss of American jobs overseas,
a loss of American jobs to illegal invaders at home, and a decreasing dollar (which generated the good news you referred to).
Not all of this is Bush II’s fault. I believe it started to accelerate during Bush I and Clinton’s terms. Bush II has allowed to increase even more. He is a globalist, an internationalist and a free trader under ANY circumstances.
Free trade is a good thing if both sides operate on a level playing field. And that doesn’t go on with most of our trading partners. THEIR workers have lower wages, poorer benefits, worse working conditions and polluted environments to deal with. Not to mention state-subsidized industry and protective tariffs.
We can’t compete with that without doing exactly what many businesses are doing - hiring illegal invaders. And the person who suffers is the American citizen and the American manufacturing base. In another major shooting war, we will have serious problems supplying a large military establishment.
that mustve been a lark lol
“Jobs are paying more, too. Worker wages are rising 3.8 percent over the past year, a full percentage point ahead of inflation.”
This is the first thing I see that I take issue with. I believe, along with you, that history will judge G.W. Bush much more kindly than today’s polls would indicate. I think we are fortunate that AlGore was not elected. Having said that, let me add that we know for a fact that the method of calculating inflation was changed before his time in office as a way to slow down the increase in Social Security payments, I do not believe that there has been a real increase in wages in recent years and I don’t know anyone who does believe it. Of course, this has nothing actually to do with the current administration.
No thanks to Bush.
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