Bush prepares to meet economic team; Advisers cross fingers that tax cuts will do the trick

CBS Marketwatch ^ | 08-10-03

[Brian S]

WASHINGTON (CBS.MW) -- When President Bush's economic team descends on his Crawford, Texas, ranch on Wednesday, odds are that each will be carrying some sort of lucky charm, four-leaf clover or rabbit's foot.

With the 2003 White House economic agenda substantially in place after Bush signed the latest $350 billion tax cut into law last month, his advisers can only wait, keep their fingers crossed and watch to see if it helps the U.S. economy regain its footing.

Economists do expect a strong pickup in the second half of the year, in part due to the tax cut. But so far, "it's a hope and an expectation -- not a reality," said Sung Won Sohn, chief economist at Wells Fargo.

Analysts said White House officials have little ammunition left to help the economy, in any case.

"I don't think there is anything left on the shelf that would change things over the next 12 months," said Greg Valliere, chief strategist at Charles Schwab's Washington research unit.

"Just about everything that could improve the economy has been done," he said.

Charles Gabriel, director of Prudential Securities' Washington research unit, sounded a similar note. "They have used all the old economic policy tools as aggressively as they can," he said, adding that at this point "they are biting their nails."

The six-member Bush economic team consists of the three Cabinet-level officials -- Treasury Secretary John Snow, Labor Secretary Elaine Chao and Commerce Secretary Don Evans -- plus three White House advisers: White House budget chief Josh Bolten, White House chief economist Gregory Mankiw and top economic strategist Stephen Friedman.

Showing he cares

Bush and his advisers will begin the effort to convince the public that things are indeed turning around, while in the same breath, showing compassion for workers whose factory jobs have been moved overseas. The economy has been hemorrhaging manufacturing jobs for months now.

"We're beginning to see hopeful signs of faster growth in the economy, which over time will yield new jobs. But the unemployment rate is still too high," Bush said during a Rose Garden news conference before departing for his summer vacation.

A poll released last Thursday indicated Bush is showing some political vulnerability as the economy moves into the forefront over the war in Iraq.

The survey, by the Pew Research Center, found that six-in-10 Americans now say the economy -- not terrorism -- is the most important presidential priority.

"Perceptions are funny. Convincing voters he was engaged in making the economy better was a problem for his father and I think it could be for him as well," said Valliere.

But this could lead to more criticism that the current Bush economic team is taking its orders from White House political aides.

The New Republic, a conservative Democratic magazine, has published a stinging criticism of Snow and noted that when the Treasury secretary meets with top Bush political adviser Karl Rove, it's in Rove's office.

Sohn of Wells Fargo said the Bush team could discuss specific steps to lower the nation's unemployment rate, which hit a nine-year high in June before slipping a little last month.

White House spokesman Clair Buchan said the economic team meeting is intended "to review where the economy stands."

It might be added that where the economy stands is at a crossroads.

Greg Robb is a senior reporter for CBS MarketWatch based in Washington.

[BushCountry]

Actually, I don't like the H1B visa program. However, now I am really confused by your agrument. 94,000 are unemployed, yet 400,000 - 500,000 are H1B visa holders. If we subtracted the 94,000 who are unemployed from the low number of 400,000 (which provide full employment for programmers including the completely incompetent ones. There is always a certain percentage), that means that 306,000 H1B visa would still be needed by American companies to do busy effectively. So, is the argument a reduction, which is happening, or an elimination?

[familyofman]

"Just about everything that could improve the economy has been done," he said.
Let's see, we've increased deficits, opened borders, helped companies relocate jobs overseas, inflated the money supply, reduced spending & entitlements nah, that'll never work.
When we're all asked to "close our eyes, click our heels 3 times, and say The ecomomy is better, the economy is better" - then you know we're in doggy-doo.

[BushCountry]

Let's click our heels together and say, "the sky is falling, the sky is falling, the sky is falling!"

[harpseal]

Thank you for your reasearch I am a little bit ill this morning and I am unable to get evey piece of research available. But as I said not one H1B visa should be allowed in the USA given the numbers of unemployed programemrs in the USA.

[harpseal]

Let's click our heels together and say, "the sky is falling, the sky is falling, the sky is falling!"

Since no one has said teh sjky is falling and sincethe only one whho seems likely to click heels to gether is a supporter of the People's Republic of China why don't you do it al by yourself or with your Democrat Chinese controler.

[BushCountry]

Funny, you brought up how great China was, I dispelled the myth.

[harpseal]

Actually, I don't like the H1B visa program.

Then why did you try to defend it.

However, now I am really confused by your agrument. 94,000 are unemployed, yet 400,000 - 500,000 are H1B visa holders.

The 94,000 number does not include those who have found jobs flipping burgers.

If we subtracted the 94,000 who are unemployed from the low number of 400,000 (which provide full employment for programmers including the completely incompetent ones.

There is always a certain percentage), that means that 306,000 H1B visa would still be needed by American companies to do busy effectively. So, is the argument a reduction, which is happening, or an elimination

Actually once we are at full employment then we could possibly allow H1b visa holders in a very limited numbers for a very short duration. But it would be far better to bring in entry level people with recent degrees qualifying them to start. Of course these would be Americans.

It also seems you have no problem with a percentage of CEO's who are unqualified or do you say that the percentage only applies in a technical disipline.

If you had not defended teh H1b program this would not have started.

[harpseal]

Funny, you brought up how great China was, I dispelled the myth.

I merely brought up the fact that China was and is engaged in predatory trade parctices against teh USA and that that nation has had an 8% growth rate fueled by american imports of Chinese manufacture.

I have no desire to be in China obviously and I did not seek sympathy for the poor Chinese. Since we have a major problem in the current account deficit and the largest one one defict in teh current account is whith China taht is the issue. Perhaps you have not been following the discussion on this thread or maybe you are tooo disingenuous to admit when called on it but the issue that is being discussed is structural problems in the US economy. So far you have contributed nbothing to the discussion except some projections which we have no reason to have any confidence in. When you are ready to discuss relevant facts please let me know until then I shall dismiss you as just another lying Free Trade advocate who can not even admit to the positions you have taken.

[Starwind]

I hadn't assumed you liked the H1B program and I wasn't arguing, just trying to shed some light on the visa stats.

Not all H1B visa holders work in IT (some work in biomed, some finance, etc). So you can't compute an IT-specific labor 'shortage' by subtracting 94,000 from 400,000.

You'd have to subtract the full high-tech, finance, etc unemployment from 400,000 to compute a labor shortage/surplus, but then again the 400,000 have accummulated and been extended over years on visas that are supposed to be temporary.

If you subtract the high-tech/finance workers who lost their jobs starting in, say 2001, from the visa's issued starting in 2001, clearly the jobs lost exceed the visas issued, and there is not a current or ongoing labor 'shortage'.

[JNB]

Actually you did not dispell anything. Chinese economic growth will be 8% this year. mostly due to "trade" with the US. Yes China is dirt poor, poor enough that there is a massive Chinese workforce that will very much so undercut US workers in terms of costs.

[BushCountry]

It is a tough one to figure out. I have read several articles and posts on other bulletin boards that state that these employees are extremly productive and contribute a tremendous amount to the employers (making our businesses more competive overseas).

Are the unemployed American programmers better or less qualified on average? Does the United States truely have the labor pool to completely eliminate H1B visas and should we do it nationally? By that, are there some areas of the country that are I/T poor? If the economy recovers (my guess), will we need to reinstate the H1B visas?

For me, I think we should freeze the program until the unemployment numbers go down. I would like for it to stay in place to help supplement our workforce if needed. These programmers are not evil, they are dedicated workers who contribute with their brilliance.

[BushCountry]

Not only freeze, but eliminate the extensions unless companies can prove beyond a shadow of a doubt the local workforce can not provide the labor.

[Starwind]

Are the unemployed American programmers better or less qualified on average? Does the United States truely have the labor pool to completely eliminate H1B visas and should we do it nationally?

Speaking only to the narrow sectors of IT and computer product software development and support, yes the US labor pool can easily fill the job requirements.

BTW, the best developers I've seen are the Russians.

The Indians tend to overinflate their abilities because of a lack of experience. They know how to program at low levels but they do not know what to program and their designs and architectures bespeak their lack of real-world product experience. They also tend to specialize in installation and customization of major products like SAP and Oracle Apps, which are labor-intensive projects. The Indians edge here is not knowledge, but voluminous cheap hours.

But developing and supporting a multiplatform systems level software product is vastly different from doing a masters thesis on the Java virtual machine.

[oceanview]

and that is exactly what is happening. the entire big cap US tech industry will consist of only upper management inside the US, and all foreign workers outside the US. And that's the endgame, it will take 10-15 years, but everyday it moves in that direction 1000 employees at a time. Just like manufacturing.

Don't know much about Owens, let's see if he understands what is happening is isn't paid off by the corporate lobbyists.

[riri]

only upper management

What would be considered upper management? CEO, CFO, Director of Finance and Corporate Controller??

[oceanview]

Its way more then IT. XRAYS and MRI techs are going to India. backoffice insurance operations, Goldman Sachs is sending 1000s of financial service workers, customer support call centers. Basically any job that can be done by someone sitting in front of a computer screen.

So its way more then 2.2 million. The threads with articles are all here on FR. Start reading.

Bush won the last election by 537 votes, take a look at the job loss figures every month, last month it was 44,000. Wake up.

[samuel_adams_us]

I have good news in regard to that, Owens is his own man, does what's right, not what he is paid to do, that's why he is still the governor here, we love him.

[oceanview]

yes, those are good examples. and the large support staffs around them.

[webheart]

You should have said an economy in declined combined with a massive terrorist attack that wreck havoc on almost every sector.

I have no problem with this statement.

Well, I have a problem with that statement: It's WROUGHT, not wreck, that is the past tense of the word wreak. Wreck is what you do with a car, wreak is what you do with havoc. ARRRGH!

[samuel_adams_us]

This is going to stop soon, Bush can't afford to let it go, I am having my 2k dinner with him tonight and trust me he is going to get an ear full as well as the democrats will be lining the streets here with signs that read, where did my job go, india? There are thousands planning on doing that, dems and repubs together. Lowry AFB hasn't had this many people on it since back in the late 1960's.