Posted on 11/17/2005 6:19:20 AM PST by SoFloFreeper
WASHINGTON (AP) -- Output at the nation's factories, mines and utilities rose at the fastest pace in 17 months in October, posting a solid rebound from the devastating Gulf Coast hurricanes. The Federal Reserve reported that industrial output was up a healthy 0.9 percent last month as refineries and oil and natural gas platforms began production again after widespread shutdowns caused by hurricanes Katrina and Rita. Last month's increase followed a 1.5 percent plunge in September, which had been the biggest one-month drop in industrial production in more than two decades.
You can't deny that the business cycle was given a shot in the arm from the tax cuts.
Correct, and Scumbag happened to be president when the pending Y2K preparations and the mega-billions needed worldwide to comply happened.
Scumbag should receive neither credit for that nor criticism for the March 2000 stock market crash. Bush should receive neither credit for an economic indicator today nor blame for the recession.
Presidents have little to do with economic trends.
There's a lot of people have to replace EVERYTHING from underwear to automobiles to homes. Invest in refrigerator and freezer manufacturers. You ought to see how many folks threw them out after power being off for several weeks.
Eva, yes I can deny that because it is not true. You probably do not know what exactly the business cycle is--I take it that you have no formal background in economics.
Spending was given a boost by tax cuts, not the business cycle. Business cycles, by their very name, are CYCLICAL, which implies longer trends pre and post-tax cuts. Also, as I said in previous posts, the USA represents only 20% of the world economy. Even a tax cut in the USA can't prevent a recession if 80% of the rest of the world were to have tax increases (hypothetical). The fact is the global economy has more sway over the global business cycle than what a tax cut has in a nation (the USA) that represents only 20% of the world economy.
Tax cuts are a good thing--we agree. But it is not true that "a tax cut gives the business cycle a shot in the arm".
I do believe the economy is quite healthy presently, but this report does NOT show that. It's showing that industrial production is still down from before the Hurricanes, hardly impressive.
Wrong.
Following a recession, capacity is not usually a problem. Just the opposite--too much capacity. POTUS can not have an effect on anything in the Index of Coincident Indicators like industrial production. POTUS has some input into the future leading indicators and, assuming has been in office for a few years, has some influence on lagging indicators, but the POTUS has next to nothing to do with a coincident indicator such as industrial production.
Once again, the issue is moot, as the business cycle carries the greatest weigting factor and dwarfs any possible input of POTUS.
The fact is Clinton recieved all credit and no blame. W should receive same from the hypocratic MSM.
All that may be true. It doesn't matter.
I still think it's Bush's fault.
True, but presidents set the agenda. Clinton had a booming economy in spite of an anti growth agenda. He presided over a bubble.
Bush set the agenda to pull the economy out of recession by proposing investment and wage tax cuts that had some meat to them. Not just some rebate tossed into the pile.
In the case of Bush's tax cuts, the economic trend can be traced directly to them. Look at GDP growth beginning with 2003 up to date and look at GDP growth prior to 2003.
But the fact remains that the business cycle itself has far more to do with the current state of the economy than anything any president does or does not do.
The Federal Reserve can (and usually does) have everything to do with the state of the economy because it affects business cycles by mananging short term rates and bank reserves but it is still the president who appoints Fed governers and the chairman.
In terms of value in dollars, the U.S. makes more today than it ever has it its history. The difference is in two places. One, what companies are making things, and two, how many people it takes to make a thing.
Today, it takes far fewer auto workers to build a car than it did in 1950. And cars built in America does not mean Detroit and the "Big Three". It means the sunbelt and Toyota, Honda, BMW, Mercedes, and Hyundai.
Also, manufacturing does not just mean motors and things with motors. It also means chips and things with chips. And many of those chips (and most of the most complicated chips) are manufactured in America. One of the great myths out there is chip manufacturing is all moving to Taiwan. The reality is only the U.S., Japan, Europe, and Israel can fabricate sophisticated semiconductors such as high-end microprocessors.
People wrongly associate manufacturing jobs with manufacturing capacity or manufacturing output.
And the "manufacture" (that is, programming) of software is not included in manufacturing output, nor is the sale of software to overseas customers included in trade deficit. Only the value of the CD-ROM (assuming it is even shipped by CD-ROM) and printed manuals are included in foreign trade numbers. So billions of dollars of Microsoft, Oracle, and IBM software created in America by thousands of American engineers is not included in the trade numbers.
Similarly to the myth about semiconductors, all software programming is not moving to India. Software creation is as much an art as a science, and artists tend to come from free societies. Because of this, new, innovative software, and highly complicated software will continue to to come from the U.S. and Europe. Low-level software such as device drivers will be shipped overseas.
You are so right! Most of the companies of the 1990's tech boom were created during the 1980s. The economic recovery of the 1980s created the environment for the innovation and economic boom of the 1990s.
You're right. The current boom in industrial production is due to the Clinton policies that were in effect in the 1990s.
Al Franken
and the bubble's about to burst! (The sky is falling!)
3:35 [$INDU] Dow industrials set for highest close in 8 months
No, you are going in circles. I am telling you the straight economic facts of life.
Of course you're right that the state of the economy has everything to do with the business cycle, just as the business cycle has everything to do with the state of the economy.
No, you are incorrect. Each is not the cause of the other. The business cycle iteself carries the greatest weight of all reasons for the current state of the economy. The USA's economy playes second fiddle to other factors that dictate the current state of the economy, since our economy is part of the world economy and the business cycle is global in nature.
The Federal Reserve can (and usually does) have everything to do with the state of the economy . . .
Simply not true.
because it affects business cycles by mananging short term rates
No, the Fed does not manage short term interst rates. Those who say that imply that the Fed makes short term rates go up and down. The Fed is REACTIONARY. The Fed REACTS to market rates and then adjusts rates to reflect what is already happening in the market. The reason why rates go up and down is due to market forces, then the Fed reacts to market forces by adjusting the Fed Funds rate or Discount rate based on what they see happening in the market.
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