Trying to defeat Bush on the economy

Union Tribune ^ | June 6, 2003 | Joseph Perkins

[Jimbaugh]

http://www.signonsandiego.com/news/op-ed/perkins/20030606-9999_mz1e7perkins.html

Joseph Perkins
THE SAN DIEGO UNION-TRIBUNE

June 6, 2003

	Trying to defeat Bush on the economy
Howard Dean, the former Vermont governor, the Democratic presidential hopeful, has given away his party's dirty little secret: They are praying for an economic downturn between now and November 2004. They reckon it's the only circumstance under which they can deny President Bush a second term in the Oval Office, given his favorable standing with the American people. So they are attacking the Republican's economic policies. "If we re-elect this president," warned Dean, testing out a Democrat campaign theme, "we'll be in a depression." Unfortunately, the economy is not cooperating with Dean and his fellow Democrats. Just this week, in fact, Federal Reserve chairman Alan Greenspan said he sees indications of a "fairly marked turnaround" in the nation's economy. Indeed, over the last month, the bulls have returned to Wall Street. The blue-chip Dow Jones industrial average is at its highest level in nearly six months. The broader Standard & Poor's 500 index is at its highest level in nine months. And the technology-laden Nasdaq Composite index is at its highest level in nearly a year. Investors have returned to the stock market because they see harbingers of better economic times to come. Like the stronger than expected growth for May in the U.S. service sector, which makes up 80 percent of the nation's economy. It was the second straight month of expansion, according to the Institute for Supply Management's index of non-manufacturing activity. There also was the strong May reading on regional manufacturing. The National Association of Purchasing Management-Chicago said its monthly index rose to 52.2. When the Chicago PMI tops 50, it signals expansion in the manufacturing sector. The nation's housing market continues to expand, as sales of new homes rose 1.7 percent in April to a 1.03 million-unit annual rate. That annualized rate is at least the third-highest level ever recorded, according to the Commerce Department. Meanwhile, the American people are increasingly optimistic about the economy. In fact, the University of Michigan's closely watched consumer confidence index rose in May to its highest level in nearly a year. Of course, not all the leading economic indicators are positive. Most troubling, perhaps, is that the four-week moving average for first-time unemployment claims has remained above the 400,000 mark – the level that signals sluggish growth in the labor market – for the past three and one-half months. Dean must be absolutely delighted by that news. Because he claims that President Bush has so mismanaged the economy during his watch that 2.5 million jobs have been lost. He also suggests that if the Republican is returned to the White House, the American people should expect the economy to shed a total of "eight million jobs in eight years." Yet, there are signs that the longest post-World War II labor-market slump has just about bottomed out. Layoff announcements by U.S. companies fell last month to their lowest level in two and one-half years, according to Challenger, Gray & Christmas, the Chicago job placement firm. And the American job machine is almost certain to get a boost from the latest tax cuts signed into law by President Bush, and stridently opposed by Dean and most of his fellow Democrats. The latest round of cuts will put an extra $160 billion into the pockets of working Americans between now and the end of next year. When combined with the two previous tax cuts President Bush got from Congress – which have yet to take full effect – the U.S. economy is ripe for robust growth. The party of Dean is hoping that 2004 will be a repeat of 1992: That a Republican president named Bush sees his war-time popularity wane as the national economy wallows in recession. And that a Democrat rides the bad economy into the White House. That's why Dean and his fellow Democrats really oppose the Bush tax cuts. Not because they are so concerned that they will increase the deficit. Not because they are so outraged that the rich supposedly will benefit most. But because they fear that the tax cuts truly will produce the strong economic growth President Bush promises. Perkins can be reached via e-mail at joseph.perkins@uniontrib.com.

[Sonny M]

Bush has used Keynesian arguments plenty of times for his tax cuts.

To be honest with you, I never liked this idea of his using some of Keynes saying or arguments, especially since Bush does nor follow not believe in Keynesian economics. He is more or less from the Henry Hazlet/Milton Friedman school, which Adam Smith would be the founder of.

Keynesian economics is simply a glossier more advanced version of marxism without alot of the mumbo jumbo, but concept wise, hits the same socialism points.

[Sonny M]

I admired Tom Delay's courage to state that a child tax credit to people that don't pay taxes in the first place is akin to a welfare program.

I agree, since it is the truth, the problem is, is that there is a way to say it, a way to do things, and a way to get more of what you want when you leverage. He should have said something to the effect he would consider it, and would have done it, but to many people didn't want the added cost in the overall bill.(This is actually true, but not on the house side, it was the senate side that actually took this out) This way you knock some of the moderate republicans for not supporting a bigger tax cut and you hit democrats.

He did say he would consider it, if it was part of another bigger tax cut, this was wise, and he could have stuck with that, that if the democrats want it, then they will insert it into another tax cut bill. Make it another big tax cut, but make this the centerpiece, then hammer away at democrats for being cruel to the children. Its called politics.

[Sonny M]

I believe in every tax cut there can be ---but I'm not sure how tax cuts will help American jobs since everyone will buy products made in China with their tax refunds. I'd buy American products if I could find any to buy.

This is in theory, I am not saying its true, but bear with me, if people go to stores and buy made in china products, it would still create american jobs, somone american drives trucks that deliever these things, somone american has to be the person who actually sells them, and if these chinese products are selling like crazy, then you hire more salespeople, more staff, means more managers, and if you own stock in the store, because your profits are going up, your stock is worth more, and you can sell it and spend your money in a store, where an american will sell you another chinese product, right down to the cashier.

In theory, the manufactuering part of a products phase is not as important economically, as the sum of the other parts total, in terms of jobs.

I.E. you make it, thats one job, but somone else delivers it, somone else sells it, somone else comes up with the marketing campaign, somone else does all the placements in the ad world, and the real money is in research and development, etc.

Again, not saying this is true, but its part of the theory of america being more of a "service oriented economy".