For The Uneducated-The US Economy Is Strong

Posted Jan 27, 2008 by mlh in Politics | 14 comments | 254 views

In recent days, we have seen self-induced panic by self-indulgent fools yapping on and on about the "Bush Economy". It would be comical if it wasn't so steadfastly dumb. It seems that everything bad in the world is the fault of GWB.

In case no one is aware, the economy of all nations has this crazy little quirk called cycles. They cannot be controlled and they cannot be accurately predicted. It is what it is and that is that. Sure, there are some that claim to possess the Crystal Ball but, looking back in circumspect - after all - hindsight is 20-15. Would that I could predict which way the economy is going...or, anyone for that matter.

Over the weekend, apparently, some folks got together and decided to claim that there was a recession on the horizon and the emotionally weak panicked. We did see that the stock market plunged. Woe is me was the wail of the day or two and then the smart ones said to hold on. Lo and behold, the market not only recovered but GAINED 300 points on the Dow.

So much for the recession. This is an election cycle and EVERY national election cycle experiences the same stock market upsets. It is as natural as blaming GWB for AL Gore's loss in 2000. Too bad.

In the New Yorker, there is an interesting article which is a must read, especially for the uneducated. I found the very last paragraph "Rather" interesting, emphasis my own.

The paradoxical truth about the jobs numbers is that they are much better than their critics say they are but nowhere near as good as investors believe them to be. As many studies have shown, people don’t have an intuitive understanding of things like margins of error and random sampling; they prefer to focus on a single number, even if it’s falsely precise, and so end up overemphasizing the report’s headline number. Investors are also subject to the so-called “salience bias”—high-profile information is weighted heavily even if it’s flawed. That’s why market moves in response to government reports are often surprisingly big—especially when, as now, they seem to substantiate investors’ worst fears. At this point, the market is locked in a hard-to-break feedback loop: the fact that traders act as if the jobs report were definitive makes it so. A little information can be a dangerous thing.

And, that's just it, isn't it? All we have is a little information. I normally gauge the economy not by government numbers but by my local economy that can be seen and interpreted. Too many people listen to the talking heads and The Government. From learning as I have these many years, whenever The Government gets involved in pretty much anything, whatever it is they are involved with turns to schmotz in a New York minute.

Jimmy Carter's horrendously atrocious leadership skills were shown to be quite inadequate, leading to double digit inflation, double digit mortgage rates and double digit unemployment. AT the time, some mortgage rates were at 18%. The current mortgage rates in the US is hovering about 7% as an average...meaning some are higher and some are lower. This is afar cry from the Carter years.

Jimmy Carter also displayed his clearly pathetic Foreign Relations abilities by giving the Panama Canal to the Red Chinese and leaving American citizens in Iran for 444 days. I don't see GWB doing any of that.

Nevertheless, we keep hearing about The Bush Economy and how sucky it is. Let's take a look at that, shall we?

In a press release in the Dept of Treasury, Treasury Releases Income Mobility Study, we find the following:

The key findings of the study included:

* Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within 10 years.
* About 55 percent of taxpayers moved to a different income quintile within 10 years.
* Among those with the very highest incomes in 1996--the top 1/100 of one percent--only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period.
* The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
* Economic growth resulted in rising incomes for most taxpayers over the study period:
*
Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation;
*
Real incomes of two-thirds of all taxpayers increased over this period; and
*
Median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.

That settles it, then. Everybody is moving up and that is a bad happenstance. The full explanation can be found in the full pdf version here. That rotten "Bushie economy" is growing the country and we just can't have that. Amazing that people actually think this way.

In an independent study, we find this:

Summarizing, here is the progression of Americans with discretionary income:
– 1983 - 33%
– 1987 - 30%
– 1997/1998 - 52%
– 2002 - 52.1%
– 2003/2004 - 51%
– 2006 - 63.5%

In everyday language, this means that about 12% of the population went from just getting by to having money to spare in a span of two or three years. Yep, that Bush Economy sure does stink to high heaven, doesn't it?

Keep in mind that these reports are national and not each locality. There are areas in the country that will have hard times and there will be areas in the country that are booming...like my community...and yes, even the housing market. Folks around here are not stupid enough to over-extend themselves and expect the government to bail them out of their self-induced ignorance to keep up with the Jones'. On that note, it is well advised to catch up on some must reading at the Opinion Journal for some guidance to the "Bush Economy".

Stocks catapult after big losses, with the Dow erasing a more than 300-point loss to end almost 300 points higher.

Yes sir...that damn Bush Economy. Some would say that GWB did in one week what the democrats couldn't do in a year.

Crickets.

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