Mon
Apr 28 2008
01:59 pm

As you've probably heard, Barack Obama went on Fox News for an in-depth interview. He finally distanced himself from the left-wing barking moonbats and started talking some sense:

WALLACE: Over the years, John McCain has broken with his party and risked his career on a number of issues — campaign finance, immigration reform, banning torture.

As a president, can you name a hot-button issue where you would be willing to buck the Democratic Party line and say, "You know what? Republicans have a better idea here?"

OBAMA: Well, I think there are a whole host of areas where Republicans in some cases may have a better idea.

WALLACE: Such as?

OBAMA: Well, on issues of regulation. I think that back in the '60s and '70s a lot of the way we regulated industry was top-down command and control, we're going to tell businesses exactly how to do things.

And you know, I think that the Republican Party and people who thought about the markets came up with the notion that, "You know what? If you simply set some guidelines, some rules and incentives, for businesses — let them figure out how they're going to, for example, reduce pollution," and a cap and trade system, for example is a smarter way of doing it, controlling pollution, than dictating every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and oftentimes is less efficient.

Outstanding. Free markets work, and are more efficient. It's about time serious Democrats acknowledged this and started bringing the conversation back from the far-left fringe into the mainstream center with the DLC and the Blue Dogs where the business of America is business.

</snark>

107
like
R. Neal's picture

In case it wasn't clear, I

In case the sarcasm wasn't clear, I am all for business and free markets, but not at the expense of the environment, consumers, seniors, the poor, the uninsured, etc. for the benefit of corporate monopolies, etc.

I am hoping Obama supporters can explain to me how they square these remarks about letting businesses figure out how they will reduce pollution with 30 years of the coal and coal-fired power plant industry thumbing their noses at the EPA "guidelines, rules and incentives," or how they square that with sending troops to the middle east to protect oil supplies for our inefficient vehicles while the auto and oil industries fight raising CAFE standards and alternative energy research at every turn.

ATSF616's picture

Thanks for the clarification, Randy

I was a little worried for a minute.

Obama held a rally here in Kokomo IN last Friday, the first time we've been graced by a Democratic presidential candidate since RFK in 1968. Hillary is also coming Wednesday.

gonzone's picture

Lessons From Karl

Say what you gotta say to get elected, then do what you want?
A lesson from Karl and Cheney's play book.

Personally, if I were Obama, I would rot in hell before I would go on GOP TV. I think this was a mistake.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

Anonymous's picture

So much for bringing the

So much for bringing the conversation back from the far left fringe. It just went off the far left cliff this morning.

Gary Gagliardi's picture

Does Business Exist to Serve Us or the Government?

Government regulation exists solely to elicit political donations and support from one special interest group or another. The corporate world plays the same game a the unions, environmentalists, etc. simply as a matter of survival. If the social goals could be as simple as "reducing pollution" it would be great, but we have a few hundred years of political experience to see that this is never the form they take. Instead government regulation always feathers someone bed at the expense of consumers. We pay more taxes in the form of increased prices due to regulation now than we do to the government directly. The politicians don't really care as long as it keeps the political support for their incumbency rolling in.

rikki's picture

I'm yet to see much evidence

I'm yet to see much evidence that Republicans actually understand free markets. They understand economic anarchy and think it is the same thing.

Have you ever seen a Republican sit down with an economic problem, apply market principles and arrive at a solution? Hell no. They just use "free market" as an all-purpose dismissal of other people's solutions. If a Republican actually wants to solve a problem, their approach is inevitably stricter, more intrusive laws, bigger walls or more jail cells.

Factchecker's picture

Once is OK

So he sucked up a little. I'll give him the benefit of perhaps trying to make up a little for the so-called "elite" gaffe. Bill Clinton was good going against Wallace a few months back, but would he have done it that way for his own election? Would it have won over Faux viewers? Hope Obama doesn't do it again, of course. Doubt it did any real damage, though.

Speaking of the GOP and the "free market," Bush just said the anecdote to the bad economy is for Congress to make his huge tax cuts for the super rich permanent. I would agree the cuts sure have done a number on the economy since they were enacted!

RayCapps's picture

In the right circumstances, W would be right:

Speaking of the GOP and the "free market," Bush just said the anecdote to the bad economy is for Congress to make his huge tax cuts for the super rich permanent.

If you've paid attention to your Milton Friedman, you know there is ample evidence to suggst tax cuts at the highest levels and/or on corporations spur increased investment. It worked, btw, for Reagan in 80's. If you've paid attention to your John M. Keynes, you know that increased government spending can also spur economic growth (see FDR from the 30's and, especially, the 40's). W's certainly lobbied the Congress to pursue it from both angles. :-) To be fair, the economy has expanded just as rapidly under W as it did under Bill and for roughly the same length of time.

Sooner or later, though, an economy is going to contract. There's no power the president, the congress, or the federal reserve have to prevent that. Of those three entities, the president has the least influence over the economy, followed by the congress, leaving the fed as the most significant power. Of course, the chairman of the federal reserve doesn't stand for election, we can't vote for any congressional representatives or senators save our own, so we all blame the president. Rather like blaming the weatherman for a late frost or a drought.

gonzone's picture

On paying attention

To be fair, the economy has expanded just as rapidly under W as it did under Bill and for roughly the same length of time.

Oh, really?
How many jobs created under Clinton?
Now, how many under Bush?
Ha!
Oh, because the super wealthy got richer, then we've all benefited?
Hardly.
If you'd paid attention to your statistics teacher you'd know there's a great difference between the average and the mean when computing numbers and that it makes all the difference when discussing economic growth.

If you've paid attention to your Milton Friedman, you know there is ample evidence to suggst tax cuts at the highest levels and/or on corporations spur increased investment. It worked, btw, for Reagan in 80's

Please elaborate. I disagree and so did Reagan's economist, David Stockman. Trickle down economics means the poor get trickled down on while the wealthy get wealthier. That's hardly a successful economic plan for a country.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

RayCapps's picture

Oh Goody, we get to play number games!

Since anything as complicated and statistics filled as macroeconomics can be presented in such a way as to support almost any impression you choose to leave the audience - through careful selection of the points salient to some predefined conclusion, this isn't about to go anywhere. Still, in the interest of making at least a half hearted effort at sticking up for a president I despise and maybe sharing a little knowledge...

Bill Clinton came into office in January 1993. The unemployment rate for 1993 was 6.9%. Bill Clinton left office in January, 2001. The unemployment rate for 2000 was 4.0% (a figure widely equated to theoretical "full employment" by most creditable economists. GW Bush came into office in January 2001. THe unemployment rate for 2001 was 4.7%. The unemployment rate for 2007 was 4.6%. The component of these stats I'd like to draw your attention to is that 4.0% number. Economists don't believe it's realistically possible to improve on that figure in any economic system where people are free to move from job to job. The economy during the Clinton Administration achieved an amazing 2.9% reduction in what was - at that time - considered an already fairly low unemployment rate. Statistically speaking, Clinton left GW with very little room to improve on the numbers he left behind (you can't get much lower than 4% and certainly can't sustain it). Theoretical job growth was limited to work force population growth - a figure statistically stagnant given our aging population.

In other words, it's damned hard to improve upon perfection. In unemployment terms, that's what the Clinton years left behind... perfection.

Stats cited above are located at:

(link...) (that's the bureau of labor statistics. I assume that's an acceptably unbiased source of data for you).

Btw, Ronald Reagan inherited an unemployment rate of 7.6% and left behind one of 5.3%, a very respectable reduction of 2.3%.

Oh, and also btw, I'm using predidential administrations to provide a time frame, not to assign credit to any specific actions taken by Reagan, Clinton, or Bush - which was the actual purpose of my original post.

metulj's picture

Here is the trick with all

Here is the trick with all you just sketched out. The formula for how unemployment is accounted is a mutable and changing as it gets. Also, the theoretical limit of unemployment is a matter of great debate. One thing: It's a Neo-Keynesian concept (though accepted by Friedmanites and a grand hole in their whole argument) and, while thought to be 4%, there is only empirical evidence that it exists, not what its exact threshold it. That being said, the BLS is psychotic in the manner in which it reports unemployment and it complete disregards underemployment as a rule. The manner in which it reports unemployment is a complete political football. In other developed countries the manner of reportage is generally agreed upon. In our country, where such relatively meaningless numbers (on a macro scale) are used to try and win elections, it changes from administration to administration and is rarely spelled out as to how each administration is gathering and analysizing the data. Correct me if I am wrong, but I tend to follow Bob Jessop's views on this pretty closely.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

RayCapps's picture

Leaves us at an impasse.

I'm more a follower of the "Chicago School" of economics and view Jessop's antipathy toward the whole notion of a free market system with more than a little suspicion, but then Jessop is more of a sociologist than a pure economist. If we're leaving behind the world of economists and opening it up to outside thinkers, I'd be happy to admit Peter Drucker is something of a personal hero to me. His books, The New Realities and Post-Capitalist Society, have greatly influenced my own worldview.

On a totally unrelated note, are you familiar with America's New War on Poverty by Robert Lavelle? Poverty and the Underclass by William Kelso? Or Miles to Go by Patrick Moynihan? I'm sure most people with an interest in politics knows Reinventing Government by Osborne and Gaebler. My foundations in the more "practical' application of government power rests on the ideas and concepts presented in them. By philosophical bent, I really can't improve on John Locke. Ayn Rand was a heretic, and a long winded one at that. :->

As for your observations in the post, my assumption (dangerous I know) was that the data was normalized for the most current formulation based upon the surpisingly low figures reported in the mid to late 70's days of runaway inflation and the below 4% figures from the end of the post WWII economic expansion, Korean War, and the escalated period of the Vietnam War. I do recall a major change regarding the inclusion/exclusion of the armed forces some decades ago (which would account for such low numbers), but freely confess I don't follow the intricacies of the calculation... I once attempted to follow Linear Programming and Economic Analysis by Dortman/Samuelson, but the calculus went over my head way too fast and taught me my place vis a vis diving into the depths of economic analysis.

In any event, unemployment figures under 6% are generally not too shabby it seems to me. 6% to 7% is a warning sign. Anything over 7% indicates a real problem within our own borders. Given the vastly more expansive social programs of most Western European nations, their unemployment rates can go much higher without indicating a clear warning sign, or so it seems.

metulj's picture

They should close all

They should close all economics departments around the world. They basically do nothing but underpin bad policy decision making. "Look. It's true. We have a 1000-page report from The XYZ Foundation for Market Economics!" As for The Market, I have a standing offer of a C-note for anyone who can prove that such a thing exists empirically.

Ayn Rand wasn't a heretic. She was a pulp novelist who suffered from reading comprehension problems. She thought Nietzsche was an individualist. Right.

As for your assertion about unemployment, you miss my point. Citing unemployment numbers generated by the US government is like saying "Angels have 2000 feathers on each wing." Don't even bother.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

Andy Axel's picture

They should close all

They should close all economics departments around the world. They basically do nothing but underpin bad policy decision making.

See: University of Chicago. Arthur Laffer (no man in the field more appropriately and ironically named) still has people twisted into knots, believing that if you tax less, you get more revenue - despite being roundly and soundly debunked time after time after time.

It's sort of like saying you can gain weight by eating fewer calories.

But, it's one of a bunch of Republican not-so's that has a life of its own...

Others:

  • Reagan "won" the Cold War through military spending and SDI
  • Reagan cut spending
  • Reagan was beloved by all
  • Reagan proved deficits don't matter
  • Markets are more effective than governments
  • Tax cuts create jobs
  • The media is liberal
  • Outsourcing is cheaper
  • The stock market goes up when Republicans have the presidency
  • America has the finest healthcare system in the world
  • America has the highest standard of living in the world (we're currently 6th)
  • America could have won Vietnam if it wasn't for those damned dirty hippies
  • Anything bad done by the Republicans, Clinton did the same or worse

Proof positive of, if nothing else, that the GOP is masterful at the art of message discipline. Truth, on the other hand, well... not so much.

____________________________

"It's gettin' so a businessman can't expect no return from a fixed fight. Now, if you can't trust a fix, what can you trust?"

RayCapps's picture

Whoa there!

See: University of Chicago. Arthur Laffer (no man in the field more appropriately and ironically named) still has people twisted into knots, believing that if you tax less, you get more revenue - despite being roundly and soundly debunked time after time after time

That there exists a Laffer Curve has not been seriously challenged by any credible authority I know of. Its roots predate Adam Smith by hundreds of years as I recall. At some point, a government can sufficiently consume enough of the available wealth that it so constricts an economy as to yield decreased real revenues. It's the old "would you rather have 10% of $20 or 90% of $1" argument. The argument can be empirically proven, but is simple enough to illustrate using only logic. If you have a 0% tax rate, you have $0 in revenue. If you have a 100% tax rate (take all wealth), you have $0 revenue thereafter. There must, then, exist a point beyond which increased tax burdens generates fewer real dollars. Laffer only postulated the existence of such a point and that it would take the form of a bell curve, not that the USA was on the right hand side of said bell curve. You have to look to other sources for that, especially Jude Wanniski (spell check that). Feel free to beat up on Jude all you want without interference from me, btw.

Part of the Laffer argument stems from both sides taking what seems to me to be an overly simplistic view of U.S. tax policy. Our tax policy is not monolithic. We don't have a single form of taxation and we don't tax only in a single direction (income/expenditures/investments/fixed assets are all fair game in our tax code). It may be that some of our taxes are on the right hand side of the Laffer Curve while others are on the left hand side. No one, to my knowledge, has developed any solid evidence for where any given revenue stream sits in relation to the Laffer Curve. Given that economic conditions are never identical at two points in time, I don't even know where you begin to experiment with the Laffer Curve.

If you free up more money for investment, you will likely grow the economy (assuming a scarcity of capital, which is becoming an increasinly dicey assumption). Whether or not that growth results in greater net revenue depends on the Laffer Curve.

RayCapps's picture

I really should go to bed, but this is irresistable:

Reagan "won" the Cold War through military spending and SDI

The Soviet Union collapsed on George H. W. Bush's watch. If you have to credit a U.S. president, why not the one in office when it happened? Since George the Elder seems universally unloved by conservatives and progressive alike, that should get a fun response or two.

Reagan cut spending

Reagan couldn't cut spending if he wanted to. The POTUS lacks the authority. Spending in literal terms didn't decrease in his or any other post HST president's term in office (not bothering to proof that, so blast away if I'm wrong). The bulk of government spending is automatically triggered through entitlements and paying the interest on our debt. Much of the rest is required to maintaing funding for current commitments (gov't agencies, the armed forces, prisons, etc.). Congress gets together and argues over the fraction of our spending that's labeled "discretionary."

Reagan was beloved by all

Well, his electoral victory in 1984 was pretty damned impressive. But "all" implies no dissenters so obviously false.

Reagan proved deficits don't matter

Demonstrably false in economic terms and in terms of the flexibility our government has to redirect monies. Not sure where they don't matter, unless maybe they mean to the electorate.

Markets are more effective than governments

Technically a comlete sentence, but one that begs the question "at what?" before even venturing an answer.

Tax cuts create jobs

Aha! Assuming there's a scarcity of investment capital and that the tax cuts actually free up capital, this one is usually correct.

The media is liberal

Which media and as opposed to whom? To member of the Green Party, the majority of the media is far from liberal. To someone who goes to bed with a picture of Barry Goldwater over his bed, the majority of the media is liberal.

Outsourcing is cheaper

More data required. Outsourcing isn't always anything.

The stock market goes up when Republicans have the presidency

Any relationship between a given stock exchange and a POTUS is largely either coincidental or based on a specific executive order. Not a Party thing.

America has the finest healthcare system in the world

America doesn't even have the finest healthcare system in North America, though we are gracious enough to underwrite everyone else's R&D costs for pharmaceuticals.

America has the highest standard of living in the world (we're currently 6th)

A subjective judgement whose answer largely depends on your criteria and how you weight them. By most measures, we're not in first place.

America could have won Vietnam if it wasn't for those damned dirty hippies

Hogwash. The United States had no hope of winning in Vietnam because we weren't willing to risk WWIII by taking the necessary steps to do so. No ground invasion of North Vietnam, no real hope of military victory, period.

Anything bad done by the Republicans, Clinton did the same or worse

Anything? Hardly. I liked Clinton as president. He was the ultimate pragmatist. He knew better than anyone in my lifetime how to master the art of the possible. When the Dem's controlled the Congress, he got the Brady Bill he wanted and a least a compromise on gays in the military. When the GOP took control, he got NAFTA.

RayCapps's picture

Excuse my while I lift my jaw up off the floor.

They should close all economics departments around the world.

Are you really suggesting economics as a course of study is bunk? All the way back to Adam Smith? Or are you just saying that the facts and figures can be so selectively presented and interpreted in such overtly biased ways as to render the whole field of study useless? If the latter, then you may have something of a point. Of course, the same logic could be applied in greater or lesser degrees to History, Political Science, and Literature. Basically, if the field cannot be firmly established in pure mathematics or experimental science, it's all interpretive and people are going to argue from polar opposite interpretations of the same data sets.

As for The Market, I have a standing offer of a C-note for anyone who can prove that such a thing exists empirically

Are you referring to The Market in all caps to reference some singular, all inclusive entity? If so, your C-Note is safe with me. I believe we can empirically prove the existence of markets (structures which exist to enable the exchange of ownership of goods or performance of services), unless you're going to go all esoteric on me about the concept of "ownership." Markets can be more or less free (rates of exchange set by basic forces such as scarcity and utility) or more or less commanded (prices set by some near absolute power within the given market, whether a monopoly, cartel, or government).

Citing unemployment numbers generated by the US government is like saying "Angels have 2000 feathers on each wing." Don't even bother.

But this whole conversation centered on the creation of jobs over the past 8 years! You now want to deny me the use of the very statistics that support my assertion regarding the state of the labor market? I have to admit that's pretty clever. Since you have declared my evidence inadmissable to your thought processes, I concede I have nowhere left to go. I'd love to toss back a few with you sometime and get a better understanding of just where you're coming from.

metulj's picture

Are you really suggesting

Are you really suggesting economics as a course of study is bunk?

Yes. It is ignorant of a whole wealth of data about the world and willfully so. Check out Hernando De Soto's work (he's a neoliberal, but one that is willing to question the assertions of neoliberalism) and was not trained as an economist. His book "The Mystery of Capital" pissed off the global academic elite in economics to no end, by positing that there are trillions of dollars in "dark" capital in developing world economies that economists willfully refuse to acknowledge because it messes up their precious numbers.

All the way back to Adam Smith?

No. Though no economist today has actually bothered to read Adam Smith. If they had, they wouldn't use "The Invisible Hand" in the goofy way that they do. Smith admits it is just an artifice to hold place until more knowledge could be generated about its nature, then it wouldn't be invisible anymore. You know what it is? Social relationships.

Are you referring to The Market in all caps to reference some singular, all inclusive entity?

If you don't then classical economics falls apart. Its the myth behind the legend behind the lie.

You now want to deny me the use of the very statistics that support my assertion regarding the state of the labor market?

If you want to use them, please do. They certainly are authoritative, but not terribly accurate, reliable or unbiased.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

Rachel's picture

If you've paid attention to

If you've paid attention to your Milton Friedman

Honestly, I'd rather not.

Factchecker's picture

My hat's for you

Thanks for providing further evidence of the kind of Kool-Aid you drink, Ray.

Rather like blaming the weatherman for a late frost or a drought.

Kind of like the way people like you invoke Gore's Law at every opportunity?

BONUS: Why did your man Duhbya (admit it) claim that continuing his tax cuts for the extreme rich will help the economy? Our economy got screwed up after he enacted the cuts which are still in place. What are the cuts doing now that is improving things?

Double Bonus: Duhbya claimed that the price of oil 8 years ago (at what, $30/bbl?) was a result of a failed energy policy that he would remedy and would "jawbone" the Saudis to lower the price. WTF?

Triple: Did you defend Clinton/Gore's energy policy (or lack thereof) or on the economic slowdown back then?

RayCapps's picture

Totally lost here...

Kind of like the way people like you invoke Gore's Law at every opportunity?

Where, when, and how exactly did I attack Al Gore or deny global climate change? In the only discussion regarding global warming I've participated in on this board, I credited Al Gore - specifically "An Inconvenient Truth" - with waking up a lot of people. I've attacked aspects of Kyoto - specifically the gaping hole regarding India, China, and Indonesia - but I've hardly denied the existence of global warming and certainly have never attacked Al Gore. That's an unfounded charge.

BONUS: Why did your man Duhbya (admit it) claim that continuing his tax cuts for the extreme rich will help the economy? Our economy got screwed up after he enacted the cuts which are still in place. What are the cuts doing now that is improving things?

My "man" Duhbya is a shot way below the belt, and I've had to let myself calm down before attempting a civil response. My initial post on this subject began with a tongue in cheek reference to the combination of tax cuts (Friedman) and increased government spending (Keynes) before belatedly admitting the economy by most objective measures has grown during W's Administration. Perhaps you missed the little smiley face? W has led a charge to give taxpayer money to religious organizations. W has led a charge to stop stem cell research. W led a charge to a war that was completely unjustified and has consumed limited military and foreign aid resources far better employed in a REAL war on terror. W has squandered the international support and goodwill offered this nation in the wake of 9/11 - goodwill and support that could have been leveraged to flush out and destroy terror cells and those who fund them. W is far from being "my 'man'" and I would appreciate your not making personal accusation against me and refrain in the future from calling me a liar. This is a progressive board. I'm not a progressive (or a conservative, certainly not a neo-con). Consequently, I'm going argue against a lot of what is put forward here. It's not a whole lot of fun to just join in the amen chorus, so I only respond where I see opportunity to either add to the information already posted or to challenge an opinion put foward here. That does NOT make me a W supporter.

Triple: Did you defend Clinton/Gore's energy policy (or lack thereof) or on the economic slowdown back then?

The economic slowdown coming at the very tail end of Clinton/Gore was a combination of a natural contraction as consumers overextended themselves (we aways seem to do that) and the tech bubble. Clinton/Gore didn't cause it. The expansion under Clinton/Gore was led by the same rapid advancements in computer technology that ultimately created the bubble, combined with the responsible and sound fiscal policies followed by the Fed going back at least to Paul Voelker (Carter appointee, 1979 if I recall correctly). Basically, Mr. Factchecker, I don't sign onto the "great man" theory of history and certainly not as applies to economic events. Nobody has that kind of power or that kind of understanding.

Based upon the posts I've read, I had grown rather fond of reading your opinions. Now, it would seem, those who dare to say anything not utterly damning of George W. Bush or Republicans generally, must be in league with them. Sorry, I don't play the pure goodness/pure evil game, and don't fit very well with either camp, anyway. I call it the way I see it and share it the way I believe it. Feel free and encouraged to blast away at my opinions. That's why I post here. It's both fun and educational to have my own thoughts challenged (assuming something other than name calling composes the challenge). But please refrain from attempting to ascribe me to anyone's party, agenda, or ideology unless I go there myself.

gonzone's picture

A picture for Ray

I know simple pictures often tell the story better than words, so here's you a picture Mr. Capps:

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

RayCapps's picture

Sure about the productivity gains?

I wouldn't have thought the economy capable of improving on the productivity gains of 1993-2000 during the period of 2001-2007 (making an assumption about the dates covered since the graph doesn't specify). The economy in January of 2001 was significantly stronger than the economy of 1992, making such improvements unlikely and very remarkable if accurate.

But I guess I was supposed to be upset about some of the data, especially regarding jobs? I suppose my communication skills aren't very good. The point metulj and I were going around and around about was whether or not it was realistic to expect job growth improvements within an economy that boasts a 4.0% unemployment rate. That the most recent annual unemployment rate (4.6%) over a relatively stagnant pool of potential employees suggests fewer jobs is hardly surprising. Even that 4.6% figure is misleading, as is reflected in the graph you've shown above. During the period of 2001-2007, the annualized unemployment rate has been as high as 6.0%. A stagnant to declining workforce ought to signal economic stagnation or regression in the GDP, but it doesn't in this case. Strange, that.

But the one figure that got me into this whole mess is reflected above in your graph. Per capita GDP has grown during the period of 2001-2007 (the economy expanded) at a rate within 0.8% of the period of 1993-2001. Given the stronger general state of the economy in 2000 as compared to 1992, that's not too shabby a growth rate.

Man, I hesitate to use the names of presidential administrations. There's this hard wired assumption, apparently even on a board like this, that presidents somehow possess the magical ability to manage the economy. It's like everyone believes we're in some sort of socialist state where the means of production are controlled by the government and the government, in turn, is controlleld by the president. But I can't think of a better way to make this point, so I'll risk it. The Bush Administration inherited an economy that was far healthier than the one inherited by the Clinton Administration. The period between the recession of 1992 and the recession of late 2000 was a remarkable, even unique, period of nearly unprecedented economic expansion. The only equivalent period of time I could compare to it would be the post-WWII expansion of say, 1947-1954. What happened between the recession of 1992 and the recession of late 2000 is very unlikely to be seen again in our lifetimes. Maybe people aren't fully aware of just how remarkable those eight years were in economic terms, or they somehow believe that type of growth was sustainable? I mean, the economy expanded so rapidly during that time frame federal government revenue increases actually managed to outpace the growth rate of spending, generating a legitimate surplus (if you add in the FICA surplus).

Judged on its own merits, the Unemployment Rates, GDP, Productivity, etc. of the period between the 2000 recession and the one we're either in or about to go into isn't too bad. I'm not entirely sure how that period of time managed to sustain such levels of GDP growth given there was precious little room to grow the workforce over those years and that said workforce, in point of fact, didn't grow. It should have been a period of relative economic stagnation awaiting either a collapse of the job market or a rapid increase in the available workforce. Maybe those productivity gains figure into it? Maybe the global economy throws national employment figures out the window as a limiting factor on growth? I don't know.

gonzone's picture

On Unemployemnt figures

It's a subscription site but Harper's has an excellent piece by Kevin Phillips (buy it and read it, it's worth the price!) on how we're being gamed by government figures like GDP, employment, etc. As such, comparisons are pretty much useless in year to year comparisons.

An excellent example is unemployment figures. Once upon a time we tried to use actually unemployed persons as the figure. Then someone decided they could cheat the figures bu excluding those "chronically unemployed" who had quit reporting to unemployment offices. Each administration found a new way to fudge the numbers a little more so that today they're practically useless. Another example is the inflation rate. They now exclude food and gas due to "volatility" and then call it "core" inflation. But guess what? Food and gas are the principal areas of inflation so it's like saying "the patient isn't sick if you exclude the sick parts."

Anyway, before we can argue numbers, we first need solid numbers that are consistent across the years. Else, we're just breaking wind.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

metulj's picture

Yup. True happiness is

Yup.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

Factchecker's picture

Peace offering of sorts, Ray

Where, when, and how exactly did I attack Al Gore or deny global climate change?

Have you not on multiple occasions attacked Gore for all of his "garbage"? I can't hunt all the threads to find those remarks now, though I tried. If I am somehow confusing you with someone else, and I am totally misinterpreting your defense of Bush in your first post above (and a lot of other things you've stated), maybe I was too quick to jump on you and thus owe an apology.

I do respect your opinions, however different from my own, but you've had some mixed messages that I think warrants trying to read between the lines. If I've made wrong assumptions (not a huge stretch), I'm sorry about that.

Can I make a friendly sufggestion, though? Pick a couple of points and limit yourself to them. When you write War and Peace missives throwing everything and the kitchen sink, you lose my attention. That's what happened on the fuel cell thread. You were thoughtful enough to write a long piece that I wanted to respond to, but it was just too much to wade through and spend an equal amount of time pushing back on. And to what point? You could better change minds by selecting smaller chunks of contention. Peace on that.

That there exists a Laffer Curve has not been seriously challenged by any credible authority I know of.

I had an economics professor who knew Art Laffer* since their college days. He said in the '70s (so this was before Reaganomics) that nobody in the field took the Laffer curve seriously. The Reagan era proved to Stockman and others (including me) that it's total BS. (*It's been a long time but maybe it was Jude Wanniski he knew. Doesn't change the perspective, though.)

Maybe I'll try wading through more of this debate later.

RayCapps's picture

Apology accepted

Have you not on multiple occasions attacked Gore for all of his "garbage"? I can't hunt all the threads to find those remarks now, though I tried.

Nah, I would never use the term "garbage" to describe something clearly based in solid scientific theory, even if I disagreed with that theory. Well, maybe, if I was in an extremely bad mood or something. But that's not my style. I do admit being very slow to come around to the global climate change position. You see, the deltas projected for global temperature change are all within the bounds of our geologic record (we've been considerably warmer in the pre-human past than even the most alarming projections). That put the burden of evidence, in my mind, on the shoulders of the manmade global climate change theorists to eliminate the plausible natural causes of the observed phenomena and to show a correlation between temperature deltas and human CO2 emissions. They've done that to my complete satisfaction insofar as I - a layman - can follow the research.

It was late last night when I posted about Laffer and, re-reading what I wrote, it's clear I jumped straight into the Laffer Curve without providing a very important caveat. Arthur Laffer was a supply-side supporter, and still is. He believed/believes the marginal tax rates required to reach the apex of his curve are lower than the current marginal rates. If he's right, supply-side economics would probably work. Even most critics grant the supply-siders that much. At best, the jury is still out on that argument as the Laffer Curve is doggedly difficult to model using our tax code. My own purely unqualified hunch is that we are at or near the theoretical apex, not beyond it. I say that because were we on the steeper slopes of the bell curve, we'd see more pronounced effects from the tax increases and tax cuts and the resulting revenue than we have, in fact, seen. But my opinion on that isn't worth the pixels I'm using to type it.

The Laffer Curve itself, however, is pretty well accepted as a stand alone concept in economics. At some point, raising taxes becomes self-defeating if viewed in terms of revenue generated. Are we at that point? I'd love to know.

Here's an interesting link to a Netherlands white paper that uses the Laffer Curve in a very unique and rather well modeled fashion.

(link...)

As for shortening my posts, I'll give it a shot. This kind of forum really isn't the best environment for me. I'm a wonk, a white paper sort by nature.

metulj's picture

Since I have access to the

Since I have access to the actual article via Rutgers, I needn't tell you that it is 20 years old and subsequent issues of "De Economist" have a rather vigorous debunking in reply. Also, the data expressed refers to conditions that haven't existed in Holland (hardly a generalizable case) since the Netherlands met Eurozone requirements.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

RayCapps's picture

Yep, you needed to tell me.

I had no idea De Economist had debunked the article prior to the Netherlands meeting Eurozone. Can you point me to the aforementioned debunking? I'd love to read it.

Do you have any data on this one? I don't like the approach to the model as much, but it's not too bad.

(link...)

rikki's picture

hot air

That put the burden of evidence, in my mind, on the shoulders of the manmade global climate change theorists to eliminate the plausible natural causes of the observed phenomena and to show a correlation between temperature deltas and human CO2 emissions.

There is only one observed phenomenon, atmospheric CO2 and methane levels well outside of the geologic range. Everything else is just predictions of what all those greenhouse gases might do to the climate.

After thirty years of smug half-wits pretending they know better than those wacky PhDs and their silly computers, we are actually starting to observe early indications of the predicted warming, but those observations are just validation of the science. The core observation and the basis for warming predictions has always been the changes in atmospheric chemistry caused by industrial emissions.

Those changes are readily observable and undeniable, which is why Exxon and their greedy cronies have worked so hard to center the debate on temperature instead of air pollution. Plenty of people who think they are fighting global warming play right along with this perversion of understanding.

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