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Bush Economy Ranks Among the Best

The strength of the Bush economy has to be one of the most under-reported stories of the past seven years. Tom Blumer cites some facts (and a chart) to show how the Bush economy compares to those of previous administrations.


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Comments (42)

I never realized W is the ... (Below threshold)
Gianni:

I never realized W is the only Pres to have an MBA. Coincidence then that the economy is kicking ass?

Harry and Nancy will certainly find a way to drag this economy down, hell, with what, 16% approval ratings, theyre sure to.

Business has never been bet... (Below threshold)
What Willis was Talking About:

Business has never been better for me. Never better.

I blame Bush! ... (Below threshold)
Old Coot:

I blame Bush!

LOL! Cherry-pick the "non-... (Below threshold)
Paul Hamilton:

LOL! Cherry-pick the "non-manufacturing index" and he looks good. So why not use the ENTIRE economy as a standard...

All five of my mutual funds... (Below threshold)

All five of my mutual funds have averaged over 25% in the past 12 months.

Me, ah ain't complainin'.

Paul Hamilton,Did ... (Below threshold)
kbiel:

Paul Hamilton,

Did you even read the linked post before flinging your feces? If you did, then are either a liar or you have very poor reading comprehension.

Paul Hamilton, I a... (Below threshold)
nehemiah:

Paul Hamilton,

I am fairly certain that you don't do well financially (and probably blame the President). However, you really ought to HONESTLY examine your work ethic, how hard you worked in school, etc. prior to blaming the President.

Paul, how are you going to ... (Below threshold)
Zelsdorf Ragshaft III:

Paul, how are you going to spin the very low unemployment rate? How about the record high stock market, or the high percentage of people who are buying or own their own homes? Got a little twist on the low interest rate loans? Which socialist based country do you think is doing better? Communist.

Of course Hamilton didn't r... (Below threshold)

Of course Hamilton didn't read it. If he did he might be exposed to facts that challenge his BDS-inspired view of Bush as the Son of Satan, if not old Beelzebub himself.

Paul, please, change your last name, You are irreparably damaging the name of one of our founding fathers.

The most amazing thing abou... (Below threshold)

The most amazing thing about this economy's health is that it is so robust while we have a major war in progress. That alone is testimony to the strength given it by the Bush tax cuts.

Lower top marginal rates to 28%, lower capital gains to 5%, eliminate the AMT and watch what happens:

The rich (those making more than $50,000/year) will get richer,
Investment will swell to unheard of levels (creating more jobs)
And, unfortunately, our Congress will have more money to spend than it ever dreamed of.

EVERYONE has benefitted fro... (Below threshold)
Gianni:

EVERYONE has benefitted from the tax cuts, but none more than Congress.

Tax revenues are WAY up, and these whores just keep spending and spending.

We should mandate a 75K a yr salary for all of Congress,and then they get bonuses of they stay under budget.

Gianni, I got a better idea... (Below threshold)

Gianni, I got a better idea.

When someone is elected to Congress, we take their assets and put them into the federal treasury.

When they leave office, if the treasury has made a profit, they get their assets back with a profit.

If, however, the treasury has lost money... well... they don't get some of their assets back.

I think under that system we'd see a new wave of economic responsibility, and a lot less pork.

Nehe: My wife and I are se... (Below threshold)
Paul Hamilton:

Nehe: My wife and I are self=employed so if our work ethic is bad, we're sunk. We are not sunk.

Zel: Unemployment -- a lot of people are no longer eligible and have fallen out of the job market completely. Stock market is not a good indicator -- it usually goes UP on what would be bad news for the average worker. Own their own homes? How about defaults and foreclosures -- both are at record levels.

Hugh: Deficit spending has a great way of pumping things up....in the short term. But somebody'd gonna have to pay up sooner or later.

PaulThat's why lower... (Below threshold)

Paul
That's why lowering taxes is such a grand idea: it's a way of paying up (no pun intended).

But let's get to the real point: was it tax cuts or spending controls that generated the Clinton era surpluses?

Lower taxes?
or
Lower spending?

When Reagan took office, "s... (Below threshold)

When Reagan took office, "stagflation" and "misery index" were part of everyday conversation.

Reagan lowered taxes.

And those terms more or less disappeared.

Coincidence?

uh, HOOVERVILLE, and... (Below threshold)
Justrand:

uh, HOOVERVILLE, and ummm, TAX THE RICH and let's see THE JOBS AMERICANS WON'T DO,
and oh hell, it is SO HARD channeling the Democrats!! It's easier to just be successful! :)

Paul Hamilton... considerin... (Below threshold)
marc:

Paul Hamilton... considering no one else posted what you missed in the link here it is...

"Monday's ISM Manufacturing Report, which came in at 56, marking the 47th month of expansion in that index in the past 49 months."

So PLEASE inform us "numbskulls" how they "Cherry-pick[ed] the "non-manufacturing index?"

You've had a chance or two to correct your self but went off with the normal diversionary tactic of "leftest" spin and change of topic.

Will you correct your error now?

Somewhere, Milton Friedman ... (Below threshold)

Somewhere, Milton Friedman is laughing hysterically at Paul Hamilton's "logic".

DJ:Somewhere, ... (Below threshold)
marc:

DJ:

Somewhere, Milton Friedman is laughing hysterically at Paul Hamilton's "logic".

I suspect your right.

Record home ownership...

Record "defaults and foreclosures..."

Somehow his brain isn't wired to see the connection between a record in both categories.

When Reagan took offi... (Below threshold)

When Reagan took office, "stagflation" and "misery index" were part of everyday conversation.

Those were the days...I still have a copy of a bank loan agreement that was priced at prime +1...19.5%. There were gas lines everywhere...remember those? I sat in line in Dallas and waited two hours to get to the pump on many days.

Then of course, we went home to hear Ted Koppel (this made his career) declare that it was Day 231 of the hostage crises that the now President of Iran was leading.

The highest marginal tax rates were at 70%. That was the time when physicians liked to take Wednesdays off to avoid that higher rate.

tonight the MSM is desperat... (Below threshold)
Justrand:

tonight the MSM is desperately searching for someone, ANYONE, who has been dis-advantaged by the economic boom spurred by the Bush tax-cuts!

Bush has stubbed his toe a LOT...but on the economy he SHOULD be getting high marks!!

Damn! I'm RICH and didn't ... (Below threshold)
JLawson:

Damn! I'm RICH and didn't know it! (Hugh S - "The rich (those making more than $50,000/year) will get richer,") Bring on the riches, baby! Finally, they put a number on 'RICH'!


JLawson<... (Below threshold)

JLawson


Finally, they put a number on 'RICH'!

Don't get too excited...the Dems are working on lowering it this very night.

"But let's get to the real ... (Below threshold)
Scrapiron:

"But let's get to the real point: was it tax cuts or spending controls that generated the Clinton era surpluses?"
Actually it was two sets of books (there were no surpluses, only a projection of one in 10 years) just like 'Al Gor-abage's' Worldcom/Lay sleeping in the white house with Slick and/or Shrillary, and hundreds of other major organizations. A short memory (or a liar) would be required to forget the hundreds of CEO/CFO's (left over from the Slick debacle) that were indicted by the Bush administration.

Hamilton, you know what I l... (Below threshold)
Zelsdorf Ragshaft III:

Hamilton, you know what I like about the left? Nothing. People like you have an excuse for every failure of the democrats and blame for anything that goes wrong with Republican plans. If Bush said the sky was blue, you would swear it was green. Some call you people progressive. Progress towards what? Dictatorship? The end of freedom? Someone wrote above we are involved in a major war. Major war, my ass. World War Two was a major war. All our industries produced war goods. Over 400,000 men were killed in that conflict on our side, millions on the other side. We have 140,000 men involved in a life or death struggle, for them, in Iraq. The outcome of which will determine our security in the near future and we are fighting it using one small part of one hand. If we on the right are not correct in our assessment, little is lost. If you on the other hand get your way and are wrong the outcome is disaster. Still think you are a communist.

Bush's economy rocks!!<br /... (Below threshold)
Jo:

Bush's economy rocks!!
No wonder the left hates him.

Zel, they are progressing t... (Below threshold)

Zel, they are progressing towards complete socialism. Why do ya think they adore Cuba?

Hugh S - Don't ... (Below threshold)
JLawson:

Hugh S -

Don't get too excited...the Dems are working on lowering it this very night.

Aw, man... :(

I remember in the '90s the supposed 'rich' level was at $85k. It's a damn shame the 'progress' on that is going down!

J.

Bush Economy Ranks Among th... (Below threshold)
Publicus:

Bush Economy Ranks Among the Best?

For who?

For everyone Publicus, ever... (Below threshold)

For everyone Publicus, everyone.

"Bush economy ranks among t... (Below threshold)
ODA315:

"Bush economy ranks among the Best"

"For Who?"


For everyone but especially for those who took the risks starting their own business, investing in their own education, and trusting and believing in their own abilities.

Unfortunately not many public sector employees nor those sucking at the union tit can count themselves above. Those that can, congratulations for breaking the chains of mediocraty.

Um. at the risk of being ac... (Below threshold)
BC:

Um. at the risk of being accused of having BDS and being a socialist, Tom Blumer (who's only a CPA) was only discussing reports regarding non-manufacturing businesses. There is a more authoritative WSJ article about this here.

These are service sector businesses, namely: Construction; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Accommodation & Food Services; Finance & Insurance; Educational Services; Public Administration; Utilities; Retail Trade; Management of Companies & Support Services; Information; Health Care & Social Assistance; Wholesale Trade; and "Other Services" like
Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services; Personal Care Services, Death Care Services; Pet Care Services; Photofinishing Services; Temporary Parking Services; and Dating Services.

So maybe eHarmony is helping out the economy more than people realize, eh? Also, is it my imagination or are some of these businesses exactly the type benefiting from cheap, illegal immigrant labor?

As far as the manufacturing sector goes, the numbers aren't quite as nice.

FYI.

-BC

BCFrom your link:<... (Below threshold)

BC

From your link:

Manufacturing employment continued to decline in May with a loss of 19,000 jobs. About half of the decline occurred in motor vehicles and parts manufacturing, which lost 10,000 jobs over the month. Over the year, factory employment decreased by 164,000, with motor vehicles and parts accounting for nearly half of the loss.

In fact, the drop in auto industry and parts related jobs are not reflective of the real impact that sector has experienced. Automakers and Tier 1 and Tier 2 suppliers have cut back substantially and that is well known. What is not well known is that these companies are in turn supplied by thousands of providers ranging from machine shops, milling specialists, plastics and emulsiion shops, and a wide range of metal workers.
I suspect that the vast majority of job loss in manufacturing is auto related. These number are not alarming because the domestic auto industry is undergoing the most thorough restructuring in its history. There's going to be a lot more blood on the floor before it's over.

To HughS:To be hon... (Below threshold)
BC:

To HughS:

To be honest, a service-based economy is still an economy, so if things go well there, then things go well, period. The real issue is that service-based economies tend to be very fragile since the cost of competing at an entry level is very low compared to manufacturing. Phone tech support, for instance, could be done anywhere where people can speak acceptable English and can operate a computer.

I know someone who's done very well running apartment rentals in, of all places, Taiwan (where his wife is from) and that grew from running some B&B's and a club near Boston. Imagine if Cuba returned to its early pre-Castro days of casinos and clubs -- check out this article from 1956. What sort of impact would that have on a place like Atlantic City?

To further confuse matters, I also know of this guy who once ran a sneaker "manufacturing" business from a small downtown office: he was supplying "store brand" sneakers for some store chains -- he would simply send the specs to a "contract shoe manufacturer" with factories in southeast Asia where they would make them and then drop ship them to the shoe store warehouses. In many respects, the guy was a mini-Nike: Nike also only uses contract shoe manufacturers and owns no factories, hence employs no factory workers -- so is it a service/marketing business or a manufacturer?

As an "American" company, Nike has been rather successful in terms of sales and stock performance, but relative to traditional corporate manufacturers who provided direct and indirect factory jobs and related employment to Americans, as well as just having a reassuringly physical presence, well....

-BC

Hmmm....I just not... (Below threshold)
BC:

Hmmm....

I just noticed a curious thing. In that Yahoo Financial chart for Nike I linked to, it has Nike's market capitalization at $30 billion and its total number of employees at 28,000. This link shows where Nike has "its" factories.

The curious bit comes when you look at the financials for General Motors and Ford: GM has 10x as many employees as Nike, 280,000, but only about 2/3 of Nike's market cap -- $20.7 billion; Ford comes off even worse in comparison -- it employs 283,000 and its market cap is only $17.24 billion, which is close to only half of Nike's.

I'm not too sure how best to regard all this, but I suspect it's not a good harbinger for the US economy in general.

-BC

The problem with manufactur... (Below threshold)
Mac Lorry:

The problem with manufacturing is that products can often be imported at lower cost than can be produced in the U.S. Toyota has 10 production plants operating in the U.S. and another one coming on line soon. It's not the American worker, good wages or environmental law that's the problem.

The problem for U.S. auto makers starts with extravagant union wages and past lucrative pension plans and then extends to the short term focus of management. U.S. management focuses on making the best profits for investors and that usually means short term thinking. Japanese management focuses on making the best product and that usually means long term thinking. It's now obvious that long term thinking returns the most profits in the long term.

The real issue is that service-based economies tend to be very fragile since the cost of competing at an entry level is very low compared to manufacturing.

Servers sector jobs also include occupations like teacher, lawyer, medical doctor, dentist, auto mechanic, all the construction trades, and even politicians. All of these jobs pay above average wages and of these only "politician" is in the category where the cost of competing at an entry level is very low compared to manufacturing.

The advantage of such jobs is that they are relatively immune from foreign competition. Well as least until there's a guest worker program that lets employers import such workers on a large scale.

My advice to young people is plan for a job that can't easily be exported. Lawyer, medical doctor, dentist, and teacher are at the top of that list.

BCI'm not too ... (Below threshold)

BC
I'm not too sure how best to regard all this, but I suspect it's not a good harbinger for the US economy in general.

You may think that's bad, but look at GOOG vs F or GM

BC, you're not too sure, bu... (Below threshold)
kim:

BC, you're not too sure, but you suspect. Well, be a little more sure, please. Do you understand the logical relationships between number of employees and market capitalization? I urge you to pursue understanding; it would be worth your while and make it worth mine to read your posts.

As I once't upon a time did.
==================

HughS wrote:You... (Below threshold)
BC:

HughS wrote:

You may think that's bad, but look at GOOG vs F or GM

A $168.05 billion market cap and only 10,674 employees -- that comes out to about $15.74 million per employee. A nice boost to the service sector economy numbers, eh? In comparison, Ford's market cap represents only about $60,920 per employee, about 1/258th as much. Hmmm....

-BC

To Kim:I'm relucta... (Below threshold)
BC:

To Kim:

I'm reluctant to post much about things I'm not firmly sure about. Economics is still a dismal science and things like econometric modeling produces impressive math, but not so impressive results.

With that said, my suspicion is that a chunk of the US economy is illusionary, especially when it comes to the actual value of companies. Google, for instance, has a $168.05 billion cap with its stock trading at about $540/share. If one person owns, say, 1000 shares, and decides to cash out, then that person will get about $540,000. But what if a large number of Google shareholders, say 50%, decide to cash out? That type of sell-off would likely drop the value of the stock so those people will not get $540 per share. What if 75% or higher decide to cash out? So the actual total cash value of Google's stock is likely no where near its supposed market capital, especially since Google doesn't really have that much in the way of assets. So what is the actual value of Google? What is the actual value of Nike for that matter?

Recently Blackstone purchased Hilton Hotels for $20 billion -- $47.50 per share in cash. If you use 300 million as the population of the USA, that represents $67 for every single person, from children to retirees, or $268 for a family of 4. That would be about what a family of 4 would pay for a night at a Hilton. Considering all the hotel & motel choices people have, these types of numbers make me wonder if this, along with the stock values of companies like Google and Nike, is just another manifestation of the Greater Fool Theory. Which gets back to my suspicion that a substantial chunk of our economy, at least on paper, is illusionary.

But, again, this is only a thing I merely suspect....

-BC

BCNot sure about you... (Below threshold)

BC
Not sure about your point. Is it that service sector high market cap vs employment is godd or bad?
My point was the empolyment numbers recently released reflect a massive restructuring more expensive and far reaching than if GOOG went bankrupt today.
Think of it this way: if Google disappeared today what would be the ripple effect in the US economy? If GM disappeared would it have a similar effect?

To HughS:The short... (Below threshold)
BC:

To HughS:

The short answer to your last question is that both Google and Nike could disappear tomorrow with little impact to the US economy, whatever the effect would be on individual portfolios. If, however GM or Ford disappeared, the effect would be very serious, both directly terms of things like GM's employees going on unemployment, but also, as you earlier pointed out, indirectly by adversely impacting all those companies supplying services and materials to GM.

My point was that there is some indication that the stock market is pumped up artificially with companies like Google trading at an absurdly high market cap that has little or no bearing to what would actually happen if a sizable portion of its stock holders attempted to cash out. And in terms of a substantial business, Google is not anywhere near the league of a company like GM or Ford. Google's market cap is over twice that of even Boeing, which has been been doing very well in recent years thanks to Airbus's missteps, as well as orders for the new 787.

The real question is whether this "Greater Fool's Paradise" can really last that long. If people merely stick to trading stocks, however inflated their values are, without actually cashing out, it could go on for a long time. The thing is, though, is that the monetary value would appear to have to come from somewhere, but... It's a can of worms to research because of its complexity and its ties with vague things like human psychology. I remember a long time ago seeing a depiction of large bank to bank transfers as being a bit of juggling act where you have this imaginary transition money always up in the air that represents value only if you never let it touch the ground. I think thats the case with a large chunk of our service economy -- it may be becoming far more fragile and insubstantial than anyone realizes.

-BC




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