The drumbeat of negative news about the U.S. economy has continued without pause since the financial "crisis" began to unfold last month. Stocks are in the tank, consumer confidence is at a 41-year low, and mortgage foreclosures are on the rise. But is the state of the economy really as bad as everyone seems to think it is? Maybe not.
All of the major Wall Street indices rose sharply October 28, with the Dow experiencing its second largest gain ever, nearly 11 percent. But that could be a fluke. It could be what's affectionately known as a "dead cat bounce," a temporary jump in a bear market. Or it could be that federal efforts to shore up the economy are starting to have an effect. It's still too early to know for sure, so the Dow alone, or any of the major indices, cannot be taken exclusively as sufficient indicators of economic strength or weakness.
What other indicators are there? While we are incessantly bombarded with bad economic news, the positive factors of the economy rarely receive any attention. Let's start with the unemployment rate. First, I'll say that it's higher than we would like it to be. But the latest numbers available tell us that it really isn't that significant. For September, the unemployment rate held steady at 6.1 percent, or 1.1 percent higher than the generally accepted economic definition of full employment of the economy. Using the inverse of the unemployment measurement, this means that 93.9 percent of those actively looking for work are able to find it. And historically, the current unemployment rate is not out of the ordinary.
A quick look at historical rates shows that under Truman the unemployment rate hit 6.05 percent; under Eisenhower 6.84 percent; under Kennedy 6.69 percent; under Johnson 5.64 percent; under Nixon 5.95 percent; under Ford 8.48 percent; under Carter 7.18 percent; under Reagan 9.71 percent; under Bush (41) 7.49 percent; under Clinton 6.91 percent; and under Bush (43) 6.1 percent.
Another indicator: housing sales. For September, existing home sales rose 5.5 percent, the largest amount in 5 years. New home sales went up a higher-than-expected 2.7 percent in September. Additionally, the price of a barrel of oil is at its lowest since May of last year, down nearly 60 percent since this summer, and gasoline prices have dropped below 2007 levels. The dollar, also, is experiencing a bit of a rebound, hitting a 13-month high against major currencies.
Now, this is not to say that everything is rosy and that Americans should have a warm, fuzzy feeling about the state of the U.S. economy. But it is important to note that there are bright spots out there, if you are willing to recognize them. The trick now is getting consumers to understand that the U.S. economy is not about to collapse and that there is no need to hoard their money. Consumers fuel economic growth through spending, and right now negative perceptions are preventing consumers from purchasing many goods and services.
Strategic Forecasting, a private geopolitical intelligence firm, says that apart from the current crisis in the financial sector, the broader economy has not shown signs of an economic problem. In a posting on their web site October 29, STRATFOR says, "Apart from the financial sector, the only segments of the economy in recession are the housing and automotive sales sectors. Given that the actual demand for housing in the United States is relatively healthy, however, the housing sector recession could be addressed if excess inventory is cleared out."
But, in the end, the state of the U.S. economy is determined by how willing Americans are to part with their cash. And their willingness to spend is directly influenced by their perception of the state of the country's economic health. Getting both sides of the story could go a long way toward informing that perception.
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Comments: 313
By the way, just saw a report that said orders for big ticket items in the U.S. rose in September as well.
Interesting numbers. I never realized that since the second world war the unemployment rate has been highest under three REPUBLICAN administrations (Regan, Ford, Bush 41). Conservatism doesn't seem to be very beneficial for the working class, does it?
" Wall Street has showered nearly $11 million on the Senate since the beginning of the year, and more than 15 percent of it has gone to a single senator: Democrat Chuck Schumer of New York. Schumer’s $1.65 million take from the financial services industry is nearly twice that of any other senator's — and more than five times what the industry gave to any single Republican senator."
"Of the $10.6 million the industry has given to sitting senators this year, more than $7.7 million has gone to Democrats. Schumer got his $1.65 million; his New York colleague Kirsten Gillibrand took in $886,000; Senate Majority Leader Harry Reid of Nevada received $814,000; Senate Banking Committee Chairman Chris Dodd of Connecticut scored $603,000; Colorado freshman Michael Bennet got $401,000; and Agriculture Committee Chairman Blanche Lincoln of Arkansas— who will have a big say on the derivatives portion of regulatory reform — got $336,000."
"Democrats insist that industry money doesn’t influence their votes."
http://www.politico.com/news/stories/0909/27643.html#
The pattern started about 2007, as a simple Google search of wall street donations to democrats reveals.
I wonder, why would they contribute so heavily to a group that doesn't cater to them?
Stop being so partisan and look at data objectively.
Deny it as much as you like. The immediate future is bleak, and, while Presidents are routinely given substantially more credit, or blame, than is warranted for the state of the economy, this administraton has failed miserably when it comes to exerting what influence it could on preventing the present train-wreck.
For example:
"I could have seen the subprime problem coming earlier but I'm not saying I would have done anything differently."
--U.S. Treasury Secretary Henry Paulson (Newswee, November 3, 2008, page 27)
"Objectively speaking, the economy is in a whole lot worse condition than you would like people to believe."
Are you disputing the metrics?
"We are entering, or are in, a recession...."
Unfortunatley, the statistical data do not yet back such a conclusion. A recession is defined as two consecutive quarters of negative GDP. A report out this week expects that we will have had one quarter of negative GDP. You'll have to wait for three more months of negative GDP to call it a recession.
I guess you can hope, though, right?
~Franklin D. Roosevelt~
I'm not cherry picking any more than the folks who only cite the negative. And, as I said in the article, this is not to say that everything is fine. But right now the American people are only getting one side of the story. And getting only one side skews perception.
And if you know the official definition of a recession, why are you repeating the lie that we are in one or near one? At best we are at least three months away from one.
That's one definition of a recession, and there's nothing official about it. It's a rule of thumb.
"One thing that I do know is that I have seen no negative effect from the economy on myself or anyone that I know. And for those who will blast this comment, no that doesn't mean that I think that no one is negatively effected simply because I don't know them. Just reporting from my standpoint is all."
Same here, David. But I think that's probably because most of the people I know have been cautious. Saving instead of spending, and opting for security over higher returns.
"The trick now is getting consumers to understand that the U.S. economy is not about to collapse and that there is no need to hoard their money."
Most people I know prefer to call it saving rather than hoarding, and recognize that saving money is an important part of creating personal economic security.
"But, in the end, the state of the U.S. economy is determined by how willing Americans are to part with their cash"
And that is a fairly short and simple explanation for one of the reasons why the US economy is in the current state that it's in.
Now, my daughters have been making around 7 bucks an hour in high school. So I figured out that the wages have gone up around 11 times. If you take the cheap houses of the 60's and times that times 11, that's about average for a cheap house today. These figures are for the Midwest.
Now look at gas, food, cost of daycare and times everything from the 60's times 11. We are right on the money. Wages and cost of living has increased proportionately.
I may not be an economist. But I read a lot. The only problem with Americans today is that as a general rule we expect way too much out of life.
I said this recently and it's true, no matter how many names someone wants to call me. I've done daycare on both of the coasts and in the Midwest. I've worked almost entirely for single moms. They've all had jobs, cars, decent apartments and their kids have had good daycare, good clothes and none of them have suffered any that I cant tell.
It's wrong to say that I am self centered or just don't know. I'm 42 years old, have been around the block a few times. I grew up in a poor home. In fact, my family was destitute poor! I've been homeless, briefly. I've walked until my feet bled. I've worked a variety of jobs and no one has EVER given me ANYTHING. My husband and I have been responsible and managed to stay married for 23 years.
What the heck more do we need in this life? Not everyone will go to college. I'd love to, but I don't have the money and I put my kids and family first! I homeschooled my kids, started my own business and my husband has worked up through the ranks to make 80,000 per year with nothing more than a high school diploma and a good work ethic.
Anyone that says that this life is unfair and that the government owes them a living needs to snap out of it.
"That's one definition of a recession, and there's nothing official about it. It's a rule of thumb."
It's the generally accepted definition. Not everyone will agree with every definition. But as a general rule, it is 2 consecutive quarters of negative GDP.
"Most people I know prefer to call it saving rather than hoarding, and recognize that saving money is an important part of creating personal economic security."
But this is not normal savings. People are altering buying patterns because of a perception they have. It does not fit in with their normal routine, and cannot be characterized as just "saving."
Let me know if you know of a good space heater made in the U.S.A.
It's an arbitrary rule of thumb. And as I said, there's nothing official about it.
"But this is not normal savings."
And what you're trying to encourage isn't normal spending. People don't normally spend money for the purpose of stimulating the economy and fueling economic growth.
Vornado VH2
Or perhaps, you are retired? Just curious.
"...have you tried to buy anything made in the US lately?"
If you're trying to say we should keep jobs here, then I offer you this one thing: forcing jobs to stay here increases costs for companies. Those companies will not absorb increased costs just for the sake of doing so. They will cut positions, shifts, benefits, all three, increase prices, or a combination of all of these. Pick your poison, but nothing is without cost.
"It's an arbitrary rule of thumb. And as I said, there's nothing official about it."
Yet it is the generally accepted definition.
"And what you're trying to encourage isn't normal spending."
Actually, it is. If people have altered normal spending habits to hoard cash or save it, then returning to those normal spending habits is what I am encouraging.
Care to weigh in on any of the metrics presented above? Are you disputing their accuracy? Please offer something substantive.
It is a generally-accepted definition.
"If people have altered normal spending habits to hoard cash or save it, then returning to those normal spending habits is what I am encouraging."
A lot of peoples' normal spending habits involved spending money they didn't have. A lot of peoples' normal spending habits involved spending money on things they didn't really need. And often didn't even really want. I think a lot of those people might find themselves better off financially if they don't resume those normal spending habits.
I'm encouraging people to spend their money thoughtfully and carefully, and to save what they can in case their personal financial situations worsen in the future. And to consider that many of those who are encouraging them to return to their normal spending habits to stimulate the economy and fuel economic growth are those who stand to profit from such spending.
1. 750,000 jobs lost year to date and an expected 200,000 jobs will be lost by the end of this month. Economists state that we need to create appx 100,000 jobs per month in order to grow our economy.
2. Retailers are closing stores left and right with some going belly up. Experts predict that there will be appx 4,000 store closings by the end of the year.
AC W......Are you part of the Bush/McCain propaganda machine...or do you have a drug problem? Just askin'
When consumers start defaulting on house and credit payments, more businesses will close, and the cycle will start all over.
....not to mention all the businesses and corporations that will hightail it to Mexico once Obama's +200,000/250,000-dollar tax increases go onto effect.......
"It did not 'start to unfold last month'...."
As a crisis, it did. Foreclosures happen all the time. Some, though, like McCain, saw it coming years ago and called for more regulatory measures. Of course, his requests were ignored, with Barney Frank infamously saying Fannie and Freddie were fine and people needed to stop all the scary talk.
"Last year they hit a record of 1.3 Million properties forclosed. This year so far there are 2.5 Million and it is expected that by the years end it will have more than doubled last years RECORD!"
Yet total foreclosures are a tiny fraction of all mortgages. More than 90% of all mortgage holders pay their mortgages. There is no guaranteed right to homeownership, especially when it means my tax dollars go to bail out someone else who agreed to an ARM.
"...the US will continue it's failed foriegn policy...."
Which is essentially the same foreign policy it has pursued since the end of WWII. Very little changes from President to President.
"It is a generally-accepted definition."
By most federal agencies, the white house, all the major media outlets, and most economists (and my college economics textbook). That kind of makes it the default generally accepted definition.
"Al Qaida Endorses McCain."
That's because al Qaeda has a two part strategy over the long term. The first part involved sucking the U.S. into a protracted war in the Middle East. They accomplished this goal. The second part is that our presence would cause a mass uprising of the ummah that would overthrow our regional allies and install Islamic governments.
That hasn't happened, and is unlikely to. Al Qaeda is still sticking with this failed strategy with the intent of realizing part 2. It's not going to happen. And no matter who is elected president, our presence in the Middle East will not diminish and we will be in Iraq for a long, long time.
No original thoughts?
"Oh yeah...the U.S. Economy isn't as bad as it seems."
No, it isn't.
"1. 750,000 jobs lost year to date and an expected 200,000 jobs will be lost by the end of this month."
Yet the unemployment rate is lower by almost a full percentage point than it was under Clinton, and it is only 1.1% higher than full employment of the economy. That means, as I said in the article, that 93.9% of all those actively looking for work are able to find it.
"2. Retailers are closing stores left and right with some going belly up."
It depends on the sector. Some retail outlets are experiencing sales growth, others are not. Blanket statements do not apply.
"And put up all of the fancy metrics that you wish. They don't tell the complete story."
Neither do the metrics you are getting in the news. And that was the point of the article. Thank you for reinforcing it.
"well maybe it isnt as bad as we think but then again its also not as good as we need it to be either"
Right. Agreed. The entire point of the article is that while not good, the economy is not as bad as perceived. There are positive indicators if you choose to look at them.
Yes AC, I'm try to say that we should keep jobs here. I didn't say anything about forcing anybody to do anything. I try to buy US made, it might cost me more in the short run but I think all Americans will be better off in the long run. Force wont work but incentive and opportunity can. I hope you agree that the if we continue to lose jobs here, the economy will continue to worsen.
From Ask the White House:Those seven economists Hennessey refers to are the members of the National Bureau of Economic Research Business Cycle Dating Committee. They don't use the two-quarters-of-negative-growth rule-of-thumb.
From the White House Office of Management and Budget:A recession in 2001? Not based on the two-quarters rule. But according to NBER, it happened. I remember it happening. Do you?
"Yes AC, I'm try to say that we should keep jobs here."
That's fine if you do it by choice and accept higher prices for the products you buy.
"I didn't say anything about forcing anybody to do anything."
No, but some of the protectionist policies advocated by a few on Gather and by Senator Obama do amount to forcing; that's fine if that's the route the country wants to go; I just don't want to hear anyone whining when their prices go up and jobs are cut.
Maybe we should. But that's more than a bit outside the scope of this discussion.
Are you sticking with your claim that the two consecutive quarters definition is the official definition used by the White House, most federal agencies, etc?
If it's not the official definition used by the white house, we need to tell Dana Perino to stop saying it. I also saw the WH economic adviser on tv this evening saying, "yeah, we haven't met the technical definition yet, but it's coming." He was referring to the two consecutive quarters definition.
AC, I think you and John McCains's advisor Phil Gramm are together on that one.
Hey Wil, I bought a Vornado today. It seems to work just fine and it's "Assembled" in the U.S.A. I'm guessing some or all of the parts are made elsewhere but at least someone here's got a job. Thanks for the tip.
Is Dana Perino now in charge of creating official definitions for the White House and the rest of the country? I thought it were job to entertain reporters.
You're very welcome, Scot.
And you are trying to create a smokescreen hoping that some idiot will read this article and think that everything is all peaches and roses...and then vote for McCain.
"That means, as I said in the article, that 93.9% of all those actively looking for work are able to find it. "
I don't think that is true. You are obviously trying to side-step year to date job losses of about 750,000 with another 200,000 predicted for October. Now with all of those job losses and mass layoffs, just how the heck can 93.9% of the people who are looking for jobs find one? Also, the unemployment rate doesn't include people who have ran out of unemployment benefits or working in a lower paying job..and now even those lower paying jobs are being lost.
I work as an assistant manager for a nationwide retailer and I have 30 years experience, but there is no way that I would quit my job right now nor go to work for another retailer because I know the reality that is out there on the streets.
You can continue your futile effort to cover everything up all that you want. Considering the comments in this thread, it's obvious that nobody here is buying into it.
Any reinforcement you think Tim might be doing is being destroyed by your own posts. You say we're not getting the full story in the media (of course not; what else is new?), yet you say we ought to go with the 'two consecutive quarters' definition of recession since that's the one the media uses.
Regardless of which definition we choose to use, telling people to quit their whining and get out there and spend some money isn't likely to work. I certainly hope it doesn't. If you want to blow all your money trying to prop up an ailing economy with nothing but consumer spending, you be my guest. I'll spend, and save, my money the way I see fit, thanks. And I'll do so whether there's a recession or not.
"AC, I think you and John McCains's advisor Phil Gramm are together on that one."
The point is that nothing is without cost, and people are better off if they understand the costs up front. Labor, tax, and regulatory costs are higher here than in other countries. So for a company to keep a job here, it costs the company more. They offset that cost in the form of higher prices, fewer jobs, fewer shifts, or a combination of these.
There's no getting around that basic fact. So you can lump me in with McCain, but the reality is that it has nothing to do with McCain. It's a fact of the business market. One of McCain's solutions is to cut the corporate tax rate, making it more attractive to businesses to keep jobs here.
"Is Dana Perino now in charge of creating official definitions for the White House and the rest of the country?"
She's the spokesperson for the President and his administration. Statements made by her reflect the positions of the president and his appointed officials.
"You say we're not getting the full story in the media (of course not; what else is new?), yet you say we ought to go with the 'two consecutive quarters' definition of recession since that's the one the media uses."
No, we should use that definition because that's the one used by the majority of the media, the majority of federal agencies, college textbooks, a whole lot of economists, many analysts, the White House economic adviser, and the White House spokeswoman, who speaks for the president.
"...telling people to quit their whining...."
I just want people to be informed.
"If you want to blow all your money trying to prop up an ailing economy with nothing but consumer spending, you be my guest."
Consumer spending accounts for 70% of our GDP. It's what fuels the economy, whether you choose to accept that fact or not. It's no coincidence that consumer spending dropped and then GDP shrank.
"I'll spend, and save, my money the way I see fit, thanks."
As you should. My argument is that people are altering their habits based on incomplete information. If they are fully armed with the facts, they will be less likely to alter normal spending habits.
"And you are trying to create a smokescreen hoping that some idiot will read this article and think that everything is all peaches and roses...and then vote for McCain."
No, I'm providing economic metrics you are not getting in the mainstream media. And I specifically said in the article that everything was not fine. But it's not as bad as you are being led to believe, either. It has nothing to do with Obama or McCain. Just the state of the economy.
"I don't think that is true."
But it is, using the definition and measurements of the Department of Labor.
"You are obviously trying to side-step year to date job losses of about 750,000 with another 200,000 predicted for October. Now with all of those job losses and mass layoffs, just how the heck can 93.9% of the people who are looking for jobs find one?"
I'm not side-stepping anything. But the numbers are what they are. Jobs constantly move from sector to sector and while some jobs are eliminated, others are created. The labor market is very fluid. If you have an issue with numbers, take it up with the labor department. And with all the hulabaloo over 6.1%, we quickly forget that unemployment peaked at 6.9% under Clinton.
"Also, the unemployment rate doesn't include people who have ran out of unemployment benefits or working in a lower paying job..and now even those lower paying jobs are being lost."
It's not designed to. And there's no guarantee of any set wage, other than the minimum wage. Anything above that is dependent on skill sets possessed by the employee and the nature of the job. If you lose a high paying job, there is no constitutional right to another high paying job.
"You can continue your futile effort to cover everything up all that you want."
The thing is that I'm not covering anything up. I'm actually revealing more information. The people who choose to ignore it do so out of ignorance.
Just saw chairman of the house ways and means committee Charlie Rangel, Democrat, NY, say, "We can't use the word recession yet...."
Guess we need to tell Congress also that you don't agree with the definition.
Yes you are. You continue to ignore year to date job losses. You're also ignoring the fact that economists state that we need to be creating about 100,000 jobs per month in order for our economy to grow.
"Jobs constantly move from sector to sector and while some jobs are eliminated, others are created. "
Haven't you noticed that we have lost about 750,000 jobs in various sectors such as the pharmaceutical sector? The technology sector( Yahoo for example) ? It's endless. Our economy isn't creating jobs of any kind for the most part. And what few are being created in one sector are being offset by job losses in other sectors. Hell, even restaurant chains are closing locations. But it looks like McDonalds is doing well. Maybe all of the people who have lost their jobs can get a job flipping burgers for 7 bucks per hour part time.
"It's not designed to. And there's no guarantee of any set wage, other than the minimum wage. Anything above that is dependent on skill sets possessed by the employee and the nature of the job. If you lose a high paying job, there is no constitutional right to another high paying job. "
Of course there is no constitutional right to another high paying job, but people shouldn't have to worry as much about that as they are today. But I tell you what, lower the price on everything....rent...retail prices.....grocery prices......car prices......rent....insurance.....utilities......and I'll be more than glad to work for less money. But that ain't happening. Wages aren't keeping up with inflation. But let's out source and off-shore more jobs.....put everybody who lost their jobs working at McDonalds and Wal-Mart part-time and let's see if the prices come down to balance with those low wages.
You can use whatever definition you want, AC W. But you shouldn't try to convince people it's the "official" definition when it clearly isn't. Especially if your best effort to convince them involves making stuff up, and deliberately ignoring evidence that contradicts what you're saying.
"I just want people to be informed."
Given your insistence that they all use a single definition of "recession", I don't think that's what you want.
"As you should. My argument is that people are altering their habits based on incomplete information. If they are fully armed with the facts, they will be less likely to alter normal spending habits."
Everything people do is based on incomplete information. You're not fully arming them with all the facts. Nor do I believe it is your intention to do so. Nor do I believe you are capable of doing so even if you wanted to.
"Consumer spending accounts for 70% of our GDP. It's what fuels the economy, whether you choose to accept that fact or not."
That's one of the reasons why the economy hasn't been doing so well, lately. AC W. Whether you choose to accept that or not.
I don't rely on what the media says about the economy to decide how and when to spend money. Apparently neither do you. I think anybody who does rely on what the media says about the economy to decide how and when to spend their money is probably already in so much financial trouble, they can't afford not to alter their "normal" spending habits.
"You continue to ignore year to date job losses. You're also ignoring the fact that economists state that we need to be creating about 100,000 jobs per month in order for our economy to grow."
And you continue to ignore the larger context, which is the overall unemployment rate. I'll say it again, in case you missed it the first time: unemployment is at 6.1%. That's a whopping 1.1% above full employment, and .8% below what it was under Clinton. All things are relative my friend.
"Haven't you noticed that we have lost about 750,000 jobs in various sectors such as the pharmaceutical sector? The technology sector( Yahoo for example)?"
But jobs ARE being created in other sectors.
"...can get a job flipping burgers for 7 bucks per hour part time."
McDonald's hires full time employees as well, and they pay more than $7 per hour. If there is a market for a given skill set, there will be a job for it.
"...but people shouldn't have to worry as much about that as they are today."
Not everyone does. Your marketability is dependent on your skill sets. If you have a skill set that is demanded by society, you will have a job. If you don't, you won't.
"But let's out source and off-shore more jobs...."
Cut the corporate tax rate here and give businesses incentives to keep jobs in the United States instead of sending them overseas. They are, after all, in business to make money and will go where costs are most affordable.
Wal Mart hires full time employees as well.
"You can use whatever definition you want, AC W. But you shouldn't try to convince people it's the "official" definition when it clearly isn't."
It's clearly the generally accepted definition.
"...making stuff up, and deliberately ignoring evidence that contradicts what you're saying."
What am I making up? And what evidence am I ignoring?
"Given your insistence that they all use a single definition of "recession", I don't think that's what you want."
It's not my insistent that they use the definition, it IS the definition almost everyone is using.
"Everything people do is based on incomplete information."
That doesn't mean we shouldn't try to inform them.
"You're not fully arming them with all the facts."
I'm providing the counter to the statistics people are getting in the mainstream media. It's called balancing the playing field.
"That's one of the reasons why the economy hasn't been doing so well, lately. AC W."
Exactly. Which is why if people return to normal spending habits, it will provide a boost to the economy. Thank you for reinforcing my argument.
"I think anybody who does rely on what the media says about the economy to decide how and when to spend their money is probably already in so much financial trouble, they can't afford not to alter their "normal" spending habits."
You're speculating.
Like the war in Iraq that McCain still supports? I don’t think there is any doubt that we should have at least finished what we were doing in Afghanistan before we attacked Iraq. With success in Afghanistan Bush could have had his example of democracy taking root but he decided attacking Iraq was more important than continuing to go after Bin Laden and stabilizing Afghanistan.
“So you can lump me in with McCain”
I was lumping you in the Phil Gramm.
“One of McCain's solutions is to cut the corporate tax rate, making it more attractive to businesses to keep jobs here.”
I’ve heard Obama talk about creating tax incentives for companies to keep jobs here but what I hear from McCain is that he wants to cut taxes for all companies, even the likes of Exxon. Don’t get me wrong, I agree with you that corporations pass on the cost of doing business, including taxes, to their customers but Exxon isn’t about to abandon the U.S. market and we’ve already had gas hit a price that’s been making consumers cut back. Exxon and others like it don’t need a tax break.
“So you can lump me in with McCain”
I was lumping you in the Phil Gramm.
“One of McCain's solutions is to cut the corporate tax rate, making it more attractive to businesses to keep jobs here.”
I’ve heard Obama talk about creating tax incentives for companies to keep jobs here but what I hear from McCain is that he wants to cut taxes for all companies, even the likes of Exxon. Don’t get me wrong, I agree with you that corporations pass on the cost of doing business, including taxes, to their customers but Exxon isn’t about to abandon the U.S. market and we’ve already had gas hit a price that’s been making consumers cut back. Exxon and others like it don’t need a tax break.
And I'll say it again.....That figure is irrelevant for reasons that I sated above in an earlier comment. You also have to factor in the population growth since the Presidents that you mentioned were in office. I don't know about you, but I have never been able to take a % mark to the bank and cash it.
"But jobs ARE being created in other sectors. "
Boy oh boy...you really aren't paying attention. As I said in an earlier comment, those jobs that are being created are being offset by job losses in other sectors as well as a net job loss of appx 750,000 year to date.
"Not everyone does. Your marketability is dependent on your skill sets. If you have a skill set that is demanded by society, you will have a job. If you don't, you won't."
Here again you aren't paying attention. Did you miss the layoffs in the pharmaceutical and technology sectors? Also a person who was an engineer in a factory that closed will have little to no chance of finding a compareable job. As I stated above, I have 30 years experience in retail..24 years in management, and considering the retail closings this year, I doubt very seriously that I could find a job in retail management if I lost mine. Retail management is a skill...isn't it?
"McDonald's hires full time employees as well, and they pay more than $7 per hour."
Only in management positions. But I suppose that those 750,000 people who have lost their jobs can get a job as a McDonald's manager! LOL!
"Wal Mart hires full time employees as well. "
I worked for that company for 15 years and I still have contcats on the inside who tell me that is the same as McDonald's.... management only. But if you want to talk about skilled positions, I doubt very seriously that McDonalds and Wal-Mart can absorb all of the managers who have lost their jobs due to store closings.
The company that I work for has halted seasonal hiring until futher notice and this is the time of the year when I should be hiring and training employees for the Christmas season. They also recently axed 6 regional VP's. All of that is unusual o this time of the year.
The Lowe's store here in town just layed off 25 employees and they are coming to me looking for jobs. One of the girls worked there for 7 years and she can't find a job anywhere. But I suppose that you don't think that someone with 7 years of retail experience doesn't have any skills.
Retaliers just don't cut jobs, close stores and impose hiring freezes this time of the year.
"Like the war in Iraq that McCain still supports?"
Do you not support winning a war that we are in?
"I don’t think there is any doubt that we should have at least finished what we were doing in Afghanistan before we attacked Iraq."
Doesn't it matter that NATO invoked the collective defense clause of its charter and assumed the Afghanistan mission from us? That's one of the reasons for being in a defense alliance such as NATO, isn't it?
Interesting how you changed the subject.
Okay, now back to the economy.
"I’ve heard Obama talk about creating tax incentives for companies to keep jobs here but what I hear from McCain is that he wants to cut taxes for all companies, even the likes of Exxon."
Economics lesson #1: Obama has offered a $3,000 tax credit for every full time American job created by a company. Do you know of any full time jobs that are offset by a $3,000 credit? Even if the company paid the person only $7 an hour, it would cost the firm more than $14,000 a year in salary. Then throw in benefits. How much of an incentive is that $3,000 credit?
Economics lesson #2: McCain has it right when he says cutting the tax rate (the actual rate, not a set limit credit) frees up more money for companies to invest in new jobs and business expansion. The $3,000 offered by Obama doesn't even come close. But knock a percentage point or two off the current 35% corporate tax rate and look at how much money you free up. And Exxon should not be excluded because the underlying principle is the same. Cut the tax rate and free up the funds for job creation.
"Exxon and others like it don’t need a tax break."
Again, think about the principle I just laid out for you.
Do be ridiculous AC. Do you want the goverment to pay the entire cost to employ someone while the employer gets the profits from the labor?
"Again, think about the principle I just laid out for you. "
Your principle seems to be that if companies want something, they should get it With what companies are paying CEOs and other top executives compared to what they pay the average worker, I am opposed to giving the likes of Exxon any break. I think the CEO of Exxon made 5.11 million in salary plus 3 million in options. Sorry AC, I think these large corporations are run on greed and I don't feel sorry them. Did you hear about the AIG executives having a party after the bail out? Give me break, taxes are not the main problem, it's greed and lack of regulation.
"Do you want the goverment to pay the entire cost to employ someone while the employer gets the profits from the labor?"
You're missing the point: the $3,000 credit is a token; it provides NO incentive to create a job here because the costs associated with job creation far outweigh any benefits received. If there was a demand for an additional position, a company would create it. That's how businesses expand. Obama is advocating artificial job creation without regard to market conditions, and he's offering a token credit that does not provide ANY incentive to create a new job.
The answer is to cut the corporate tax rate.
"With what companies are paying CEOs and other top executives compared to what they pay the average worker, I am opposed to giving the likes of Exxon any break."
These companies are controlled by shareholders and boards of directors, two groups who have a financial stake in the company. They approve these salaries. I, as an investor, look at CEO performance for my investment before casting my ballot on compensation issues. I invest to make money, not lose it. If I think a guy is going to give me a return on my investment that outweighs his salary, I vote for it. If I don't, then I don't.
"...I think these large corporations are run on greed...."
All corporations, hell all businesses, even mom and pop stores, are run on greed. They are in business TO MAKE MONEY. That's why they exist.
"Did you hear about the AIG executives having a party after the bail out?"
Yes, and they should be prosecuted for misappropriation of taxpayer funds.
No AC, you are. According to the dictionary, an incentive is any factor (financial or non-financial) that provides a motive for a particular course of action, or counts as a reason for preferring one choice to the alternatives. A $3000 tax credit will provide and incentive, it's not and should not be intended to cover the entire cost of employment. Your " it provides NO incentive to create a job here because the costs associated with job creation far outweigh any benefits received" statement is ridiculous. You might argue that it won't be enough or you might argue that there are better ways to do it or you might argue that the government shouldn't do it but to say that $3000 is no incentive is flatly ridiculous.
"even mom and pop stores, are run on greed"
No AC, they are not all run on greed. There's a difference between making a profit/living and screwing people out of their money.
According to the dictionary, an incentive is any factor (financial or non-financial) that provides a motive for a particular course of action, or counts as a reason for preferring one choice to the alternatives
It's clearly a definition. There are others. Generally-accepted or not, you said it was the official definition. It's not. You're deliberately trying to mislead people.
"What am I making up?
Your completely unfounded claim that the two consecutive quarters definition is used by the majority of federal agencies, the White House, the majority of economics textbooks, the majority of economists, etc.
And what evidence am I ignoring?"
The evidence I provided from "Ask the White House" and the White House Office of Management and Budget.
"It's not my insistent that they use the definition, it IS the definition almost everyone is using."
You've said that definition is the official definition. It isn't. You're deliberately trying to mislead people.
"Exactly. Which is why if people return to normal spending habits, it will provide a boost to the economy. Thank you for reinforcing my argument."
One of the reasons the economy has been having problems is that it's too dependent on consumer spending. More consumer spending isn't going to solve the problem. Your argument is ridiculous.
"You're speculating."
And I make that clear by using words and phrases like "I think" and "probably." You're speculating, too, but you're presenting your speculation as if it were fact. More deliberate deception. Is that how you make your living, or do you just do it as a hobby?
"According to the dictionary, an incentive is any factor (financial or non-financial) that provides a motive for a particular course of action, or counts as a reason for preferring one choice to the alternatives."
You're living in a fantasy world if you think a $3k credit provides an incentive to create a new full time job that the market is not demanding.
"No AC, they are not all run on greed."
Every business wants to make as much money as possible. That's why they're in business. There is no difference between Edith's diner trying to maximize profit and Exxon Mobil trying to maximize profit. The dollar amounts may differ, but the principle is the same.
"...screwing people out of their money."
You should talk to the Congress and Senator Obama's tax advisers about that.
"It's clearly a definition."
The one used by Dana Perino, the White House economic adviser, Congressman Charlie Rangel, virtually every major media organization, multiple think tanks, textbooks, and scores of economists. If you want to play semantics, fine. Okay. I'll play. Parse words all you want, but in the end, it's the definition most used to define a recession.
"Your completely unfounded claim that the two consecutive quarters definition is used by the majority of federal agencies, the White House, the majority of economics textbooks, the majority of economists, etc."
As General Russel Honore would say, "You're stuck on stupid."
"One of the reasons the economy has been having problems is that it's too dependent on consumer spending. More consumer spending isn't going to solve the problem."
Actually, the way our economy is structured, it probably will. What's the alternative? Government spending? Oh wait, that's just someone else spending the money of American consumers.
"Your argument is ridiculous."
Ditto.
"...but you're presenting your speculation as if it were fact."
Are you disputing any of the metrics I provided?
Well...we can see now what your motive is. It doesn't matter how many jobs are cut while the executives of the companies in which you own stock in are having a million dollar party on the company yaht as long as you are making money on your stocks at other people's expense.
My company has a new Senior VP. So far he has proved himself to be a liberal spender. He has re-inacted foolish and costly programs that were ditched years ago. Recently, he ordered 3 pallets of fixtures that cost appx $3,000 for each of our 1400 stores. He ordered a paint up fix up program that cost each of our 1400 stores appx $2,000 per store. Also, we had to purchase 18 clipboards because this idiot decided that our store managers couldn't operate without that moronic clipboard system. 18 clipboards at appx $1.00 each multiplied times 1400 stores. Do the math. And there is more, but I'm too tired to type it all up.
I recently told my boss that I was afraid that this moron of a Senior VP was going to drive our company into a ditch with his liberal spending considering the condition of our economy. My boss also expressed his concerns.
So I decided to do some research on this idiot via Google. The first thing that popped up was his profile. Turns out that he streamlined operations while saving his former company 28 million bucks in operating expenses in his first year on the job.
So I was left scratching my head in utter confusion. How could this liberal spender save a company 28 million dollars in operating expenses in his first year? Well unfortunately I found out just how he pulled that off. He recently axed 6 Regional VP positions and spread their responsibilities out to the other Regional Vice Presidents. He also has enacted a hiring freeze and more job cuts are expected.
However out of all of that, he has managed to come up with enough money to sponsor a Bush Series race car. Go figure.
But it all looks like peaches and roses to stockholders such as you. He is saving the company money at the expense of the former employees while pissing mega bucks away on moronic programs and you are making tons of money on your stock.
Bravo to you AC!
You are making money for yourself. It doesn't matter how many people you plunge into the poor house in the process. You are performing at a level that is unprecedented. In fact, you are a genius. You have pissed away millions of dollars on moronic programs and paid for it with job cuts which save your company money and make money for your stockholders. Plus, all of your genius decisions will look very good on your resume just in case you decide to go to work for another company.
All of these job cuts, layoffs, outsourcing and off-shoring of American jobs is all about greed..plain and simple.
Stop Denying The Fact!
It didn't matter to them. The Executives escaped with their pockets full of dough .
That's just one of the issues that got us into this economical cluster f@#k in the first place. An economical bubble based on borrowed money that can't be paid back. Then the lenders place the blame on consumers who borrowed money that they knew they couldn't pay it back even though the lenders knew that they couldn't pay it back in the first place.
But what the heck. Looks like AC is encouraging the same kind of behavior that in part got us into this mess in the first place. Ir appears that it doesn't matter to AC since he is making tons of money at the expense of the American worker.
Hey, you're the one that who lied about the the "official" definition of recession, but if you want to call it paying semantics, you go right ahead.
And while you may be a big fan of the Dana Perino Dictionary of Economic Terminiology, here's what Ms. Perino had to say about it last month:"As General Russel Honore would say, "You're stuck on stupid." "
Or he might say, "I can't swing a dead cat without hitting a dumbass faux-conservative trying to tell people how to spend their money in hopes of saving his stock portfolio.
"Actually, the way our economy is structured, it probably will. What's the alternative? Government spending? Oh wait, that's just someone else spending the money of American consumers."
Oh wait, how about an economy based on the production of value? Is there any chance that might possibly work? Or is it better to creation nothing and then insist that people spend money they don't have on crap they don't want or need?
"Are you disputing any of the metrics I provided?"
Did I say I was disputing any of the metrics you provided? Although given the fact that you clearly have an active fantasy life and enjoy making things up and then presenting them as facts, maybe it would best best if I didn't accept any of the metrics you provided without looking them up for myself.
No AC, Edith's diner probably knows some of their customers by name and the managment is local. They can decide to by from local suppliers because they know their local suppliers are also thier customers. A multi-billion dollar, multi-national corporation has little in common with Edith's diner. You've got that Republican song down pat, lower taxes on corporations and anybody that has different idea is crazy. AC, we've been playing that song for 8 years and there is no doubt that we are worse of today.
AC, the whole point of you aritcle is that the economy isn't that bad and now your trying to argue that a $3000 dollar tax credit for creating jobs will have no effect. If you own a business and were thinking about expanding and the economy isn't that bad then a $3000 tax credit might be just the extra incentive you need to go ahead and do it.
"It doesn't matter how many jobs are cut while the executives of the companies in which you own stock in are having a million dollar party on the company yaht as long as you are making money on your stocks at other people's expense."
So should it be at my expense? I invest money in companies with the expectation of a return on that investment. That means profitability for the company. To be profitable, business decisions have to be made that will sometimes involve hiring, and sometimes involve cutting jobs. Who would invest in a company that disregarded profit for the sake of keeping jobs? That's not what the purpose of business is.
Unless, of course, you want a socialist state.
"However out of all of that, he has managed to come up with enough money to sponsor a Bush Series race car. Go figure."
Sounds like poor management, and whoever hired him should be held responsible. So what's your point?
"But it all looks like peaches and roses to stockholders such as you."
Should we not expect a return on our investment?
"Bravo to you AC!"
Thank you.
"You are making money for your stockholders."
That's his job.
"It doesn't matter how many people you plunge into the poor house in the process."
It's a capitalist socieity. I would expect, as a shareholder, for this guy to streamline operations WITHOUT wasteful expenditures. If he didn't, I would use my shareholder vote to voice my opinion.
"Looks like AC is encouraging the same kind of behavior that in part got us into this mess in the first place."
What I'm encouraging is capitalism. Don't like it, move to a socialist society. Oh wait, you're about to get one here.
And by the way, I am an American worker.
"Hey, you're the one that who lied about the the "official" definition of recession, but if you want to call it paying semantics, you go right ahead."
Right. So now I'm a liar. You're a moron, and you ARE playing semantics. I guess it's a technique for getting out of a debate that you've lost.
"...enjoy making things up and then presenting them as facts, maybe it would best best if I didn't accept any of the metrics you provided without looking them up for myself."
Please feel free to follow the links provided and see them for yourself.
"No AC, Edith's diner probably knows some of their customers by name and the managment is local."
Yet they still are in business to make as much money as they can.
"A multi-billion dollar, multi-national corporation has little in common with Edith's diner."
Except the desire for profit, and as much of it as possible.
"AC, the whole point of you aritcle is that the economy isn't that bad...."
No, the point is that the economy isn't as bad as it is being portrayed, and that there are positive metrics if one is willing to find them.
"...and now your trying to argue that a $3000 dollar tax credit for creating jobs will have no effect."
Would it motivate you to create a full time job with benefits that the market wasn't already demanding?
Yes, you are. And obviously a really, really dumb one, since even a MORON like me could look up the information for myself and see that you were lying. You told Paul he couldn't say the US was experiencing a recession because the conditions for the official definition of recession hadn't been met yet. That of course was total and absolute bullshit but you deliberately lied anyway in an effort to manipulate the discussion. Proving that you're a liar isn't playing semantics.
"Please feel free to follow the links provided and see them for yourself."
I have. And I'm not arguing with any of them. I just don't agree with your interpretation of them. Calling me a moron isn't going to change that.
"Yes, you are. And obviously a really, really dumb one, since even a MORON like me could look up the information for myself and see that you were lying."
You're parsing words about "official." I would argue, and you would disagree, that if a definition is generally accepted, used, and published in textbooks, it's as close to "official" as one can get. You have proven nothing except that my assessment of you was dead on.
"I just don't agree with your interpretation of them."
So you wouldn't characterize them as positive? I'm sorry if they don't fit into the constantly negative characterization of the economy portrayed by the media. But they are valid metrics that provide a more balanced picture. As I said in the article, this does not mean everything is fine. But there are positive indicators in the economic data if one cares to actually look at them.
"Calling me a moron isn't going to change that."
Just calling them like I seem.
No, AC it wouldn't if I was sure the market wouldn't support it but if I thought the market might support an expanded business the $3000 might make be go ahead and try it. It's not as if we always know if the market will support a particular business/job at a particular time. A tax incentive is just that, one more (or 3000 more) reason someone might try.
"Except the desire for profit, and as much of it as possible"
I have to disagree AC. A mom and pop shop will sometimes give a guy a break, not because they're going to make more money but because they'll feel better about themselves. I know I've gotten breaks in life from mom and pops both in lower prices and a couple gave me jobs they didn't need to give when I was a kid. I've also given people breaks. I don't see that with multi-national, multi-billion dollar corporations such as Exxon. Yes AC, Mom and Pop is in business to make a profit, but they don't necessarily want to take all of your money.