Writing in The National Review Economist Larry Kudlow listed the accomplishments that the Bush Administration outlined in the President's Year End Press Conference.
He wrote, "President Bush stated with optimism that the economy is fundamentally sound, despite the housing downturn and the sub-prime credit crunch. The very next day, that optimism was reinforced with news of the best consumer spending in two years. The prophets of recessionary doom, such as former Fed chair Alan Greenspan, Republican advisor Martin Feldstein, ex-Democratic Treasury secretary Lawrence Summers, and bond-maven Bill Gross have been proven wrong once again." He could be right, but to say that Greenspan, Feldstein, Summers and Gross are "proven" wrong by predictions is overly optomistic. Even if the predictions are correct, and I suspect they will be reported as correct regardless of reality, that is hardly proof that the economy is fundamentally sound. Food, Fuel and Energy are all rising in cost faster than 3%. There have even been predictions of "stagflation." That situation is a growing economy with stagnant wages or, inflation without wage increases.
This comment, and quote are truly astonishing to me. Kudlow says, "And he's not yet finished. In the most dramatic statement of his holiday news conference, Bush said he will not stand for the continuing congressional proliferation of pork-barrel earmarks.
'Another thing that's not responsible is the number of earmarks the Congress included in the massive spending bill,' said Bush. 'The bill they justpassed includes about 9,800 earmarks. Together with the previously passed defense spending bill, that means Congress has approved about11,900 earmarks this year. And so I am instructing budget director Jim Nussle to review options for dealing with wasteful spending in the omnibus bill.'" Amazing, the Democrats reduced the number of earmarks from the last Republican Passed Budget, and the President says that it was HIS DOING? Come here a minute Mr Kudlow, I have a Museum in Baghdad you might be interested in investing in. Pu Leeeze, let's put the credit where it belongs.
And while we are at it, let's clarify who was doing the Pork Procurement. 113 thousand dollars for Rodent Crontrol in Alaska, Sen. Ted Stevens, R-Alaska. $213,000 for olive fruit fly study in France, and $535,000 for domestic olive fruit fly control Rep. Mike Thompson, D-Calif. $223,000 for beaver management in North Carolina Sen. Elizabeth Dole,R-N.C., and Rep. David Price, D-N.C., and $475,000 for beaver management in Mississippi (Sen. Thad Cochran, R-Miss., and Rep. RogerWicker, R-Miss. $705,000 for brown tree snake management in Guam, Sens. Daniel Akaka and Daniel Inouye, Hawaii Democrats. $2.2 million for Mormon cricket control, evenly divided between Sen. Harry Reid, D-Nev. and Sen. Robert Bennett, R-Utah. $332,000 for oyster post-harvest treatment, by Rep. Allen Boyd, D-Fla. $353,000 to combat Asian long-horned beetles Sen. Dick Durbin, D-Ill. $244,000 for bee research in Rep. Chet Edwards, D-Tex.
Now, I have no personal interest in controling Rodents in Alaska or Mormon Crickets AKA locusts, but, I can see why people who grow grain crops or graze cattle in Nevada and Utah would have such an interest, and I eat Beef, so I better grab my shorts, and get interested, unless I want to be eating Skinny Bovine Beef. Now the Brown Tree Snake issue is not vital to my interests. Except I own Guam, along with about 300 million other Americans, and it is my responsibility to keep people in Guam safe from Brown Tree Snakes. Unless, of course the Brown Tree Snake is a friendly little critter that eats mostly mosquitoes, in which case we should be increasing their numbers. The Asian Long Horned beatle is not native to the USA, and it is becoming a serious pest. Something like Tiger clams. Bee Research, is vital, recent epidemics have killed a large percentage of the honey bees in the USA, and they are important, if you like to eat a plum once in a while, or a bit of cucumber. That allotment may be too large, but it looks like too little to me. Post-Harvest treatment of oysters is either an animal rights issue, or a food safety issue. Since oysters are pretty much doomed to becoming food post-harvesting, I bet that I want to have their treatment carefully managed. I would not like to die from a bowl of oyster stew.
I listed some things that Kudlow did not, just in the interest of getting a balanced look at what he is praising Mr. Bush for Complaining about.
I am not in any way ashamed of calling for a pre-emptive strike on Mormon Crickets. Deadly Oysters, or Rodents in Alaska. It is in the national interest to find out what is killing honey bees, and put a stop to it. Controlling Asian Long Horned Beetles is not an issue, unless you find one in the drawer with your drawers, or socks. I don't know what they eat, but I do know that parakeets don't eat them.
With Mr. Kudlow I do take exception for this comment "passage of this omnibus spending bill is a defeat for the tax-and-spend-happy Democrats. Republicans also can take credit for out maneuvering the Democrats on a patch for the AMT. The Democrats were made to waive the pay-as-you-go budget rule that might have forced tax increases on businesses and investment pools. Stopping this tax hike is a singular GOP achievement, while the AMT will now be indexed for inflation, thereby sparing over 20 million taxpayers." Stopping that tax hike stopped tax and spend, replacing it with borrow and spend. Tax and spend is strongly supported by Democrats. Borrow with compound interest, and the cost of what ever you buy is increased radically. Kudlow knows, or should know that. Americans, most of them anyway, must live within their means. America should have the same constraint.
All in all, I hope the predictions of the people who are not Greenspan and that group are correct. But calling predictions proof is backwards. Results that match predictions are proof of predictions, not proof of the results.
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Comments: 24
3% INFLATION. I would have to say that the figures are wrong. Milk and cheese has gone up 5.6% according to the Chicago Tribune. I can vouch for this as I buy milk and cheese. I never heard the term stagflation. It is a good one to explain what is going on right now. Thanks for an excellent article, Karl.
If you're in a library sometime with time on your hands, you might want to check out the NY Times in the period leading up to the catastrophic collapse of the market on 10/24/29 and 10/29/29.
There was nothing less than a pandemic of favorable pronouncements by economists, politicians, the administration and business leaders in the weeks before the start of the Great Depression.
That is not to say that this is the situation today, but announcements like that of Bush - and most data from the government - should be taken with a grain of salt...
Very good article and extremely well researched, Karl......thanks
How can this administration have the gall to talk about other people (Democrats)wasting money when they are the biggest money wasters of all time pouring billions of borrowed money into Iraq.
A good place to start on fixing these excesses is to look at health care, in the private sector, and education, in the public sector. Operating cost reductions can be achieved by a combination of wage and price controls, and automation. If these two institutions are given a pass, we will continue to pay, and pay, and pay.
All the studies in the world accomplish nothing. And few of them are really necessary. There are agencies that can perform most of these studies, in house and save the taxpayers much. However, a study is a way to dump the blame if something goes bad as well as a way to make it look like your doing something when you're doing nothing about an issue. Even i n private enterprise is a study performed as a means to escape liability.
Good article! Earmarks are not the prerogative of the Democratic party by any means. Also, many people don't realize that earmarks are not any additional funding. The bills would be for the same amount without the earmarks. It just that when the bill is passed and the funds are allocated, certain amounts are "earmarked" to go to some senator's particular pet project rather than be allocated otherwise.
The problem is that these specialists make as much as the average CEO, and that is not rhetoric. We have a glut of executive pay in our corporation (that was rhetoric).
Since birth I have always had everything I needed, that is why I am still alive. The moment I don't have everything I need, I die. I sure don't have everything I want. For one thing Susan Sarandon does not actually know I exist. You do, and that is something I do want. When I was 20, none of this technology existed, I am sure glad it does now, but I don't think I need it to survive. It is useful though.
As soon as you move beyond food and water, you have entered the realm of wants, not needs. You also move into the realm of cooperation with others for those wants.
The brutal truth is this, If I want a pair of shoes, I must gain the cooperation of a shoe maker, a leather maker, a butcher, a cattle raiser, and a market. It is required that I satisfy either the wants or the needs, or both for those people or they will not provide the shoes.
I know for certain that some, actually a lot of high fashion clothing has a higher value than the annual income of some people who make clothing for the US consumer market. I am fairly certain that per capita expenditures on makeup and other cosmetics in the US is greater than the Per Capita GDP of those same third world countries, and in some places a family of 5 could live for eight or ten years on the price of a New Car in the US.
But, none of that addresses the issue of the possibility of a crash in the US economy. As far as I know not one earmark was passed that provides any medical care for the residents of any state. Unless you consider that rodent control in Alaska is a public health issue. It would be if the rodent control expenditure was for Northeastern Arizona. Hanta Virus is spread by rodents, and it is a health issue because the virus kills several people each year.
Heart transplant patients will eventually exceed a million dollars in cost with open heart surgeries going over a hundred thousand. I've had a heart attack and two stents placed which is small potatoes by comparison but these things all add up.
I am also acquainted with a few dozen war vets who have had cosmetic surgery to rebuild faces and in a few cases limbs following injury. Only the cleft palate surgeries were necessary for life saving improvements, but the others were deemed necessary by doctors, and the individuals involved.
It always seems to come down to individual cases.
I'm sure I've known women who had breast reconstruction surgery. However, I'm not aware of one. My own sister was going to but when the tie came she said no thanks. However, I don't call that cosmetic surgery as it is the final stage of the cancer treatment and is reconstructive. The same would apply to accident and war injuries. They are no more cosmetic than a prosthesis to walk on, IMHO.
The point I was making, is that cosmetic surgery, which isn't necessary for health reasons, constitutes a very small part of our health care dollar today when compared to therapies recognized as allopathic.
Other countries spend money on cosmetic surgery as well. It seems to be the medicine of the wealthy in any system. It would not have to be covered under a national health care system but I'd hope that reconstructive surgery would.