Category Archives: Economics
Interesting little article about some polling results. White Evangelical Tea Party Republicans (Religious Right) seems to be group that believes unregulated businesses will act ethically. This is also the group that prefers their preachers to speak out against abortion and homosexuality rather than economic issues. This also seems to be the group that beleives the free market is guided by the hand of God.
I also believe this is the group that will ultimately bring down the Grand Old Party. This group has already hijacked trure Christianity so the GOP is their next victim – IMHO
The Supreme Court is due to hear this Wal-Mart sex bias lawsuit. Any ideas on how the Court will decide.
The New and Improved Republicans, led by their Evangelical Tea Party Darlings, may have won this battle in Wisconsin but have they fired the shot heard throughout Middle Class America?
During the three decades after World War II incomes in the United States rose rapidly and at about the same rate — almost 3 percent a year — for people at all income levels. America had an economically vibrant middle class. Roads and bridges were well maintained, and impressive new infrastructure was being built. People were optimistic.
By contrast, during the last three decades the economy has grown much more slowly, and our infrastructure has fallen into grave disrepair. Most troubling, all significant income growth has been concentrated at the top of the scale.
The share of total income going to the top 1% of earners, which stood at 8.9% in 1976, rose to 23.5% by 2007, but during the same period, the hourly wage declined by more than 7%. Census data for the 100 most populous counties in the US show that the counties where income inequality grew fastest also showed the biggest increases in symptoms of financial distress: largest increases in bankruptcy filings & divorce rates.
Take a look at the stats here.
The Republican National Committee really wanted to stick it to Democratic legislators for that time they totally punted on holding a vote on the future of the Bush-era tax cuts. And so, they armed themselves with a shiny new study from the Tax Foundation that they thought really aided their criticism. “What excuse will the Democrats use now?”
As it happens, the study compared the actual Dem plan with the GOP one. And it found that for a family of four with an income of $40,000, the Dem plan — continuing the low end tax cuts, plus the stimulus measures — would cause a 7.8 percent jump in after-tax income. That jump would only be 6.8 percent under the GOP plan to continue all the Bush tax cuts.
“I know we’ve come along way.
We’re changing day to day.
But tell me, where do the children play?”
(Where do the children play? – Cat Stevens/Yusuf Islam – 1970)
Much has been made this election cycle about the future of our children and grandchildren, mostly by the newly fiscally responsible Republicans that are suddenly and inexplicably against debt and deficits. Great! It is certainly encouraging that the Party of “Deficits Don’t Matter!” has finally seen the light.
Just don’t ask them why they didn’t do something about deficits and debt when they held power. That is “looking at the past and besides, the Democrats made us do it.”
In 1980, I briefly considered a vote for Ronald Reagan for President because he promised (!) to balance the Federal budget. I blame it on an LSD flashback from the Sixties. Of course, Reagan never came close to balancing the budget and, in fact, tripled the National Debt. The truth is, a Republican president has never even proposed a balanced Federal budget since Ike. Let me think, that is, let’s see, um, ………………………. a long damned time.
Debt and deficits have been hashed and rehashed ad nauseam, so we’ll not do it again here. When the “other side” rails against the “highest deficits and debt in history” feel free to remind them that while the deficit is approaching 10% of the GDP in 2010, it reached 30% during World War II. The debt shortly after the War was at 130% of GDP, far above the current level of less than 90%.
It is completely reasonable to remind people of those facts, given that the country is in the worst financial crisis since the Great Depression – an economic collapse that was not ended until the War was well underway. Unemployment reached 25% during the Depression. It topped out around 10% during the Great Recession.
The point is that we are not destroying the future for our children and grandchildren. Without TARP and the Stimulus Bill, the economy would have likely slid into another depression, and that would have left a horrible disaster for our heirs.
So, where do the children play? Well, if we want to truly focus on an answer to that question, we would do well to consider the state of our schools, environment and our place in the world. Bumper stickers slogans are handy for those in the bumper sticker industry, but they do little to address the problems of the nation. We need to take faux emotion out of the equation and use real-world facts and figures.
William Stephenson Clark
(Thread photo is the author’s grandson, Eli.)
Here’s what Moonshadow has to say — “I’m attaching the article I spoke of. I’d like someone that has more knowledge of our political/economic history to comment on it. I can see a lot that sounds just like the tea partiers. Saying that, how did things progress then and wouldn’t the same approach garner a similar outcome? Let me know what you think and turn it over to whoever can speak to this.”
Know who I think can speak to this? YOU!
The debate over President Obama’s $787 billion stimulus bill has mostly been about whether it has saved jobs — and most economists say it has — but that’s not the only thing it aimed to do. The bill was also designed to help advance several Democratic goals — a green economy, computerization of the health-care system, education reform, and scientific research. Time says “Any of those programs would have been a revolution in its own right” and that the stimulus “may be President Obama’s signature effort to reshape America.”
“The sky is falling, the sky is falling!” – attributed to Chicken Little.
The sky is not falling. The world is not coming to an end and the Apocalypse is not upon us. We are in the Great Recession, one that began in 2007 and the worst since the Depression, but we’ve been there before and we will probably be there again, at some point.
(Your not so humble columnist’s advice – drink coffee, now.)
The economy (GDP) grew at a rate of 3.7% for the first quarter of 2010, 2.4% for the second, for an aggregate of 3%.
Imports in the second quarter are up 28.8% from the first (we’re buying) and exports are up 17%.
GDP growth numbers for 2007 – 1.9%, 2008 – zip, 2009 – <2.6%.>
Investments in equipment and software – up 20.4% in the first quarter of 2010, 22% in the second.
Despite brutal unemployment numbers, the economy has clearly turned the corner under President Obama. Clearly, also, the previous administration drove the car off the cliff. For those not versed in the numbers, a 3% growth in the GDP is considered the minimum for a healthy economy.
Does the downturn in growth in the second quarter of 2010 mean that we are headed for a “Double Dip” recession? Nope. It could happen if consumer buying and confidence continues to remain stagnant or even drop. And why is consumer confidence so shaky? One word:
In the middle of a mid-term election year, it behooves Republicans to downplay the signs of recovery, in an effort to regain control of the Congress and various state offices.
Fortunately, there are signs that their message is not being accepted readily by Americans. Democratic numbers are slightly up, Tea Party disapproval numbers are up, as well, and Congressional approval totals still are at rock bottom.
Consumer spending drives two-thirds of the American economy. If Americans draw back from spending due to fear, Democrats will have no choice but to belly up to the bar and order another drink. Given the current political climate, that would be political suicide, but it would be the right thing to do.
While we teeter on the brink, now is not the time to be timid or to play politics. TARP and Stimulus saved us from Depression – now we need to be vigilant in ensuring that the economy continues it’s fragile recovery.
William Stephenson Clark
If you truly want to confuse the Hell out of your friends and foes alike, start talking about the economy using actual “facts and figures.” Truthfully, most folks don’t understand economics very well at all, and a good portion have no understanding greater than the mantra of “cut taxes, cut spending, yada, yada!”
I would venture to say that 9 out of 10 Americans would not know what that meant, even though we have basically employed a Keynesian economic model since 1932. In very raw, basic terms, Keynesian theory prescribes that in an economic downturn, the government needs to pump money into the economy to keep it from further contraction which would lead to recession or even depression.
Economics is not a subject near and dear to my black little heart, but in recent years, I have forced myself to learn more, in an effort to be able to debate the subject with some level of knowledge.
Although many on the Right would be loathed to admit it, without TARP and the Stimulus act, America could have fallen into a second Great Depression, dragging the rest of the world with us.
Much has been made of deficits and the National Debt, with many calling for balancing the Federal budget NOW!
Well, that sounds nice on paper, but this is what would happen if miraculously the Federal government balanced the budget today:
Instantly, the GDP (Gross Domestic Product) would contract by $1.4 trillion, putting thousands of Federal workers on the unemployment rolls and laying off thousands of others dependent on indirect government spending, and bring the economy to a screeching halt, possibly launching a Depression.
Simple rule – in times of recession, don’t cut spending.
GDP = private consumption + gross investment + government spending + (exports – imports) or………………..
“GDP = C + Inv + G + (eX – i)”
Eliminating the current Federal deficit right now would be a $1.4 trillion hit to a $14 trillion economy – a ten percent bang to the bottom line.
Simple? Well, not really, but for a thread column, that is about as simple as can be made of a complex issue.
Tomorrow: The economy isn’t as bad as you might think.
William Stephenson Clark