Everything old is new again;
In the 1980s, there was a consensus among the members of the national media that Ronald Reagan was going to fail and that he was going to bring on economic disaster. But. . .the economy didn’t collapse. In fact, it soared to unprecedented levels.
The media stubbornly refused to admit that “Reaganomics” was responsible. The drumbeat of negative opposition to the president’s policies continued through the 1980s. By 1986. . . the ratio of negative to positive stories was seven to one. In other words, as the economy was improving, media reports on the economy were becoming increasingly negative.
One of the most common allegations in these reports was that the poor got poorer under Reagan, even though the actual number of poor declined from 14 to 13 percent during his administration, and the average income for the lowest one-fifth of Americans rose from $7,008 to $9,431. Inflation declined 48%, from 8.9 to 4.6%. Unemployment declined 45%, from 7.5 to 5.2.%. Interest rates declined 71.9%, from 21 to 5.9%. Twenty-one million new jobs were created.
The so-called “greedy ’80s” witnessed the largest peacetime economic expansion in our nation’s history, yet the media remained deaf, dumb and blind. – L. Brent Bozell III – November, 1994
“Newsweek: Strong Economy May Hurt Economy”;
Newsweek only admits now that what has been going on the past three years — superb productivity gains, resulting in a true strengthening of the economy, growth without inflation — was a good thing, now that it may be about to end.
Before, Newsweek bemoaned the lack of gangbusters hiring — the “jobless economy” we’ve heard so very much about — without acknowledging the upside of modest (but good) job growth was that companies were growing sensibly and strongly with respect to hiring, not overhiring in a way likely to provoke a bubble and the inevitable bursting of that bubble.
Only now that that it looks like companies are hiring a lot more people do they admit that the “jobless recovery” (which wasn’t jobless at all, but whatever) was fundamentally sound.
I’ve noted this a bunch of times before: The MSM is only willing to acknowlege the economy is strong in stories predicting it is about to weaken. Only when the scary prediction of a collapsing economy is discussed will they admit the economy is currently actually strong.
Bush can never get the political benefit of a strong economy, because the media will never admit it as such until it has passed. Only when the business cycle turns, as it it one day will, to a recessionary period will the MSM then admit the economy had been strong.
In order to contrast what had been good to what is now bad. Without ever acknowledging things were good at the time.
And so it goes.
Via Ian at Inoperable Terran.
To the next marxist bootlick that makes a lame attempt at providing a socialist utopian pat response, please consider this first:
prove all the gloom and doom predictions are true—be the first to jump off a cliff.
with the national debt nearing 9 trillion dolllars stateside and a dizzying trade deficit, it ‘s hard to see the bright side. high oil prices and excessive consumer spending do not create a lasting economic peace. consumer spending accounts for 70% of GDP in the US, if oil prices continue to rise and consumers reign in spending to foucus on savings and debt payment..big trouble. all bubbles burst eventually.
There is a reason Newsweek is displayed at the checkout racks along with the celebrity tabloids.
It’s part of the infotainment industry. As with Michael Mooron, there is a market segment for this stuff.
Although I bet those buying Newsweek feel superior to those checking out Tom and Katie’s latest heartbreaks. After all, they are surely more well read and nuanced.
The anti-American BBC News did an even worse hatchet-job on the US economy in a 4/7/06 article, at http://news.bbc.co.uk/2/hi/business/4888222.stm
Their article was really subtly nasty, almost malevolent, in it’s “analysis”. If you read the article, you’ll see that they paired every positive economic fact and statistic with a negative qualifier, actually even inventing ones to decry or deny the good news.
One example: “…March wage growth was below forecasts at 0.2%, but fears remain that current high levels of employment could boost consumption levels and raise inflation.”
In other words, net increases in American personal income are bad, because they might encourage people to buy things, which might encourage inflation.
Well, duh…Don’t we want people to have more disposable income, and purchase more goods and services, thereby stimulating the economy to even more growth?
Or is it that the lefty Beeb business staff is so imbued with economic theory according to Marx and Engels? Or is any good news for the American (aka “The Great Satan”) economy inherently bad news for the rest of the world.
Both the Beeb’s anti-American animus and their economic ignorance are showing.
The curse of over-employment and a strong economy. People have jobs, are making money and don’t need the social safety nets. What will they do with all of their social workers?
Probably set up a committee to figure out how to spend all that new tax money that will be coming in, go to far, and cause the next recession. Which they can then blame on that previously strong economy.
When will people learn.
more spending isn’t necesarily great. You’ll see the government changes interest rates in order to curb spending or increase spending. Just like you said Dave, high spending will cause inflation whihc isn’t exactly the greatest.
and really any one who knows anything about economics nows that just because the states are making some shortterm improvements in some select areas doesn’t mean their economy is great. That 8.5 trillion debt is only getting bigger.
http://www.publicdebt.treas.gov/opd/opdpenny.htm
I can’t really see that trade deficit getting any better either.
The lefties just won’t ever admit that what’s good for business is good fro everybody.
Any policy that runs against their dogma becomes the target of their spite…it’s not about right or wrong or what works and what doesn’t work with the moonbats……its all about their need to impose their POV on everyone else. Regardless of the consequences!
I thought that this was a conservative blog.
Isn’t anybody concerned about the multi-trillion dollar U.S. national debt (much of the foreign portion held by those oh so nice Chicoms) or by the chronically unfavourable balance of trade or by the long slow decline of the U.S. domestic manufacturing sector while manufacturers pursue the “benefits” of semi-slave labour in China?
Remember, if the U.S. economy goes down, the whole western world goes with it, so the question isn’t exactly academic.
To those who are concerned about the debt, go to http://www.optimist123.com/ for a bit of perspective.
Reminds me of a question former talk host Peter Warren asked of a guest – what the cost of the Iraq war was in comparison to WW2, the implied assumption that the costs in Iraq were higher.
I didn’t hear any followup of the guest reporting what he found, which was totally unsurprising….
Kate…yeah, this war is a winner. Definitely low cost compared to WWII!:
– 50 million freed people.
– No more WMD threats in Iraq.
– No more direct support of terrorism by Iraq
– An under-5 infant mortality of 1.6 million, greater than the number of Jewish children murdered by the Nazis in World War 2
And democracy too, which I never even cared whether they had before, but I’m suppossed o think is worth it?
If the economy gets any stronger the lefties are going to go and get real jobs. There will be no need for social workers
How much is your freedom worth steve?
Having worked for four and one half hours last week, ( at ten bucks per hour, less taxes), I am considered ’employed’ by Stats Canukistan!?!
Duh!
Also, ( if I get this right)- according to Stats Canukistan- the ‘average CDN income’ is determined by an ‘average family income’- with TWO wage-earners per?
Now- considering that this ‘average income’ includes: millionairs, etc. (and folks who are exempt from the ‘minimum wage laws’)……There is an easy way to make the ‘economy’ look good: print more money!
My freedom isn’t worth one dead Canadian soldier over Afghanistan. I say cut and run.
The U.S. economy is all air with no floor and the average wage earner knows this. Tremendous debt load with tax cuts…this from Republicans? The growth rate of wage and salary income has been declining since the December 2004 peak.
The consumer is looking at a considerable drag amplified by the housing bubble. The strength in the job market is offsetting some of it, but unless hiring translates into wage and salary growth, consumer demand won’t alter the fundamentals.
I think that the idea of a trade deficit being a bad idea is overblown. This is how it works: we send dollars to China and get lots of bling in return. We’re essentially farming out low-paying jobs to developing countries while we concentrate on the higher-paying jobs.
The sad thing (depending on how you look at the issue) is that cheap bling will be a thing of the past in 25 years or so when the Asian economies are fully developed. I’m old enough to remember when all the cheap stuff in stores had “Made in Japan” stamped on it. Now, when you buy something that says “Made in Japan” it’s more likely to be a car or a plasma TV.
Yes, because of the trade deficit we send US dollars out of the country. But we get things we want in return for prices that are impossibly lower than they could be if they were made in the United States.
Plus, don’t forget that a huge amount of the money that we send overseas is re-invested back into the American economy in the form of buying Treasury Bonds or stock in US companies. As of today, Japanese Treasury Bonds have yields ranging from 1.4% to 2.32%. Compare this with today’s news that 10-Year US Treasury Bonds are currently yielding 5.02%, the highest since June, 2002.
If you’re a company in China or Saudi Arabia with a lot of extra dollars, where are you going to invest them, Japan or the United States?
Bottom line, our trade deficit is not that bad of a thing after all.
-Michael McCullough
Stingray: a blog for salty Christians
Bush won’t get credit because he is not Reagan.
Its true Bush and Reagan both love large deficits.
They both love large tax cuts for the rich.
HERE IS WHY REAGAN ENDED ON HIS FEET while Bush will end up on his ass. Reagan adapted to his challenges while Bush stays the course, even if it sends him over the cliff.
Reaganomics was Keynesian. When his tax cuts left his administration in a position of not having the money to pay its bills. He decided to raise taxes!
The 1986 Tax Reform Act is widely considered to be the best piece of American tax legislation since the adoption of the income tax. It is the opposite of Reaganomics. Over its first five years, it closed more than $500 billion in loopholes and tax shelters. As a result:
Major U.S. corporations that previously had paid little or nothing in income taxes due to loopholes were put back on the tax rolls, and corporate taxes were increased overall by a net of more $100 billion over five years.
A huge wasteful tax-shelter industry for high-income individuals was shut down.
Tax rates on capital gains income were raised to the same level as on other income.
Millions of moderate-income working families got tax relief through a major expansion of the earned-income tax credit.
Taxes on most families (on average, all but the best-off tenth) were reduced. (The table shows the tax changes by income group.)
The income tax was substantially simplified for most filers.
Allied in support of the 1986 reforms were a vast array of public interest groups, labor unions and citizens groups around the country. The act was also highly praised by most economists, because it leveled the playing field for businesses and investments, and made our economy more efficient and productive. Unsuccessfully opposing the 1986 Tax Reform Act were low- and no-tax corporations, recalcitrant supply-siders and tax-shelter promoters. (Opponents included, for example, Newt Gingrich, Bill Archer and billionaire Donald Trump, who continues to criticize the act for cracking down on abusive real-estate tax shelters.)
This is exactly what Harper should do. The Liberals cut corporate taxes considerably, while they were collecting record profits. The result?
No re-investment in their business. They held the money looking to move it out of country.
Lowering corporate taxes does nothing to improve their reinvestment in their businesses. You may as well tax them like every other “person”. The more you give them special treatment the more they take advantage. Business picked up after Reagan raised their taxes.
On the other hand, when you look at the charts for household debt as a percentage of GDP and household mortgage equity withdrawl, you may start to get an inkling that credit-induced euphoria is a poor substitute for a strong economy.
No re-investment in their business. They held the money looking to move it out of country.
I have no idea what this means. “They held the money looking to move it out of the country”. They held it, but they were looking to move it out of the country, but they didn’t move it out of the country. Or maybe they did. Or maybe they only looked like they did. Or maybe you just typed a bunch of gibberish because you can’t remember what it said on the union website, which was probably trying to simultaneously make a case for very low taxes on investments made by union-controlled pension funds, but sky-high taxes on everyone else.
Lowering corporate taxes does nothing to improve their reinvestment in their businesses.
Either they reinvested it in their own business, or they held it as cash (an extremely wise thing for both businesses and individuals to do, as a buffer against unexpected downturns or other disasters), or they paid it to their shareholders as dividends – and if you don’t think that paying dividends to shareholders encourages more investment then you should brush up on a little economics, especially Chapter 5 “Taxes Discourage Production”.
justzumqui
When a company has record profits they may give some back to shareholders or they may not. They will keep some certainly. But companies are globalizing. This means they are taking the money earned out of the host country and reinvesting it in another country. Today the “other” is usually a third world no tax country.
My point was that there is no gain for the host country,Canada, who gave them generous tax deductions, tax writeoffs, write-downs and deferrals and didn’t get the courtesy of re-investment. You probably don’t like people who are predators on society. You know, people who don’t pull their weight. Well, we have a lot of companies like that.
In fact two years ago, in Ontario, when the Liberals defeated the Conservatives. They found that only 50% of companies had paid their taxes.
Reagan had the right idea. Close the loopholes, and tighten up the tax code. It appears to improve their performance.
Reaganomics was not supposed to add to the national debt. Reagan was known to be upset that it did. Whenever you have growth and yet add to debt, you are living outside your means. The off-book liabilities of the US government are huge.
Of course, I guess all those prosperous blue states will pay for it. Is that the plan? 😉
justzumqui,
Where exactly did you see that dividends encourage investment according to economic theory?
According to financial theory dividends have no effect on investment i’m pretty certain. When a company pays out a dividend the company is devaluing itself and thus the stock.
“I say cut and run.”
Stirring words indeed!
What a testimony to the courage and fortitude of a people who fought two world wars in their day.
Some people just dont get it.
Princess and the Pea syndrome.
some people make vague assertions