Has the Bush Doctrine failed?

[Shawnee123]

Wow, what's it like to go on a trip?

[glatt]

Originally Posted by Shawnee123

Wow, what's it like to go on a trip?

Actually, we live extremely frugal lives. (I bring PB&J sandwiches to work for lunch to save money.) Trips are our only "extra" expense. That's why I used them as an example.

[Hippikos]

even wages are coming around

Some things are not what it seem...

According State of Working America: the US economy is at best on crossroads.

"One path leads to a broad-based, balanced recovery, where tight labor markets ensure widely shared real wage and income growth; where the benefits of the faster productivity regime that began in the mid-1990s flow freely to all income classes; where inequality is held at bay and poverty rates are driven down by a growing economy that provides quality jobs to even the least-advantaged worker.

The other path leads to an economy more like that of the 1980s, although with faster productivity growth. Throughout those years—which were characterized by large and growing budget deficits, high average unemployment, sharply growing inequality, and declining real wages and incomes for many in the bottom half—the living standards of far too many working families were stagnant at best."

[Undertoad]

It's always simple to find measures that make a good economy look bad and a bad economy look good.

In 2004 it was job creation. You might remember how the Times and every single other media outlet were mad because although the economy looked like it was turning around and getting stronger, the "Bush job deficit" was a signal that things were secretly bad.

But job creation was a lagging indicator. Now that 3 million jobs have been created, you don't hear much about it. Now you hear about inequality -- the new signal that things are secretly bad.

Inequality will turn out to be another lagging indicator, as this quarter wages increased really fast. In fact they rose so fast in the past six months, the AP had to use them as a signal that things are secretly bad. Wages are an expense, and, oh no, employers might raise prices to pay for labor costs and that would be inflation! This quarter's economic news:

The second quarter increase followed an even larger 9 percent surge in labor costs in the first three months of the year, which was the biggest quarterly increase in nearly six years.

The first quarter figure was up sharply from a previous estimate that labor costs were rising at a much more moderate 2.5 percent rate in the first quarter. Labor Department analysts said the increase reflected more complete wage data.

While rising wages and benefits help workers, economists see the combination of slowing productivity and rising wage costs as a recipe for unwanted inflationary pressures.

The sharp jump in labor costs raised worries on Wall Street that the Federal Reserve may not be finished boosting interest rates to fight inflation.

[tw]

Originally Posted by Undertoad

It's always simple to find measures that make a good economy look bad and a bad economy look good.

In 2004 it was job creation. ... But job creation was a lagging indicator. Now that 3 million jobs have been created, you don't hear much about it.

Return to late 1960s and early 1970s. We were also leaching money everywhere in an economy that was not productive. Massive Vietnam war spending (something like $1million per day) was hidden in special appropriation bills, etc so that it was not part of the budget. US debt was climbing. US equities were being sold for cash. But plenty of jobs. GDP was strong and growing. Yes. That happens when an economy is spending massively on war. Economic spread sheets then look good.

Debts come due many years later. Massive Vietnam spending in mid and late 1960s, and in early 1970s created the brutal economic downturn all through the 1970s. Stagflation. Eventually interest rated climbed approaching 20%. Suddenly no jobs. We had to pay those debts ten years later.

Currently Fed Governors are asking if recession has already started. They are very concerned about significantly rising inflation already at 2.7%. And have you been the grocery store this summer? Notice the higher prices for fruits and vegatables when those prices traditionally fall in the winter? When recessions begin, everything looks good - as just before a 1920 stock market crash.

In the later 1960s, economy was booming but the stock market was flat. Same was a problem in years before the great depression. Today the economy is booming -and stock market has no growth for over five years. Classic of an economy leaching money everywhere. In last few years, American incomes have been decreasing except among the top 10%. When did this occur previously? Just before the 1920s stock market crash.

From the BBC - is this a healthy economy or one simply burning itself out on war:

[tw]

More examples of an economy that is growing? Whose future is robust? From the NY Times of 7 Sept 2006:

Report Finds U.S. Students Lagging in Finishing College
One particular area of concern, Mr. Callan said, is that younger Americans — the most diverse generation in the nation’s history — are lagging educationally, compared with the baby boom generation.

“The strength of America is in the population that’s closest to retirement, while the strength of many countries against whom we compare ourselves is in their younger population,’’ he said. “Perhaps for the first time in our history, the next generation will be less educated.’’

Over all, the report said, while other nations have significantly improved and expanded their higher education systems, the United States’ higher education performance has stalled since the early 1990’s.

At the same time, for most American families, college is becoming increasingly unaffordable. While federal Pell grants for low-income students covered 70 percent of the cost of a year at a four-year public university in the 1990’s, Mr. Callan said, that has dropped to less than half.

“It’s going backwards,’’ he said. “Tuition is going up faster than family income, faster than inflation, faster even than health care.’’

As American incomes fall for so many, among some of the first to suffer would be those who don't appear in those economic statistic until so many years later. Short term economics statistics suggest that this is the best it gets? That is not what the long term indicators suggest complete with a Federal Reserve that is even discussing the worse of economic conditions - stagflation.

[Spexxvet]

Right. When the economy slows, the last to lose income are the wealthy, when the economy rebounds, the first to regain income are the wealthy.