Another Economics Columnist Besides Krugman Cuts Through The Spin
There are some business and economics columnists at the major newspapers who see what is happening with the economy and don’t buy the Bush spin, like the drivel W dished out yesterday at his press conference that the Post was only too happy to get, as if they were a beggar happy for any scraps at all even if they failed to note the lack of substance to his remarks and follow-up from the intimidated reporters. One of those columnists that I read often besides Paul Krugman is David Lazarus of the San Francisco Chronicle. In today’s column, Lazarus focuses on Bush’s sunny talk at his “Oliver”-like (e.g. - “please sir, may I have more?”) press event yesterday, and compares the spin to the reality.
Yes, there are some good stories from the economy, such as an uptick in consumer confidence from the Conference Board, but two indicators of the health of the manufacturing industry have come in lower than expected over the last two days. None of this stopped Bush from his rosy scenario bullshit yesterday, as Lazarus notes.
"I say it's strong," he said of the economy, "because we've added over 3. 5 million new jobs over the last two years, and the unemployment rate is 5.2 percent.
"More Americans are working today than ever before," the president observed. "Homeownership is at an all-time high. Small businesses are flourishing. Families are taking home more of what they earn."
OK, where to begin?
More than 3.5 million jobs may have been created during the past two years as the nation's economic recovery limped forward. But this president hasn't been in office for just two years. He's been in the White House more than four.
Bush boasted Tuesday that the unemployment rate is 5.2 percent. It was at a 30-year low of 3.9 percent when he took office.
He also said more Americans are working now than ever before. Yet the same could be said in most months of most years. The plain fact is that the U. S. economy has grown fairly steadily since the end of the Great Depression.
And then Lazarus noted something that most of the cheerleaders in the business press ignored over the weekend.
Meanwhile, an interesting number was released by the White House on Friday, as most people were heading off for the long holiday weekend. The Bureau of Labor Statistics announced that U.S. employers engaged in 1, 274 mass layoff actions last month. A mass layoff is defined as any firing that involves 50 or more workers.
The total number of people given the heave-ho in mass layoffs last month was 136,837.
This compares with 1,194 mass layoffs in March involving 130,848 workers, 1,128 mass layoffs in February involving 117,684 workers and 1,457 mass layoffs in January involving 150,990 workers.
Bush noted Tuesday that homeownership is at an all-time high, which economists say is more a reflection of rock-bottom interest rates than rampant prosperity.
Then Lazarus caught Bush in a whopper.
Bush said small businesses are flourishing. But SurePayroll, which processes paychecks for small businesses, says data compiled from its 15,000 clients indicate a less rosy outlook.
"Small business hiring is stagnant relative to what we'd need for a solid economic recovery," the company said in a report this month. "There's been little change in average small business size in the United States since the end of 2004."
Lastly, Bush said more people are pocketing a greater percentage of what they earn. Well, what do you expect after $1.85 trillion in tax cuts?
The long-term impact of that, however, is budget deficits as far as the eye can see.
And then Lazarus ended his column with what will be Bush’s true legacy, just as it was in Texas: his ability to leave his successor with a huge mess and the tab for addressing the problems caused by Bush’s mismanagement.
"We're going to have annual deficits ranging from $350 billion to $400 billion for the duration of Bush's term," said Robert Bixby, executive director of the Concord Coalition, a bipartisan budget watchdog group.
Chronic deficits can lead to higher interest rates, which in turn can deliver a body blow to the economy by making mortgages, cars and other big- ticket items more costly for most consumers.
Bixby said Bush is essentially running up the nation's credit card just as the first wave of Baby Boomers is preparing to place an unprecedented drain on federal coffers.
He's also overlooking the cost of two separate wars, the looming overhaul of both the Social Security and Medicare systems, and a pending revision of the alternative minimum tax, all of which could cost the country trillions of dollars.
"Whoever is president next is going to have one hell of a fiscal hole to climb out of," Bixby said.
The only solution, he added, is that taxes will inevitably go up to pay for all this. And that, in turn, can have an additionally dampening effect on the economy.
The economy is strong, Bush declared Tuesday.
Tomorrow, as someone else with a penchant for denial once commented, is another day.
But remember, the Bush apologists say, the current numbers are swell. Have another sip of Kool-Aid, will ya?
Send some thanks to Mr. Lazarus.