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Why Pres. Bush
is having difficulty getting positive response for his rosy outlook on the
economic forecast: 1.
Economic Overview without the Rose Garden
Tinted Glasses by Center for American Progress 2.
The Joyless Economy by Paul Krugman Economy: Out of Touch Today, President Bush will travel to North Carolina to tout an economy the White House says
is "cooking along" with "strong and sustained
economic growth." Ordinary Americans do not share the president's
enthusiasm: 63 percent of Americans characterize the economy as "bad," "very
bad," or "terrible," and "by 58 to 36 percent people say
economic conditions are getting worse, not better." The divide is understandable. For the
beneficiaries of President Bush's economic policies -- major corporations and
wealthy Americans -- times are booming. Inflation-adjusted corporate profits
have risen more than 50 percent since the last quarter of 2001. But the
basic test of an administration is not whether it can merely improve the lot of
the comfortable and well-off; it's whether growth and opportunity can be spread
throughout an economy. As public opinion numbers show, President Bush has not
passed this test. Middle and working-class Americans are frustrated with the
economy for the simple fact that it's not working for them. Despite positive
job and GDP indicators, most families are losing economic ground -- losing purchasing power, stretching
stagnant wages, and piling up debt. Source: American
Progress Dec. 05, 2005 The
Joyless Economy Falling gasoline
prices have led to some improvement in consumer confidence over the past few
weeks. But the public remains deeply unhappy about the state of the economy.
According to the latest Gallup poll, 63 percent of Americans rate the economy
as only fair or poor, and by 58 to 36 percent people say economic conditions
are getting worse, not better. Yet by some measures,
the economy is doing reasonably well. In particular, gross domestic product is
rising at a pretty fast clip. So why aren't people pleased with the economy's
performance? Like everything these days, this is a
political as well as factual question. The Bush administration seems genuinely puzzled that it
isn't getting more credit for what it thinks is a booming economy. So let me be
helpful here and explain what's going on. I could point out that
the economic numbers, especially the job numbers, aren't as good as the Bush
people imagine. President Bush made an appearance in the Rose Garden to hail
the latest jobs report, yet a gain of 215,000 jobs would have been considered
nothing special - in fact, a bit subpar - during the Clinton years. And because
the average workweek shrank a bit, the total number of hours worked actually
fell last month. But the main
explanation for economic discontent is that it's hard to convince people that
the economy is booming when they themselves have yet to see any benefits from
the supposed boom. Over the last few years G.D.P. growth has been reasonably
good, and corporate profits have soared. But that growth has failed to trickle
down to most Americans. Back in August the
Census bureau released family income data for 2004. The report, which was
overshadowed by Hurricane Katrina, showed a remarkable disconnect between
overall economic growth and the economic fortunes of most American families. It should have been a
good year for American families: the economy grew 4.2 percent, its best performance
since 1999. Yet most families actually lost economic ground. Real median household income - the income
of households in the middle of the income distribution, adjusted for inflation
- fell for the fifth year in a row. And one key source of economic insecurity got worse, as
the number of Americans without health insurance continued to rise. We don't have comparable data for 2005
yet, but it's pretty clear that the results will be similar. G.D.P. growth has
remained solid, but most families are probably losing ground as their earnings
fail to keep up with inflation. Behind the disconnect
between economic growth and family incomes lies the extremely lopsided nature
of the economic recovery that officially began in late 2001. The growth in
corporate profits has, as I said, been spectacular. Even after adjusting for
inflation, profits have risen more than 50 percent since the last quarter of
2001. But real wage and salary income is up less than 7 percent. There are some wealthy
Americans who derive a large share of their income from dividends and capital
gains on stocks, and therefore benefit more or less directly from soaring
profits. But these people constitute a small minority. For everyone else the
sluggish growth in wages is the real story. And much of the wage and salary
growth that did take place happened at the high end, in the form of rising
payments to executives and other elite employees. Average hourly earnings of
nonsupervisory workers, adjusted for inflation, are lower now than when the
recovery began. So there you have it. Americans don't feel
good about the economy because it hasn't been good for them. Never mind the
G.D.P. numbers: most people are falling behind. It's much harder to
explain why. The disconnect between G.D.P. growth and the economic fortunes of
most American families can't be dismissed as a normal occurrence. Wages and median family income often lag
behind profits in the early stages of an economic expansion, but not this far
behind, and not for so long.
Nor, I should say, is there any easy way to place more than a small fraction of
the blame on Bush administration policies. At this point the joylessness of the
economic expansion for most Americans is a mystery. What's clear, however,
is that advisers who believe that Mr. Bush can repair his political standing by
making speeches telling the public how well the economy is doing have
misunderstood the situation. The
problem isn't that people don't understand how good things are. It's that they
know, from personal experience, that things really aren't that good http://www.truthout.org/docs_2005/120505K.shtml |
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