Want my own guess? You didn't ask, but I'll share anyway. By this time next year, unemployment will be at Clintonian levels, by which I mean between 5 and 5.5 percent, which is about what it was throughout the Clinton years. (Those who remember 4% are remembering a very brief period of that 8 years that ended well before Clinton left office.) Economic growth will continue apace. The markets will be back up to close to what they were before the Clinton-era dot-Com bubble burst and the Clinton-era corporate corruption was revealed during the first few months of the Bush administration. Consumer spending and confidence will be up, and things will be pretty much back to normal.

Sure, because by that point it will be obvious that Bush is losing in the polls to whomever is the Democratic frontrunner. Optimism will begin to show it's head again and that in turn will lead to the beginnings of everything you describe (just as the inverse of this took hold spring of 2000 - the smart money knows what happens to businesses that get turned over to the drunken ner-do-well son of the outgoing CEO, and Bush proved no exception).

My closing guess? Bush tries to take credit for it . . . and you give it to him.

Well now that's an interesting thing.

So after declining 5 years, the economy would get better because businesses would think that Bush *might* lose, and based solely on that, they'll do better?

Well, it's a creative way of seeing things, that's for sure. ;-)

Myself, I believe that Presidents very rarely make economies better or worse one way or the other. Bush's economic policies are very, very little different from Clinton's, and that's fine, since both men are moderates who never made major, massive policy changes economically (unless you count finally passing NAFTA, which all six of the last Presidents supported). So I wouldn't credit him with saving the economy, just with the same moderate, responsible stewardship as his predecessor.

Absent making massive changes to the tax or regulatory environment--which hasn't happened in over 20 years--Presidents aren't all that important to economies. They're fringe players at best, most of the time. No matter what they claim on the campaign trail. ;-)

The markets will be back up to close to what they were before the Clinton-era dot-Com bubble burst.

I'll give you 100:1 that the Naz will not close above 5000 before 9/16/2004. That would be close to the all time high of 5048.62 reached on March 10, 2000. It's currently sitting at 1889.32.

Nah, you got me there. The NASDAQ was incredibly, stupidly overvalued--I got out of most tech stocks in my 401(k) in 1999, thank God--will not hit 5K any time soon. It was ridiculous that it was ever as high as it got.

The DOW will be up over 10K again though, I'll betcha.

Feh! Milton Friedman. As if!

Paste this URL into your browser to hear my two cents worth regarding Milton Friedman.

http://PlayAudioMessage.com/play.asp?m=16549&f=YTHNMO&ps=7&p=1

"Absent making massive changes to the tax or regulatory environment--which hasn't happened in over 20 years--Presidents aren't all that important to economies."

Dean, do you really believe that the Bush (really Grover Norquist) tax agenda, if enacted, wouldn't be a "massive" change? Much like the decision to invade Iraq, I think the idea to bankrupt the US treasury just as needs peak (when the boomers retire) to try to force wholesale changes in the tax code (a flat tax in Norquist's wet dreams) seems fraught with high-stakes risk and unintended consequences. Strong reservations from many quarters of the market over both of these policies will continue to be a drag on the economy for the rest of Bush's one term.

Dean, do you really believe that the Bush (really Grover Norquist) tax agenda, if enacted, wouldn't be a "massive" change?

Of course not!

Jesus.

Let's knock four and a half points off the top marginal rate for "the rich," five points all the other lower marginal rates, expand the child tax credit and the earned income credit, and we'll call that a "tax cut for the rich?"

Give me a break.

The left isn't liberal anymore, it's a bunch of damned reactionaries. The Bush tax cuts only make the plan more progressive, yet people are yelping that it's a "giveaway to the rich."

People are idiots. They really are.

...a flat tax in Norquist's wet dreams...

And what flattening of the tax code are you referring to, aside from whatever's in Norquist's dreams? Because so far, Bush hasn't passed anything that looks remotely like that.

So what, exactly, are you referring to here, Shep? Some maybe-policy that might-happen if Bush got what he supposedly wants even though he has never actually asked for it?

Feh. The so-called "liberals" have forgotten how to be liberal. They don't even look at facts anymore. It's embarassing.

Shep,

What drag on the economy?

We slipped into recession in the first quarter of 2001 and emerged from it in the fourth quarter of that year - of course, the other thing that happened that quarter was 9/11.

Given the effects of 9/11, the recovery was stunted all through 2002, but still proceeded apace and by second quarter of this year, even the 9/11-effect had been overcome.

The only complaint anyone can still have is the lagging employment numbers - which always lag in any recovery and, also, are constricted a bit more this time by the massive productivity increases we've experienced over the past year - but the slack is almost all gone in the economy and very soon businesses will be forced to large payroll increases just to keep pace with demand.

Dean's right about it all - the DOW about 10k, unemployment down to 5-5.5% by this time next year.

Y'all help me out with this, but I thought the discussion was about economics and about projections of the strength of the economy, and we get this -- well, I don't what exactly to call it -- from Thumb:

".. the smart money knows what happens to businesses that get turned over to the drunken ner-do-well son of the outgoing CEO, and Bush proved no exception.."

Would someone tell me how exactly such a statement contributes to this discussion? What in the world are you thinking, Thumb? I can't even call what you said a rant, because rants have some basis in reasoned thought...jeez, man, calm down...

Myself, I believe that Presidents very rarely make economies better or worse one way or the other.

Do you feel the same way about CEO's in general and their effects on their companies bottom lines? An argument could be made that they also are little more than figureheads, as are most leaders. All a leader can do, for the most part, is inspire those around them to achieve or they can look at the company as their personal piggy bank/playground. Also telling is that the former CEO will be the first to disavow credit and pass it to others while the latter will be quick to blame circumstances and other's failings.

So after declining 5 years, the economy would get better because businesses would think that Bush *might* lose, and based solely on that, they'll do better?

Not businesses per se, but the smart speculators, the ones that seem to be able to get in (or out of) trends very early on. No smart investor is going to put money in a company where the new CEO essentially inherited the position, especially if that incoming CEO is a spoiled, pampered, intemperate ex-alcoholic brat with a history of cronyism and failed ventures. Why should this be any different?

There is a cascade effect that grows from these early speculators to businesses next and then to the public at large. Economies are just extensions of the underlying feelings of the general public who, if anyone missed it, works largely off of a pack mentality. Follow your trend lines. Where there's hope, there's, well, hope.

I agree you're right, just not for the reasons you think.

The DOW will be up over 10K again though, I'll betcha.

Pretty weak-sister prediction considering it's at 9550. :-) To be consistent with your eariler prediction, you should be willing to go to 11,000. The all-time high is 11,722.

Would someone tell me how exactly such a statement contributes to this discussion?

I was making the point that early perceptions can direct trend lines. It was in reference to Dean's predictions for next year. I even highlighted Dean's quote to help out. What's not to get? Economies are based on confidence, and I don't think the smart money (and by extension those that follow the smart money) has any confidence in Bush. Once confidence breaks down it all starts to breakdown. As a viable alternative shows itself, say, next spring/summer, these people may have reason to be optimistic and it will begin to show in the overall economy, well ahead of the election/inauguration.

You can't compare Friedman and Krugman. Friedman's an economist: Krugman's a polemicist. Friedman wants to be Adam Smith: Krugman wants to be Molly Ivins.

Thumb,

Your CEO / President analogy isn't very close. A CEO exerts direct influence over an organization by dictating its actions. A President indirectly effects an economy by influencing the environment in which it operates. A president cannot force anyone to buy something he feels is beneficial.

CEO's have vastly more influence over their own organizations than any president has over the economy.

"Thumb": Do you feel the same way about CEO's in general and their effects on their companies bottom lines?

No, of course not.

Although a CEO's power is limited by many factors beyond his control, corporate CEOs have infinitely more control over their companies' bottom line than any President of the United States has ever had over the American economy.

I can't even answer the rest of your questions, because they don't parse, and don't compute to anything but cheap shots at George W.

I mean, please. Clinton was the governor of a small, economically depressed, corrupt state, the son of a slattern, a high school dropout, and an alcoholic abuser. The man never held a job in the private sector in his whole life.

So, you know, he was an incompetent President, right?

And now, you prokpose that, somehow, all of corporate America shares your feelings about Bush, so at the first sign that he might leave office, the economy will improve?

No offense, but you aren't even a serious-minded person on these questions. In fact, you're doing something pretty childish: predicting in advance that even if everything's much better, it's only because people think Bush MIGHT lose.

I guess I get the logic, but I seriously hope you don't think you're a liberal, or a progressive, or that you know the first thing about economics.

Daryl: Pretty weak-sister prediction considering it's at 9550. :-) To be consistent with your eariler prediction, you should be willing to go to 11,000. The all-time high is 11,722.

So, in short, it's been recovering nicely since the crashes of 1999 and 2000, right?

I'll go to 11,000. No problem. 12,000? Maybe. Anyway, in similar territory to where it was. Why shouldn't it? All the factors we have in front of us are positive, and the next couple of years look pretty good.

Note: I think they'd look about the same if Gore were President right now.

Perhaps you should be embarrassed, Dean. You left out the cap gains cut and the attempts to kill the estate tax, both large, regressive policy changes. If you're going to decry not "looking at facts anymore," you shouldn't be avoiding them. That goes for this President's intentions to keep lobbying for making the current regressive cuts permanent and ask for more as well.

Mark, you're assuming that those things haven't had a negative effect based upon current economic indicators, I'm assuming that they have (even Dubya was bemoaning the drag effect of all the "talk about war"). Obviously, no one can prove that effect or the lack thereof.

“So, you know, he was an incompetent President, right?”

Now, there you go again. Considering your espoused values, you’d think you could muster just a smidge of respect for “the son of a slattern, a high school dropout, and an alcoholic abuser” who became a Rhode scholar, and President (a two-term president, by one measure of success). By what imaginable criteria could Clinton be called incompetent? I’ll make it easier on you and eliminate Bush II as point of reference; you may compare him to a successful President.

Shep,

Seems to me that you're blaming the Bush policies for what economically ails us....but the recession came in before Bush had a chance to set any policy, and went away under Bush's policies; and the economy is set to take off, now; when Bush's policies are reaching their strongest potential.

Doesn't make sense, Shep, if we take your view of the matter.

I agree with Dean that President's only have a limited ability to help the economy along - they do, on the other hand, have a great deal of ability to wreck an economy by one or two boneheaded policies...given, however, that the economy is rapidly improving, everyone must say that at the least nothing boneheaded has been done and finally that there may be something in lowering marginal rates.

Also, Shep, I think it's pretty clear that Dean's comment on Clinton as "an incompetent President" was meant ironically. The general thrust of his argument was that assembling the negative aspects of a person's background is not definitive evidence that that person cannot be successful later in life, contrary to Thumb's petulant ranting.

A president cannot force anyone to buy something he feels is beneficial

Neither can a CEO.

The general thrust of his argument was that assembling the negative aspects of a person's background is not definitive evidence that that person cannot be successful later in life, contrary to Thumb's petulant ranting.

Quite to the contrary, the train wreck that is the Bush administration is following the trend line perfectly. As a successful business owner who's worked with literally hundreds of other businesses through various trade & business associations, as well as anecdotal evidence from a wide range of personal/professional business contacts (both sides of the political isle) I can tell you that there are two kinds of nepotism. One, the son/daughter works at the parent's company weekends and summers through school, goes off to college and returns to work every position in the company that they didn't work while in school (which usually included sweeping the floors) before taking the reigns to the top office. These people tend to do fine once the transition of power is complete and these businesses transfer from generation to generation quite well. The other nepotism situations are those who tended to get into all kinds of drug/alcohol/discipline problems through school/college, got bailed out by the 'rents each time they got into trouble, tried their hands at running their own businesses (because it was cool to be a business), which they also needed to be repeatedly bailed out of, before inheriting the business from mom/dad where they immediately think they know everything, surround themselves with sycophants and eliminate anyone who offers information/advice [criticism] that they don't like. These people tend to destroy the businesses they take over.

I've seen it repeat itself over and over and I don't see where Bush is any different. Do you?

given, however, that the economy is rapidly improving

Well, that might be the appearance, but I can tell you that it's fueled in large part by companies going through extreme downsizing to stay profitable (hence a "jobless recovery"). You can't call this a real recovery until people start spending money again and people won't start spending money again until they're past fearing for their jobs (those that still have jobs of course). And now we're full circle back to that confidence thing again. That's what any chief executive is supposed to bring, be it business, trade association or political.

So, understanding Bush's history with regards to leadership, how confident are you? Judging by your proclamations that the President has so little to do with the economy I'm guessing not very much.

And now, you prokpose that, somehow, all of corporate America shares your feelings about Bush, so at the first sign that he might leave office, the economy will improve?

You're not following me very well here chief, I said, "Not businesses per se, but the smart speculators, the ones that seem to be able to get in (or out of) trends very early on." Big difference between that and "all of corporate America."

I guess I get the logic, but I seriously hope you don't think you're a liberal, or a progressive, or that you know the first thing about economics.

So, exactly how many jobs have you created, businesses you've founded, run or counseled? Economics or not, it's all human nature, and it's worked pretty well for me, thank you very much.

See you at the finish line. Chao.

The excerpt from Krugman's book made me snort with laughter. He actually tries to paint the GOP as a "revolutionary power." His evidence? They want to overturn "long-established" New Deal and Great Society programs. As if those programs weren't revolutionary enough in their time. (To be fair, in the next sentences he does go somewhat further back than the 1930s, although as usual I find the supposed erosion of civil rights to be overblown.)

I just found it funny that Krugman seems to be explicitly arguing that the Left is now the establishment and that the Right is a threat to the status quo. In other words he's a "classical conservative" much as many on the right are "classical liberals." Man, it doesn't get any more fupped uck.

Thumb

I said: A president cannot force anyone to buy something he feels is beneficial

You said: Neither can a CEO.

Now you've lost me. A CEO who wants something orders his division head to buy it. If it doesn't happen we see new diviion heads until he gets one. Perhaps you are confusing the issue by comparing a CEO's effect on the economy rather than his own organization. Then you would be comparing a CEO's ability to force a customer to make a purchase. But this is not the appropriate analogy to the circumstance in questions.

Thumb writes:
You can't call this a real recovery until people start spending money again and people won't start spending money again until they're past fearing for their jobs (those that still have jobs of course).

This is a brilliant analysis ... so long as you ignore all the economic data of the past two or three years. The recent recession was caused mostly by a drop in business-to-business spending - consumer spending stayed relatively high throughout. Now you can argue the mechanisms and whether or not it was "good", but that's actually what happened.

Further, the "recovery" that has been happening for more than a year represents returned growth in GDP. That's real production and consumption that has long ago returned. Like I said, thumb's comments just don't match the actual statistics.