A Different View Of The Administration
In the midst of an essay, worth reading in its entirety, on the fading political impact of 9/11, John McIntrye makes the following astute observation:
In the months following 9/11, with an economy already in the middle of a deflationary spiral brought on by the collapse of the NASDAQ 5000 bubble, if you would have told people that the country would pull out of its economic slide and experience the growth we have seen the last three years and we wouldn’t be hit again by terrorists, most people wouldn’t have thought it possible.
Many of my readers from the left take it as a given that the Bush administration has been a failure, perhaps reading too much into approval ratings. McIntyre suggests a far more relevant standard, and it points to success…
Once again, I think this is a testament to the country as a whole, not the presidency of George W. Bush. Also, while true we have not been hit again by terrorists (in this country), 2500 troops have been killed in Iraq, which is getting closer and closer to the number of lives lost on 9/11. I have a great difficulty substantiating the same number of lives lost to prevent another 9/11. I mean, if the cost of preventing another large terrorist attack is 2500 lives lost and $200B every 3 years, how exactly does that come out as a win? Not to mention the fact that there have been many more billions of dollars spent at home to prevent another 9/11 with increased security at airports, the creation of various departments (of homeland security for instance), etc.
I don’t know why anyone would have predicted the economy to continue to be poor for any amount of time. America has a robust economy. Unemployment was very low in 2000 when Clinton left office.
It’s really silly too when people say “with an economy already in the middle of a deflationary spiral brought on by the collapse of the NASDAQ 5000 bubble”. The NASDAQ bubble bursting in itself does nothing to the “economy”. The NASDAQ is an indicator of the economy (i.e. it points to something in the economy). When the NASDAQ changes (or the DOW or S&P) that signifies a change in something in the economy. That is not to say some other change won’t make up for losses in the stock market. My beef is that this is a simpleton explanation for an economy that wasn’t performing up to par with it’s previous self or, perhaps the expectations of it’s previous self.
My feeling is we’re not really going to be able to judge this presidency adequately for another 20 years or so. I don’t take it as a given that his administration has been a failure, but that is my opinion at this time.
The NASDAQ bubble bursting was a HUGE disruption to the economy. $7 trillion dollars in paper wealth evaporated in thin air…it’s not that some arbitrary number called an index fell – that index measures the values of companies, companies owned by shareholders, and in this day and age of almost all middle-class and even some lower-class exposure to the market, more people got hurt than didn’t…even if indirectly, by the value of their retirement investments declining…
Well, yes and no. As the NASDAQ swooned, bonds and real estate soared. It’s not as though we’ve had asset deflation – only the “creative destruction” of capitalism being fickle in picking winners and losers.
I’m fully aware, but what I’m saying is that the NASDAQ is an indicator, not the economy itself. It was indeed the supposed values of the companies, but not the actual value. Retirement investments did indeed decline, but that doesn’t effect the ‘economy’ that much. It was a blip on the radar. Real GDP/capita decreased slightly from 2000 to 2001, but increased in 2002, even after 9/11 occurring. Yes, people were somewhat pessimistic, but they didn’t really change their spending habits much, but they certainly changed their level of optimism when purchasing already over-valued stocks!
Sorry, we’ll just have to agree to disagree – a 60% decline in the value of the NASDAQ is not a ‘blip’…
peter, you’re right that some of the funds (for smart investors, anyway) were simply withdrawn and moved to other sectors – but that still leaves the huge dampening effect on expectations, and then with 9/11 right after – well, that’s a double-whammy of mammoth proportions…
Yeah mikebdot, you’re right. I guess we should have just sat on our hands after 9/11 and taken our chances leaving everything the way it was. I mean come on, look at the all the money and lives it would have saved! I suppose the fact we haven’t been attacked in nearly five years doesn’t necessarily prove we are more secure, either…
It’s not my intention to be nasty, but this line of reasoning is ridiculous. You ask “if the cost of preventing another large terrorist attack is 2500 lives lost and $200B every 3 years, how exactly does that come out as a win?” Well, I think it’s probably a win because there haven’t been haven’t been any more days like 9/11 (and there would have been. I think this has been well-established from information obtained from captured terrorists). Please don’t discredit the deaths of those other 2500 by implicating their deaths haven’t accomplished anything to make the U.S. more secure. We knew there would be casualites in this war, and part of the strategy to limit the number of American casualites was to take the fight to terrorists rather than let them bring it to us. No matter what your view on the motives or function of the Iraq war, this part of the strategy has worked. I hate to see our troops die, but there is no group of people I would rather see deal with terrorism in the trenches than our military, even with all it’s problems. Though it’s an impossible statistic to measure, I think that 2500 over three years is better casualty ratio than 2500 in one day occuring multiple times.
Plus, it’s interesting how those of you leaning left are explaining the economy’s success. Back during the “recession”, a huge liberal talking point was “Bush is wrecking a formerly strong economy.” Now that the economy is flexing its muscle, you say “well of course it has recoverd because there wasn’t any real danger in the first place.” I’m not sure if you’re guilty of that, mikebdot, but I hear it from others who certainly are. Surely this President is not responsible in any way for making that recovery more successful by doing much to increase security (sarcasm again)…
Yeah mikebdot, you’re right. I guess we should have just sat on our hands after 9/11 and taken our chances leaving everything the way it was. I mean come on, look at the all the money and lives it would have saved! I suppose the fact we haven’t been attacked in nearly five years doesn’t necessarily prove we are more secure, either…
It’s not my intention to be nasty, but this line of reasoning is ridiculous. You ask “if the cost of preventing another large terrorist attack is 2500 lives lost and $200B every 3 years, how exactly does that come out as a win?” Well, I think it’s probably a win because there haven’t been haven’t been any more days like 9/11 (and there would have been. I think this has been well-established from information obtained from captured terrorists). Please don’t discredit the deaths of those other 2500 by implicating their deaths haven’t accomplished anything to make the U.S. more secure. We knew there would be casualites in this war, and part of the strategy to limit the number of American casualites was to take the fight to terrorists rather than let them bring it to us. No matter what your view on the motives or function of the Iraq war, this part of the strategy has worked. I hate to see our troops die, but there is no group of people I would rather see deal with terrorism in the trenches than our military, even with all it’s problems. Though it’s an impossible statistic to measure, I think that 2500 over three years is better casualty ratio than 2500 in one day occuring multiple times.
Plus, it’s interesting how those of you leaning left are explaining the economy’s success. Back during the “recession”, a huge liberal talking point was “Bush is wrecking a formerly strong economy.” Now that the economy is flexing its muscle, you say “well of course it has recoverd because there wasn’t any real danger in the first place.” I’m not sure if you’re guilty of that, mikebdot, but I hear it from others who certainly are. Surely this President is not responsible in any way for making that recovery more successful by doing much to increase security (sarcasm again)…
Now, I’m not an all or nothing Bush supporter. I think, in the long run, his foreign policy will be remembered for a lot longer than his domestic policy. Ultimately, I think the president’s successful security policy (successful in the sense that there hasn’t been another attack) cannot be separated from the success of the current economy.
Mark, I’m not talking about a blip to NASDAQ, I’m talking about a blip to the economy. Let’s say economy is performing at some level x and NASDAQ was saying “The [tech] economy is going to perform at x*10 in 3 years!!!, everyone, jump on the bandwagon!!!” and it turns out the [tech] economy only performs at x*1.5 in 3 years, the fact that the NASDAQ lost so much value says nothing about the economy as a whole, it says something about the failed predications of the economists saying it’s quite alright to spend 120*profit for a stock. “Recovering” from this requires nothing more than tons of companies folding and many people being fired, which has occurred. Most serious people knew the stocks were overvalued but decided to try to make a buck while they could. People trading the stocks lost nothing as they make a buck regardless (they just lose on the reputation end of things, or lose if they do insider trading and get wrong info, which never happens of course…). In any event, I’m not disagreeing that NASDAQ lost a ton of value, but the NASDAQ losing value didn’t cause the economy to “underperform”, the “underperming” economy caused the NASDAQ to lose value…
“underperFORming”…
Mike, what can you possibly mean when you say “People trading the stocks lost nothing as they make a buck regardless”? Seriously, all snark aside?
If I buy Digital Island (which I did, back in the day) at $8 and sell at $40 (both approximations) I did well and I made money, albeit money that I’ve long since squandered (and yes, this is a small portion of the activity reflected in the value of the NASDAQ, so it does relate).
If I bought JDS Uniphase at $75 a share (which I did not, thank God) and it goes into the tank, and I sell to stop the bleeding at $6 a share, I lost $69 a share. Not theoretically, in actuality. With 1,000 shares, I’m out $69,000 – that’s real, substantial, catastrophic loss…
There is no basis for your belief that people trading stock at the height of the NASDAQ meltdown lost no money – they did – untold billions, in fact…
Evan, you think the people we’re currently fighting in Iraq are the ones responsible for 9/11?
I’m not saying I don’t think it was necessary to perform some sort of action. I think Afghanistan was necessary and valuable. I think we could have taken that momentum and done quite a bit more fighting terrorism than going into Iraq and literally wasting billions of dollars and thousand of lives. Damn right I said that. Wasted. That’s what I think of George Bush’s little excursion.
That being said, I will immediately defend myself from you saying that this does not “discredit” their lives in any way. I am discrediting the decision to go to war. The reason I am so vocal about this issue is because I value the lives of these citizens greatly. I see this all the time in righty dialogue and I don’t agree that people vocal against the war or claiming this is a “quagmire” are discrediting soldiers, they are trying to prevent more of them from being killed unnecessarily. I think Jesus honestly believed he was dying for my sins, but that doesn’t mean I agree that is the case. The soldier’s obviously believe they are helping the country and for that I commend them, but I don’t agree that is the case. I hope I’m wrong. I honestly do.
There is plenty that can be done to secure the borders, working with other countries in a direct manner to prevent further occurrences, being generally vigilant, etc. Do you disagree that our resources could have been deployed in a more efficient manner? Do you really think there would have been another 9/11 (2500+ deaths) had we not gone into Iraq in the past 3 years? That event took us completely by surprise (the general public anyway) and now we continue to remain on guard.
As for the economy business, yes, I agree, there are many on the left guilty of the very activity you describe. They say “oh, Bush isn’t doing anything” and then claim that the “Clinton economy” was the greatest thing since sliced bread. It’s absurd. But, anytime someone mentions a great statistic I can’t help but think “this is not any better than Clinton’s economy and thus the tax cuts have not proven anything to me yet, especially since we’re running enormous deficits right now”. I would be perfectly comfortable saying the Bush economy is great had he cut programs to pay for the tax cuts but he did not (or rather, congress did not) and even though we’re spending $200B on the war, he made the tax cuts a high priority (one of his only priorities in fact).
Mark, not the owners of the stocks, the people trading them (the brokers, etc.) They had nothing to lose by allowing their clients to pay far too much (besides reputation..insider trading). Sorry I wasn’t clear. My argument is, that lost money wasn’t real money to begin with anyway, it was money that was used to purchase paper money that they thought was going to increase. It was tied up regardless of how poorly the stocks ended up. It is money that could not eventually be used for other capital investment or some other such activity, but the reason it crashed was because people were paying too much to begin with. My argument is it evens out.
Let’s say you spent $75 on JDS Uniphase and it went up to $150, but was only ACTUALLY worth $90, that’s $60 that does not physically exist, yet was counting towards a great economy. All it did was make the preceeding years look a little better because of the overvalued crap stocks and 2000-2002 a little worse when all the companies died. It evened itself out. The economy of 97, 98, 99 was a farce. Possibly even earlier. That’s my general point. GDP is a much better indicator of the economy to settle this problem.
Well, not to put too fine a point on it (I guess we’ll have to agree to disagree again on this topic) – if I could sell JDS Uniphase for $150, and there were buyers, then the stock was worth $150. All it takes is a buyer and a seller to establish the worth of something.
Nevertheless, I think we’ve probably hit a wall here on convincing the other…but thanks for the clarification, I see what you were saying now…
Mark, probably, just one more point. If I was the sucker who paid $150 and the company didn’t meet expectations, I’m out money and the stock returns to say, $90 (I’d probably sell prior to that, but let’s say I didn’t), then I am out the $60 a year later (or however long it takes), but truth be told, the stock will end up what it is actually worth (on average). If someone overpays, they will end up losing the money that you’re saying you gained by selling at $150. The $60 is fictitious until a product/service is actually performed and thus why I think GDP or some other measure would have been much better to cite in this case. I feel the situation is analagous to the federal debt. To overpay for a stock is to borrow money from the future (i.e. the money you gained today will be someone’s loss tomorrow).
Al Qaeda is fighting us in Iraq, so to answer the question as it is specifically worded – yes, the people we are currently fighting in Iraq (not all of them, but many for sure) are the ones responsible for 9/11. Now, I understand the intent of the question was to ask if Sadaam’s regime was responsible for 9/11, and the answer is obviously no. However, as the DOD documents released earlier this year showed, Iraq was linked to Al Qaeda and I think the evidence for a link between them will continue to mount. To what extent, I don’t know, but my inclination is that there’s more to it than meets the eye.
In any case, and I said this in my first comment, putting aside the case for war in Iraq, what the war has done is force Al Qaeda to spend a lot of time and resources fighting our professionals in Iraq rather than utilize their resources for the planning and execution of attacks on American or our allies soil. I supported the war initially because I believed the intelligence that WMD’s were in Iraq and I’ve believed since the first Gulf War that Sadaam needed to go. It appears, for now, that I, and many others, were wrong about the WMD’s, but since we are fighting Al Qaeda there and in places like Afghanistan, I will continue to support the war. We initially supported a theory (WMD’s) because we were worried about the facts it could produce (attacks on America with them). When the theory was proven wrong, the facts were such, with Al Qaeda pouring resources into killing Americans and Iraqis working with us, that Iraq became an important front for fighting terrorism notwithstanding the motives behind why that front was opened in the first place.
I cannot say for certain that had we not gone into Iraq, another 9/11 would have occured, but I’m confident that going into Iraq has made us more secure because Al Qaeda is weaker as a result of the pounding they have taken on the ground there.
I will never disagree with your right to dissent on the war, but I will say the “quagmire” and Vietnam comparisons are ridiculous. Read Michael Yon’s past work on the success of the elections and rebuilding effort for proof of that.
Okay, I know we’re in beating a dead horse territory here, but if a company sells for $150 a share today, that’s what it’s worth today – to somebody. You say the real worth is ‘fictitious’ – on the contrary; the only worth of any item that matters is what someone is willing to pay for it. Say I have a copy of Action Comics #1 that the Overstreet Price Guide says is worth $75,000 – that is an example of a somewhat ‘fictitious’ worth, because it’s an educated guess and not an offer to buy. However, if I put that comic up at auction, and it sells for $90,000, you can bet it’s worth $90,000 – and the $90,000 I will put in my pocket is not some fictional $15,000 on top of an item worth $75,000 – it’s $90,000, period.
The NASDAQ is not a survey – it is a summary of real transactions. There is nothing artificial about it.
The ‘real worth’ of a company, also, is not static – it changes with earnings outlooks, revenue growth forecasts, macroeconomic factors – and investor expectations. Expectations may be inflated, but at the very moment that I sell an item, by definition the person buying it values it at the price I sold it for.
Sorry to be tedious – it’s the economics major in me coming out…
“Retirement investments did indeed decline, but that doesn’t effect the ‘economy’ that much.”
I’m sorry, but this statement begs the question – did you own a substantial portion of stocks during this time, and did you have a substantial retirement fund as well? You sound like you had neither, and I can tell you from first – hand experience that the NASDAQ implosion was truly life – shattering for many people of modest means.
Your economics 101 screeds here indicate someone who hasn’t lived through too many (if any) economic disruptions, and has worked only a few years, at best.
I used to work with a guy who bought his house in the late 90’s on margin, and used Qualcomm stock for the margin — as someone said, you can’t fix stupid –
Dmac: You’re absolutely right, I had no stocks and no 401k as I was in college. I didn’t take any economics courses but have learned through reading various and sundry books small things here and there. What I’m trying to say (and not well apparently) is that a stock is not a good or a service, it is an investment. You can pretend it’s a good all you want, but in my eyes, it’s monopoly money. To claim the “economy” is doing well because the stock market is doing well is foolish. Just as foolish as claiming the “economy” is doing poorly because the stock market is doing poorly (which is what I as trying to say in a nutshell). Hypothetically speaking, the stock market could be booming because companies are making grand predictions/forecasts that are 1000s of times too high and if you looked at the stock market only, you would think everything is just great, but it two years when all the companies fail because they have no business model and aren’t making anything, everything will come crashing down and it won’t be the CAUSE of the economy going into the toilet, the lack of product and business plan and not meeting predictions is the CAUSE.
I was only speaking to the cause of the poor economy. I understand that many people lost quite large sums of money, but the stock market is a crapshoot.
Am I seriously making no sense here?
If someone pays $150 for the stock, but the company doesn’t meet the forecasts (because of whatever reason, market changes, bad economists, bad marketing, poor quality product, whatever) and the value drops to $90, the $60 less value did not effect the economy, all of the causes of the $60 drop in value were the cause.
Ok, tired point. Sorry to bore everyone.
Evan: I’ll continue to speak to the Al Qaeda issue in other threads in the future. I will say that I don’t think it is a “quagmire” in that I don’t think there is no hope. The hope I have is to tell the Iraqis “look, this is your country, do well, if you need our help, let us know” and then proceed to leave slowly. Permanent bases are a bad idea. I don’t think it’s like Vietnam because there we were fighting “communism” and while that is an “idea” it was something occurring within the country and Al Qaeda is coming in from everywhwere (and I would argue that it’s mostly not Al Qaeda and I’m very afraid of another attack occurring in the near future). I honestly don’t think we are more safe because of Iraq. I think we are more safe because our intelligence capabilities have grown. I think we should have spent $200B there. But, I don’t want a Big Brother-esqe state as my security is not that important. I’m not going to expect the government to prevent someone from shooting me in the face. If someone wants to do that, I need to seriously reconsider how I treat people, or, accept my fate of bad luck on that particular day. People do go crazy from time to time.
In any event. Thank god it’s Friday.
Alright, last little remark and I’ll let it go; I just can’t help myself! You seem to think owning a stock is like buying a lottery ticket and that there is not a fundamental connection between the stock market and the economy, and this is simply not true.
A stock is a certificate of ownership in a tangible enterprise, an enterprise that does produce goods and/or services. Stocks are not ‘monopoly money’; they are the epitome of capitalism. When a company issues stock, they sell ownership stakes to the public in order to raise capital. There is indeed an actual, tangible good behind the value of the stock; there is nothing arbitrary about it. All of the shareholders of Microsoft own Microsoft; Bill Gates didn’t become the world’s richest man because of his salary, but becaus of his large stock holdings, representing his ownership stake of the extremely profitable company.
You can truthfully say that there an individual stock can do well or poorly in contradiction of the larger economic trends – but the market as a whole will tend to reflect the macroeconomic picture more often than not…
For the most obvious example of the symbiotic relationship between the economy and the market, see the great crash of 1929 and the Great Depression…