The Good News: It’s The Econ…Okay, Okay, You Know The Rest!
All right, so he’s biased and he’s going to spin a little (he is, after all, deputy assistant to the president and director of the White House’s Office of Strategic Initiatives, according to the byline). Nevertheless, Peter Wehner has some stats to chew on if you’re feeling despondent over the direction of things. You really should read the whole thing, but I’ll focus on the economy, since that’s my preferred 2006 topic for the Republicans:
The American economy is the strongest in the world and growing faster than that of any other major industrialized country. It grew at an annual rate of 5.3 percent in the first quarter — the fastest growth in 2 1/2 years. It has added more than 5.3 million jobs since the summer of 2003, and employment is near an all-time high. The unemployment rate (4.6 percent) is well below the average for each of the past four decades. Mortgage rates remain near historical lows, homeownership remains near a record high, and sales of new and existing homes reached record levels in 2005. Real disposable personal income has risen almost 13 percent since President Bush took office; and core inflation rose just 2.3 percent over the past 12 months. The Dow Jones industrial average has risen from under 7300 in 2002 to above 11,000 for most of this year. Tax revenues are at an all-time high — and so is total household net worth.
I’ll resist the temptation to end the way I normally do – but you know what I’m thinking!…
I will not resist the urge to call out BS when I see it. “The unemployment rate [4.6 percent] is well below the average for each of the past four decades.” This statement is true 50% of the time [give or take, depending on trend behavoir] within any of those decades. I.E., if you take a random point in the 1980s, the chance you could say “the unemployment rate at this given point is lower than the average of the 1980s” is 50/50 [or pretty close anyway]. To say anything about the unemployment rate against the AVERAGE unemployment rate over a number of years is to compare apples and oranges. A much more convincing argument would be “unemployment is at the lowest it has been in x years”. Whatever x happens to be. I’m supposing it’s sometime in the mid/late 90s? I don’t feel like pulling those numbers up. I’m guessing ’97 or ’98.
Also, with no frame of reference for “Real disposable personal income has risen almost 13 percent since President Bush took office” it is difficult to see how this compares to any other grouping of 5 years. That’s 2.47% per year (1.0247^5 = 1.1297). How does this compare to other 5 year spans?
Dow Jones compared to low point in ’02.
Tax revenues being at all time high says nothing special as if taxes are constant, with baby boomers still working, tax revenues should increase for another few years at least.
The rest is ok. Don’t get me wrong, I’m not saying the economy isn’t doing well, but some spouting off BS statistics about it does nothing to add to the discussion. Just thought I’d wax math philosophy here.
The tax revenue thing would succumb to that criticism if tax rates were constant. But they aren’t. I seem to remember some controversy and discussion about cutting rates and the likely effects. All time high revenues were not one of them so I would say it’s pretty remarkable, especially when we consider the armageddonoid predictions of the allied status quo-ers and tax hikers. The unemp rate, yes, I don’t care for how they report this. It should always be compared to trend from some constant period, say the last 20 years or so, but with all time high participation rates in addition to this historically low number (some antedelluvians may recall that in Keynesian theory, about 5% is considered as low as one may go without excessive inflation) does make it remarkable, literally, though it could be stated with greater clarity. But as a Bushie, I am undisturbed by the naysayers. How they know is mysterious but the electorate is eerily consistent in rewarding economic success at the polls and punishing failures on unemp and inflation even when the BLS stats are yet to be corrected. Harmonic convergence, I guess.
Mega: See here. The end of page 25 and the beginning of page 26. Tax receipts during Clinton went from 1154.4 (billion) in 1993 (highest revenue to that point) to 2025.2 (highest revenue to that point) and increased every year. Not sure what the actual 2005 number is, but the estimate was 2052.8, which, is technically the highest revenue ever, but in 2000 dollars, it is 1833.1 (as compared to 2025.2). In real dollars it is not the highest revenue ever. Also, what do you think was the cause of the decrease in tax revenue in 2001, 2002 and 2003? 9/11? The recession that was caused by Clinton? Obviously, we’ll never know what the revenues would have been had 9/11 not occurred, but in any event, saying something like ‘tax revenues are the highest they have ever been’ doesn’t tell an adequate story (some might say it’s disingenuous, including myself). The same can probably be said for “total household net worth”. I doubt this is true in real dollars. Same for sales of new/existing homes [number of people able to purchase homes is enormous right now as baby boomers begin to retire and are in their prime earning period].
Pretty much the whole bit Mark quotes is hogwash. Different frames of reference for each statistic (comparing quarters for one statistic, then the last three years, then comparing to decades, then one year, then 5 years, then 1 year, then 4 years, wow, it’s worse than I first thought), not using real dollars, citing figures that are almost always true (like home ownership stat). The whole bit is hogwash, or rather, could have been done in more honest fashion. Yes, I’m aware this is done quite frequently with politics, but that doesn’t make it anything other than hogwash.
The economy is a big proof for Keynsianism: massive deficit spending will result in rapid growth in GDP. That doesn’t strike me as particularly good or bad. It just is what it is.