Good News for the Economy

[Tony]

http://apnews.myway.com/article/20031030/D7UGHGD02.html ..full article

WASHINGTON (AP) - The economy grew at a scorching 7.2 percent annual rate in the third quarter in the strongest pace in nearly two decades. Consumers spent with abandon and businesses ramped up investment, compelling new evidence of an economic resurgence.

[The Fool]

No discussion topic? No comment? Are you now working as a volunteer reposting bot for apnews?

[komencanto]

Wow, not they can beat the chinese at their own game of explosive economic grown.

[Segnosaur]

Well, I believe in giving credit where credit is due:

Thank you economic cycle.

Several months ago, many people were criticizing Bush for his poor economic record. Many people (including myself) defended him, saying that it was part of the regular economic cycle. Now that the economy has picked up again, I have to give most of the credit to the cycle. (I think the tax cuts were a good idea, but things would probably be looking better anyways, regardless of who was in the white house.)

Hopefully it will keep going, but I know there's still a good chance it will stumble. Keep spending folks!

[Zep]

There's nothing like a war to kick-start an economy...

Hmmm....


I wonder if THAT was the REAL excuse for Operation Iraqi-Freedom....

[corplinx]

Originally posted by Segnosaur
Well, I believe in giving credit where credit is due:

Thank you economic cycle.

Several months ago, many people were criticizing Bush for his poor economic record. Many people (including myself) defended him, saying that it was part of the regular economic cycle. Now that the economy has picked up again, I have to give most of the credit to the cycle. (I think the tax cuts were a good idea, but things would probably be looking better anyways, regardless of who was in the white house.)

Hopefully it will keep going, but I know there's still a good chance it will stumble. Keep spending folks!

I didn't blame Clinton for the economic downturn in 1999, and I didnt blame Bush Sr. for the bear market during his administration. Likewise, I don't give Bush credit for this upswing. The last president who probably had a tangible effect on the economy was Reagan due to the drastic nature of the tax cuts he implimented and the increases in government spending. Bush's tax cuts were slim and the top end hasn't even fully kicked in yet.

What I want to see now is how democrats who flame Bush for a sluggish economy now dodge giving credit for the growth. If you blame the guy when its bad, you have to give props when its good.

[corplinx]

Originally posted by Zep
There's nothing like a war to kick-start an economy...

Hmmm....


I wonder if THAT was the REAL excuse for Operation Iraqi-Freedom....

Doubtful. There wasn't a real bump that could be attributed to Kosovo or Gulf I. The scale of these wars isn't enough for war spending alone to drive the economy the way it did during WW2.

[Segnosaur]

Originally posted by Zep
There's nothing like a war to kick-start an economy...

Hmmm....


I wonder if THAT was the REAL excuse for Operation Iraqi-Freedom....

You know, there may be something to that....

While I don't believe the anti-war people who chant "It's all about Oooiiiillll!", I do think that the effect of stablilized oil prices (once Iraq resumes full production) will have a beneficial effect on the economy. (That was one of the minor reasons I supported the war.) Plus, a democratic Iraq will probably be a better trading partner than one under Saddam.

[a_unique_person]

Originally posted by corplinx


What I want to see now is how democrats who flame Bush for a sluggish economy now dodge giving credit for the growth. If you blame the guy when its bad, you have to give props when its good.

Both sides play that game, and I would really, really appreciate it if they would stop it. They won't.

[a_unique_person]

Originally posted by Zep
There's nothing like a war to kick-start an economy...

Hmmm....


I wonder if THAT was the REAL excuse for Operation Iraqi-Freedom....

Dubya has just implemented one of the classic "Big Government" intervention kick starts of an economy from a Keynsian point of view. This is the sort of economic policy that Conservative Governments are supposed to loath, and the Lefties love.

If the Democrats had done this, you would never see the end of newspaper headlines and lead stories on the disasterous state of debt. For Dubya, they will overlook it, or mention it in passing.

However, jobs are still not doing too well, and the spending is all on useless things like bombs. Infrastructure would have been a better target.

[Supercharts]

Originally posted by a_unique_person


Both sides play that game, and I would really, really appreciate it if they would stop it. They won't.
"They" are not players. "They" play the "game" for their own advantage - in terms of what has been reported. Good news to support whatever political party is out of contention.
Economics dances to a different tune.
Leave the economy alone and everything will be alright in the end.
No one complains when things are good..

[a_unique_person]

Originally posted by Supercharts

No one complains when things are good..

Can't agree with that. America is the richest country on earth, but I still hear plenty of complaining happening there.

[corplinx]

Originally posted by a_unique_person


Both sides play that game, and I would really, really appreciate it if they would stop it. They won't.

Well, duh. :)

[epepke]

Yeah, well, if I get a job I'll think that the US economy is fine, but not before.

[dsm]

Originally posted by corplinx

If you blame the guy when its bad, you have to give props when its good.


Why??

:p

[Cain]

Paul Krugman:

The Commerce Department announces very good growth during the previous quarter. Many observers declare the economy's troubles over. And the administration's supporters claim that the economy's turnaround validates its policies.

That's what happened 18 months ago, when a preliminary estimate put first-quarter 2002 growth at 5.8 percent. That was later revised down to 5.0. More important, growth in the next quarter slumped to 1.3 percent, and we now know that the economy wasn't really on the mend: after that brief spurt, the nation proceeded to lose another 600,000 jobs.

The same story unfolded in the third quarter of 2002, when growth rose to 4 percent, and the economy actually gained 200,000 jobs. But growth slipped back down to 1.4 percent, and job losses resumed.

My purpose is not to denigrate the impressive estimated 7.2 percent growth rate for the third quarter of 2003. It is, rather, to stress the obvious: we've had our hopes dashed in the past, and it remains to be seen whether this is just another one-hit wonder.

Full Article (http://www.nytimes.com/2003/10/31/opinion/31KRUG.html)

[peptoabysmal]

Originally posted by a_unique_person


Dubya has just implemented one of the classic "Big Government" intervention kick starts of an economy from a Keynsian point of view. This is the sort of economic policy that Conservative Governments are supposed to loath, and the Lefties love.

If the Democrats had done this, you would never see the end of newspaper headlines and lead stories on the disasterous state of debt. For Dubya, they will overlook it, or mention it in passing.

However, jobs are still not doing too well, and the spending is all on useless things like bombs. Infrastructure would have been a better target.

Either you missed the part of the story that this economic news is about consumer spending or you've gotten us confused with the Palestinians.

Most American families don't budget for bombs.

Anyway, I think you can credit most of this quarter's upturn in consumer spending directly to me. I just bought a new Dodge truck that cost more than my first house (no joke!).

[fishbob]

7.2 percent annual rate in the third quarter I reserve the right to consider this data over a longer period of time. Maybe a running average over 3 or 4 quarters.

Could be an anomaly, could be the start better economic times. It may be cause for hope, but it seems a little early to be certain. I am not going to go out and buy a boat just yet.

[shanek]

Those who are reluctant to credit Bush with the economic recovery are wise to do so, as can be seen in the thread discussing a basic Macroeconomics course:

http://www.randi.org/vbulletin/showthread.php?s=&threadid=28574

From the course lectures:

The bottom line is, generally speaking, increases in the standard of living over long periods of time in any particular country are not related to social institutions, the rise of unions, the nature of government, or whether there are Democrats, Republicans, conservatives or liberals in charge. The truth is, the source of income growth in the long run is related to improvements in the productivity of labor.

It's also important to understand what " 7.2 percent annual rate in the third quarter" means:

We have to set some limit on a time period for our measurement. So typically in the United States, we measure GDP every quarter...But we report it each quarter at an annual rate...We report them by converting quarterly GDP to an annual basis. So if GDP in the quarter were actually $2 trillion, then we'd multiply it by four and report GDP at an annual rate of $8 trillion.

So this 7.2% is the amount the economy would grow in a year if this same rate of growth occured in the three following quarters.

[Tricky]

How long before that record deficit disappears?

[dsm]

Originally posted by Tricky
How long before that record deficit disappears?

What record deficit?? Ah, it's just a problem with accounting...

:p

[dsm]

Originally posted by fishbob
I am not going to go out and buy a boat just yet.

Probably a good policy...

Does anyone see anything happening in the economy that will be driving future economic growth (like the Internet did in the 90s)? Can mere productivity gains actually drive an expansion?

:confused:

[Grammatron]

Originally posted by dsm


Probably a good policy...

Does anyone see anything happening in the economy that will be driving future economic growth (like the Internet did in the 90s)? Can mere productivity gains actually drive an expansion?

:confused:

I think the next big drive and subsequent bubble explosion will be the wireless communications and content delivery. Where people will be able to do their work on their cell phone. Of course I could be wrong. :)

[shanek]

Originally posted by dsm
Does anyone see anything happening in the economy that will be driving future economic growth (like the Internet did in the 90s)? Can mere productivity gains actually drive an expansion?

Actually, productivity gains are pretty much the only thing that really can expand the economy. The Internet caused the growth that it did because it's a new technology which was very good at increasing productivity in pretty much every aspect of most every business across the board. So really, the question your asking is if there's anything in the future that will allow a dramatic increase in productivity like the Internet did. If you ask me, we haven't even reached the full potential of the Internet yet; not even close.

[dsm]

Originally posted by shanek

Actually, productivity gains are pretty much the only thing that really can expand the economy. The Internet caused the growth that it did because it's a new technology which was very good at increasing productivity in pretty much every aspect of most every business across the board. So really, the question your asking is if there's anything in the future that will allow a dramatic increase in productivity like the Internet did. If you ask me, we haven't even reached the full potential of the Internet yet; not even close.


I'm not sure I agree with this -- it seems too one-sided. Sure, the Internet increased the productivity of the general worker, but the increased amount of work (in the form of Internet jobs) that needed to be done absorbed that increase in productivity (at least for a time). The perception of the general population (beginning with the early adopters and finally the mainstream) was that the Internet could provide them with more of what they wanted (entertainment, shopping, information, and so on) and that, in turn, drove the Internet economy.

So, while I see productivity increases as an enabler of growth, I don't see it as a driver.

[shanek]

Originally posted by dsm
I'm not sure I agree with this -- it seems too one-sided. Sure, the Internet increased the productivity of the general worker, but the increased amount of work (in the form of Internet jobs) that needed to be done absorbed that increase in productivity (at least for a time).

Actually, that isn't how it works. No one would have started up those internet jobs if they hadn't figured on getting a return on their investment. People are willing to pay a certain amount to a person to work a job because they feel the gain from their work is worth more than that amount.

Productivity is really the only thing that can drive growth. How can you grow if you can't produce more?

[dsm]

Originally posted by shanek

Productivity is really the only thing that can drive growth. How can you grow if you can't produce more?

I don't know -- this still seems a little "chicken and egg"-ish. Without productivity to enable sustained growth, the economy isn't going to go very far. However, without the push of a vision about where the economy (or some portion thereof) could go, there is no driver to create the enhanced productivity to use in growing the economy.

As Grammatron suggested, wireless communication may be the next big thing, but I tend to think it already hit, bubbled, burst, and is now going through a slow steady uptick. I would like to see the Internet hit again as I still think there is much that it could do. However, the information economy is not well-established in the minds of the average person yet, so there is much to do before people will view it as worthy of paying for.

[shanek]

Originally posted by dsm
I don't know -- this still seems a little "chicken and egg"-ish. Without productivity to enable sustained growth, the economy isn't going to go very far. However, without the push of a vision about where the economy (or some portion thereof) could go, there is no driver to create the enhanced productivity to use in growing the economy.

As Grammatron suggested, wireless communication may be the next big thing, but I tend to think it already hit, bubbled, burst, and is now going through a slow steady uptick. I would like to see the Internet hit again as I still think there is much that it could do. However, the information economy is not well-established in the minds of the average person yet, so there is much to do before people will view it as worthy of paying for.

Just because you don't know what effect a particular innovation, invention, or other piece of technology will have does not invalidate the overall effect of technology in its constant increase in the amount of an economy's total output.