This week in economic news: McCain has a very odd definition of economic progress, Bush is confused about the definition of recession, and a massive new foundation takes aim at Social Security and Medicare.
Dean Baker | April 24, 2008
1. If By "Progress" You Mean "Collapse."
What was Senator McCain thinking when he recently boasted about the "economic progress" that we have seen over the last seven years?
It's not clear what "progress" Sen. McCain had in mind, but it's hard to find data that would support his case. Start with the unemployment rate. It has increased from 4.2 percent when President Bush took office in 2001 to 5.1 percent and rising today. Even more striking, in 2001, 64.4 percent of the population was employed, but, by March of this year, employment had fallen to 62.6 percent. Four million fewer people are employed today than in 2001.
Adjusted for inflation, the average hourly wage is 3 percent higher today than in January of 2001, but an annual growth rate of 0.4 percent isn't much to brag about. Even this progress is illusory, however. The 3 percent gain was a result of momentum from the late 1990s and occurred entirely between 2001 and 2002 -- wages actually declined from 2002 to 2008.
Furthermore, the percentage of people without health insurance has risen substantially during the Bush administration (as has the absolute number). The Census Bureau reports that in 2006, the most recent year for which data is available, 15.8 percent of the population (47 million people) was uninsured. In 2000, the figure was 13.7 percent (38.4 million people).
It is not clear what measures Sen. McCain had in mind when he praised the economic progress of the Bush years, but he clearly was not referring to the measures that most of us care about.
2. If by "Recession" You Mean "Economic Boom."
President Bush says that the economy is not in a recession. He's wrong. According to the Bureau of Labor Statistics, the economy has lost jobs for three consecutive months while the private sector has lost jobs for four consecutive months. This has never happened except in periods associated with recessions. The private sector has now lost 320,000 jobs since November.
Need more evidence? The unemployment rate is up 0.7 percentage points from a year ago, residential construction continues to fall, and nonresidential construction is now falling as well. Consumption, which accounts for 70 percent of gross domestic product, has been flat since November. Despite all this, President Bush still doesn't think we're in a recession? I guess that's no surprise coming from someone who thinks that things are going well in Iraq.
3. Attack of the Demographic Fear-mongers
A few weeks ago, a group of highly respected budget-wonk types gathered at the Brookings Institution to warn of the threat "entitlement programs," (i.e., Medicare, Medicaid, and Social Security) pose to the long-term health of the budget. This crew wants to make Congress reapprove funding levels for these programs at five-year intervals, in the hope that some future Congress will impose serious cuts.
http://www.prospect.org/cs/articles?article=the_meltdown_lowdownSS and Medicare are NOT "entitlement" programs, they are insurance programs that people have paid into their whole lives. Don't let them change the language to imply old people are on WELFARE! When they use the word "entitlement" SLAP THEM!
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