Why the president is AWOL on the economy

[54anickel]

http://www.azcentral.com/arizonarepublic/business/articles/0212talton12.html

Feb. 12, 2004 12:00 AM


Ideology is a lousy compass for economic policy. The liberalism of the 1970s ran aground on stagflation, the nasty stew of inflation and malaise. Now - and I hate these misleading labels - it's the conservatives' turn.

Tax cuts, the only significant economic policy of the Bush administration, have so far failed to deliver where it most matters: jobs. Bush's performance here is the worst for a post-World War II presidency, a net loss of nearly 3 million jobs. In his congressional testimony Wednesday, Federal Reserve Chairman Alan Greenspan sounded as baffled as the rest of us.

The tax cuts have helped create a federal deficit that is expected to drag on the economy for years, as baby boomer retirements loom.

Deregulation, another article of conservative faith, has been pursued since the 1980s by both political parties. Now it's clear that these policies helped seed the California power crisis, the worst scandals in Wall Street history and anti-competitive mergers that have killed hundreds of thousands of jobs.

more...

[brokensymmetry]

1. Kick!

:kick: Good article!

[cosmicdot]

2. a theme is born: he was AWOL on education, the economy, healthcare etc

and, guess where he was when he was suppose to be reporting for duty?

Bush = AWOL

:thumbsup:

[rapier]

3. notes

"The liberalism of the 1970s ran aground on stagflation, the nasty stew of inflation and malaise."

I take issue. First 'liberalsim' is not an ideology.

Second the stagflation, or rather the inflation of the 70's, was primarily a monetary phenomenon. When the dollar was unhinged from gold and currencies went on the float, and the dollar tanked, inflation was the inevitable consequense. I say this as a non gold bug.

Adding to the inflation was increased demand for stuff, oil, food etc. that were due to economic growth in the rest of the world. That was given a boost by the tangetal results of the currency float and the trend in the financial world to electronic transactions which sped money flows and liquidity around the globe seeking hot markets to pile into and inflate.

Liberalsim might be seen as the author of the dollar problem and the rejection of Bretton Woods but that liberalism isn't a political liberalism. It's the liberalism of credit. America increasingly was sending its dollar offshore to buy stuff, on credit to a huge degree, and those dollars collected in such amounts that the gold convertability had to be ended. There were more dollars than gold, something had to give. It was those dreaded French by the was who started suggesting they might want some of that gold for their dollars who really got the ball rolling.

[54anickel]

4. I will agree the author has taken quite a bit of liberty in redefining

the terms ideology, liberalism and conservatism. But the crux of the article - that the economy is forever changing and evolving and that old rules seem to no longer apply is right on.

[KoKo]

5. My worry is that this article perpetuates the Repugs and Deregulation

advocates in sympathy like Kudlow and his ilk that this is a "New Economy" and old rules of fiscal management and stock Market theory are no longer applicable. Isn't this what they sold us during the Stock Bubble? Throw away all the old accounting rules and regulation on banks which were put in place after the Great Depression and just explain away the bubbles and then the resulting scandals when the bubbles burst as just a product of the "New Economy."

I also took issue with "stagflation" being the result of "liberalism."

The more they tell us to throw out theory and rewrite the rules to suit these "new markets" the more uneasy I become that our whole economy isn't just heading for some terrible implosion. A train heading for a wreck at full speed.

But, then that's only my observation from alot of reading, some experience in investing and what I think is common sense. I don't have the economics training some of you have to sort out all the nuances of theory.