The 'Mysteries' of Bushenomics
by Larry Beinhart
Supposedly we are in a sustained economic recovery and have been since 2002.The full test of the piece is here ...
Part of this is Bush hot air and the Republican Noise Machine, which the media quotes verbatim.
By a certain measure, however, it's real.
The economy has grown. Corporate profits are at an all-time high. Average income is up. There's lots of money around.
But the recovery has some really strange features. Oddities never before seen in a recovery.
-- Jobs: During Bush's first term the US actually lost private-sector jobs.
It finally improved in 2005, and now job creation is almost keeping pace with the increase in population. Still, over all, it's the worst record since Hoover, the fellow who presided over the onset of the Great Depression.
How do you have a recovery without creating jobs?
-- Income: Yes, average income is up during the tenure of the current administration.
The joke about average income is: Bill Gates walks into a bar. The average income of every person in the room immediately goes up 10,000 percent.
This morning's e-mail contained a response from a friend that adds to the thought:
He breaks it down much better than I do.My friend is what some might call a bleeding heart liberal, by the way, but the comment sounds very conservative. I wonder why the conservatives don't seem to understand "economics" this way. Perhaps it has something to do with an inability to see beyond personal, short term interest. "If its good for ME then it MUST be good for the nation!"
I've been arguing for many years that the measuring devices currently in use don't do anything to reflect the real state of the economy.
The United States has been giving away manufacturing for generations.
Eventually you cannot create real wealth if you don't make anything.
"American" cars have parts from all over the world now.
"American" computers are made all over the world, of parts from many more locations.
There are no American SLRs.
There are no American consumer audio companies.
Toshiba TVs have more American components than Zeniths.
Americans "invest" to earn money. But the "investment" doesn't stay here.
We're working and spending ourselves into a state where the country's debt is owned by countries like China. China has the cash to buy our debt, so they have.
There are lots of scenarios in which China could bankrupt the U.S. just for fun and grins.
While Bush has certainly made things worse, even Clinton didn't really buck the trend of losing real assets. The paper economy boomed during his years in office. But when the dot com bubble burst, much of that "profit" vanished. (The author might have mentioned that in his percentage readings.)
The jobs giveaway has been going on since the 1950s. I don't know why the decisions are what they are, but I have seen American business withdrawing piece by piece from all real manufacturing.
Until that's reversed, and we start bringing those jobs home, we're going to continue to be the whipping boy of the Third World.
Look what happened to Great Britain after they farmed out most of their manufacturing to the colonies.
We aren't far behind.