Bush v. Clinton Economy

[Dr. Shane]

White House says economic surge robust

The White House says the economic surge that began five and a half years ago on President Bush's watch is more robust than the much-touted expansion during the Clinton administration...

"That's a rather absurd claim," said Sperling, a senior fellow at the liberal Center for American Progress. "In terms of job creation, in terms of wage growth, in terms of business investment, in terms of poverty, there's absolutely no comparison."...

"If you go back to this point in the Clinton expansion," Fratto said, "they would have loved to have seen the numbers that we have right now."

"On the unemployment rate, we're a full percentage point below where they were at the same point in the expansion - 60 or 61 months in," he said. "They would have loved to have been at 4.4 percent. They were still up in the mid-5s, which is huge, when you think about it."...

Economist Larry Kudlow said the Clinton and Bush expansions "each have their minuses and pluses."

"Every expansion has a little different coloration," he said. "The Clinton years were colored by the technology boom and the dot-com boom, which ultimately produced a bubble that burst. The Bush years were colored by the tremendous housing boom from the Greenspan interest rates, and we're undergoing some kind of a bubble bursting right now."...

"Since the early Reagan years, we have had 25 years of virtually uninterrupted prosperity," Kudlow said. "Because of the Reagan reforms - the deregulation, the lower taxes, the disinflation - we have transformed the economy from a top-down, government-run operation into a free market, capitalist economy with durability and resilience."

White House: Economic Stats

[Woody]

Yes .... I heard this on the news tonight.

I think that the economy will be Bush's legacy.

[bevin]

The figures for New Hampshire show that a lot of high-tech workers have moved to much lower paying low-tech jobs

The unemployment numbers do not show the whole truth.

The increase in housing prices is a direct result of the decrease in interest rates - and does not represent any increase in the national wealth or productivity at all

/Bevin

[Dr. Shane]

If workers are earning less (like liberals claim) and housing costs are increasing, why oh why are more poor people able to own their own home?

Facts are facts. The economy is doing awesome, fantastic, hard to imagine things going better. However the war in Iraq is going bad, terrible, hard to imagine it worse. And that, like the Lewinsky scandal for Clinton, is likely to be Bush's legacy. History books are not likely to recount the great economies under either Clinton or Bush but remember them by their failures instead.

[bevin]

The decrease in mortgage rates means that a smaller monthly payment will pay for the same mortgage. This means that a poor person can afford the house at the old price. Which means that the demand is up, which means that the price goes up.

/Bevin

[Bravus]

...not to mention a whole lot of short-term solutions like 'low start' loans where people pay interest-only or pay a lower rate for the first year or two. All it's going to take to burst the bubble is a rate rise, though. Hope the landing is gentle.

[Dr. Shane]

A lower interest rate only explains how people with a steady or slowly increasing rate can afford to buy homes. If, as many liberals try to sell, the actual take-home pay of the poverty-stricken American is decreasing, he or she would not be in a position to buy a home even at lower interest rates.

Real American wages have not been growing much of this decade like they did in the past decade but that has a lot to do with fuel and spiraling health-care costs. When the cost of fuel and health insurance increases it absorbs more of a company's profit and there isn't as much to increase workers' salaries. This past year it seems that we are pulling away from that as much of the economy has adjusted to hirer fuel costs and real wages actually grew this past year faster than inflation.

IMO, there are certain geographical areas where the real-estate bubble is going to burst (Texas is not one of them). And just like when the dot.com bubble burst, it is going to hurt a lot of people.

A brisk rise in American wages

[bevin]

The following is a simplification

Consider a country that has three groups of people, and the sizes of those groups and their home-ownership rates has changed as shown

___________1990____________2010

poor_______20x 5% = _1_____50x10% = 5

middle_____60x90% = 54_____30x90% = 27

rich_______20x90% = 18_____20x90% = 18

Now the claim can be made that 5x as many poor people can afford houses in 2010 compared to 1990, and so this is a tremendous leap forward. In fact it is a giant step backwards, because it has come about, not by increasing the quality of life of the existing poor, but by increasing the number of poor people!

The symptom is the disappearance of the middle group.

And this is exactly what is being seen in New Hampshire.

/Bevin

[bevin]

Quote:

not to mention a whole lot of short-term solutions like 'low start' loans where people pay interest-only or pay a lower rate for the first year or two.

Right - and the reason such high-risk loans are being made by the lenders is they insufficient low-risk places to loan the money too compared to the amount of money they have to loan...

/Bevin

[Dr. Shane]

The middle class is not growing smaller in numbers. It appears smaller because the lower class is growing at a faster pace and that is due to the influx of immigrants. And more in this larger lower class are able to buy homes.

No matter how the anti-Bush people want to slice it, they face the same reality that the anti-Clinton folks did in the past decade. The facts are just against them. Bush has done very good with the economy but it is over-shadowed by the war in Iraq. Anti-Bush folks should be happy with criticizing his Iraq policy and give credit where credit is due. When they insist on criticizing him on absolutely everything he has done, they only expose themselves as ideologues.