Advanced Obamanomics

[audtatious]

If you dislike Obama you are wrong regardless of your reasons. Hope and Change are exactly what we need even tho there is no substance to it.

[HashiriyaS14]

Clinton was the only fiscally conservative postwar President, period.

Reagan and Bush Sr. were fiscal conservatives in the sense that they reduced taxes, however neither one of them reduced spending, and thus they just ran up the deficit. Their net impacts to the economy, as with GW, were negative.

I would love to have "don't tax and don't spend", but I've never seen a postwar President deliver on that and I'm not sure it'll ever happen again. Given the choices of "tax and spend" (Obama) and "spend but don't tax" (GOP), I'll take the former any day. In the end, the math needs to work. Trickle-down economics is just a way of justifying bad decisions now by asserting that all the good stuff will happen later (when, conveniently, you'll no longer be trying to get re-elected).

Ultimately, anyone in the top 1% who feels that society can continue to cut taxes to the wealthy and still decrease inflation-adjusted real incomes for the middle class/poor needs to take an economics class. We are seeing the results of this folly RIGHT NOW. When the poor and the middle class gets squeezed and defaults on their mortgages, this sends mortgage securities and thus then the securities markets as a whole into a tumble, which effects the price of YOUR house and YOUR stock portfolio. You can't just let the lower half of society fail, they represent too much capital in aggregate, and they will take the top half with them into a downturn EVERY TIME. The top earners may still be able to afford to put gas into their G55 AMG's, but you can bet that their houses and vacation properties are the absolute hardest hit of all real estate (more elastic) and their dividend-derived income has plummeted (in percentage terms).

At any rate, Clinton had a LARGE hand in creating that boom that he enjoyed while President. We DO have a free market economy (generally), and he certainly can't take all the credit, but his tack to reduce the massive (GOP-created) deficit and get people investing in America again while at the same time reducing Government spending was flawless logic. Additionally, increasing the markets for American goods via NAFTA and other trade agreements went a long way to providing additional economic growth.

The man had a lot of problems, but economically, he had by far the best understanding of the relevant conundrums of any postwar President.

Additionally, and I say this as someone who is currently developing and managing a half a billion dollars worth of real estate (of all types) for a living.....ALL REAL ESTATE IS LOCAL. National averages mean little except to influence the securities markets. If you're in one part of the country, don't think you can give RE market advice to someone on the other side of it based on the situation in your own locale. It just ain't so. I manage properties in 17 states and 4 foreign countries, some are booming wildly and others are probably going back to the bank. If you don't know what you're talking about, don't offer advice.

[audtatious]

Given the choices of "tax and spend" (Obama) and "spend but don't tax" (GOP), I'll take the former any day.

Obama is "tax and spend more" while McCain is OK to keep the current tax breaks and has been leaning towards more fiscal policy in some aspects and away from it in others (cap and trade system to combat Global Warming). Revenue to the Gov has never been higher than after the Bush tax cuts, unfortunately we don't have anyone who is fiscally conservative in the Gov anymore.

[96Qowner]

I have to point out a couple things people fail to remember when they talk about which President raised taxes or which lowered taxes.

Presidents don't raise or lower taxes.

535 Legislators are responsible for setting tax rates and Departmental budgets. The President only has veto power, and that can be overridden by a determined Congress. Because of his veto, the President has bargaining power with the Congress as they write legislation, but all he can do is accept it or veto it, and he has to be careful about using up too much of that bargaining power. No Congressman ever does a favor that isn't part of a bargain.

Secondly, tax rates are not the same thing as tax revenues. Lower rates usually bring in more revenue because it leaves more money in the economy to be invested for higher profits, which are taxed.

Thirdly, rich people don't keep their extra money in shoeboxes. When they end up with more extra money, they invest it either in bonds and other interest-bearing accounts, providing more money for the rest of us to borrow and invest, or in equities, which provide jobs and income opportunities for the rest of us. That money isn't hoarded, in any sense.

[audtatious]

Presidents don't raise or lower taxes.

That is absolutely correct. He set the direction in which Congress actually agreed at the time and instituted the tax cuts as a way to stimulate the economy more post-9/11.

[HashiriyaS14]

Revenue to the Gov has never been higher than after the Bush tax cuts

In absolute dollar terms? I'd wager it better be, just because population and inflation continue to march forward as time goes on. Revenues in 2008 are always going to be higher than in 2000 or 1996, at least generally.

There's no way government revenue is higher in inflation and population adjusted terms with considerably lower tax rates.

In regards to the arguments for "trickle down" economics, with the less-taxed wealthy providing economic growth for all.....the problem is that HAS NOT HAPPENED in the last eight years. This is not conjecture, this is fact. If it had happened, inflation-adjusted real incomes for the middle and lower classes would have risen along with those of the wealthy, but they have not. I'm not sure anyone knows precisely WHY not, but ultimately, if something doesn't work, you just need to know that it doesn't work. 20 years of combined Reagan/GHWB/GWB deficit creation has proven, without a doubt, that it doesn't work. You can't tax less and keep spending, 1 + 1 doesn't equal 6, that's life.

What do you mean by "leaning towards more fiscal policy"? You can't really have more or less fiscal policy, you just have it. Doing nothing is technically a "fiscal policy", as is nationalizing all industry, or whatever.

Again, I'd LOVE us to have a real fiscal conservative, someone who's willing to seriously cut spending in order to justify a corresponding massive cut in taxes, but I don't think any President could ever find broad-based legislative support for that, at least not in our nation as it exists today. Just like with a teenager who has a credit card, it's tough to get a person or a nation to stop spending money when they're used to spending money.

EDIT: At times like this, I wish Romney was the GOP nominee. If anyone has a prayer of getting our country back on the right financial track, it's *definitely* that guy. Pity that the social conservatives wouldn't let him get elected due to his moderate stances on stuff like abortion, another reason why I'm no longer a registered Republican.

I hope he gets the veep slot though, he'd definitely be the brains of that outfit. That would make McCain's ticket MUCH more attractive to me, although for judicial appointment reasons I'm still not sure I'd vote for the guy.

[96Qowner]

In absolute dollar terms? I'd wager it better be, just because population and inflation continue to march forward as time goes on. Revenues in 2008 are always going to be higher than in 2000 or 1996, at least generally.

There's no way government revenue is higher in inflation and population adjusted terms with considerably lower tax rates.

Way:



http://www.usgovernmentrevenue...r.php

Revenue was 3.5 trillion in 2002 and 5.1 trillion last year. That's considerably better than inflation. 4%/yr compounded inflation would only bring revenues to 4.4 trillion. Tax rates do not equal tax revenues. Rates are down, revenues are up.

[HashiriyaS14]

Way:



http://www.usgovernmentrevenue...r.php

Revenue was 3.5 trillion in 2002 and 5.1 trillion last year. That's considerably better than inflation. 4%/yr compounded inflation would only bring revenues to 4.4 trillion. Tax rates do not equal tax revenues. Rates are down, revenues are up.

Hmmmm

That *is* interesting, if ferociously counterintuitive.

I zoomed the graph back to 1980 with the same end point and got this:



What's that dip? Is that the initial impact of the tax cuts? If so, what is accounting for the subsequent rise? It seems like growth was very steady for the 20 years preceding the GWB Presidency, and then it looks like things got a good bit more volatile.

The tax situation changed quite a bit during those years from President to President, and yet the rate of increase stayed quite constant, until GWB.

I'm not going to be a stubborn a55 and refute a fact that you have obviously presented, but it does still look a little odd to me, and I'd love to get more detail in regards to why it looks that way. I'm really not being sarcastic, I honestly am curious as to both how this could be true and why volatility in revenues seemed to increase so much.

[96Qowner]

Heheh, "ferociously counterintuitive" ... good term, well put, yep, it is.

That dip you see is from the recession. Remember "irrational exuberance"? All those folks who were in the market were getting 20% compounded returns .. and then ... it was OVER. The market fell. All those folks saw their portfolios decimated - a LOT of net worth and income went down the drain, mostly rich folks.

Consumer spending never once declined in the recession of 2000-01. This is because middle-class income actually increased by nearly 5 percent between 2000 and 2002, according to the latest IRS statistics. This fact runs completely counter to the Kerry-Edwards argument about a “middle-class squeeze.”

Still, overall individual income declined 5 percent during this period. Why? Upper-end income suffered mightily. The top tax brackets lost about 28 percent of their income, on average, largely from the stock market crash and the fall in high-paying jobs. Twelve percent of the folks who fought their way above $200,000 a year slipped below that level in 2002.

At the rarified income level of $10 million or more, those with the highest propensity to save and invest lost a stunning 63 percent of their income during 2000-02. Total capital-gains income fell by 29 percent, and dividend income dropped 17 percent. When Bill Clinton recently told the Democrats in Boston that top tax-rate payers don’t need the extra money, he was sorely uninformed.

http://www.nationalreview.com/...0.asp

[telcoman]

Hey I am gonna love being on these forums. You guys all seem pretty cool to me. Even the ones I disagree with.

Welcome aboard

I just hope you are not another McCain

telcoman

[audtatious]

That dip you see is from the recession.

Dot com bubble burst and continued to 2002 with Wall Street being tentative due to 9/11 as well.

[ishkabibble]

Homebuying is up over last month.

I thought YOY was what mattered when comparing housing statistics.

Gas has fallen almost a buck.

Gee... it's only $3.60/gal here now. Great... Thank god I drive an NX.

Unemployment is dropping.

Is it? The BLS says "Over the past 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1.0 percentage point. "

The Dow is climbing.

No, it's not. Pretty much all of the charts show it decreasing or flat for timeframes within the past year.

Stagflation FTL.

[smockers83]

I thought YOY was what mattered when comparing housing statistics.

Gee... it's only $3.60/gal here now. Great... Thank god I drive an NX.

Is it? The BLS says "Over the past 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1.0 percentage point. "

No, it's not. Pretty much all of the charts show it decreasing or flat for timeframes within the past year.

Stagflation FTL.

Gotta love it when people look at data and argue about it, but all they're arguing about is something relative to something else, and most likely its time. Your guys' time frames are different.

The Dow is up since mid-July. Its also up looking back at the past 10 years or even just 1.5 years ago, roughly.

We can look at housing a month-to-month basis as well, which is also reported, we can also look at YTD, quarter-to-quarter, but the data at 11:59pm of Dec 31 will sum up the year.

Gas prices may still be high, but they are still falling. They can't just magically drop to $2.50.

We can compare data to different data, it all depends on how look at it in respect to time. So if you're going to argue data, don't argue about time, argue about data.

[peetar]

Oh stop bringing the truth and facts into this argument. Right now it is more important to paint the country as if we are in a serious crisis mode. Everybody PANIC!

[ishkabibble]

Yep, part of the reason for my post was to point out that Greg's data selection criteria was pretty arbitrary.

Woo hoo! The Dow is up a tiny bit since last month! meaningless

Woo hoo! Housing is up a tiny bit since last month! meaningless

Woo hoo! Gas is a bit cheaper now that the speculative bubble has popped! meaningless

Derrrr.. duh... I'm too stupid to realize that a day is different than a year. Thanks for pointing it out!

We're not in a crisis... just a long slow period.

[AZhitman]

No.

"Meaningless" is shouting "It's time for a change!" with no specificity, plan or procedure in mind.

"Meaningless" is posting copied / pasted article after article without any context or personally-defensible position on the issue.

"Meaningless" is failing to comprehend that a journey of a thousand miles begins with one step... it took us a long time to get in this mess, it'll take more than "The Great Pumpkin" to get us out of it.

"Meaningless" is relying on some bureaucrat to fulfill your hopes and dreams because you're too goddam lazy to get up off the sofa, switch off the TV and go make life what you want it to be.

My points? Far from meaningless.

[peetar]

Here are the facts about the economy under "shrub". No matter how you slice things, the economy is not in a recession and has not been no matter how easily the media has convinced you of it.Look, I am not the biggest fan of GWB but if you are going to state the economy is in ruins and he is at fault, I am going to bring out the actual facts on the matter...A year before Bush took office, the stock market peaked and subsequently declined 8% by the end of 2000. The last four fiscal quarters under President Clinton showed steadily declining GDP growth rates of 4.8, 3.5, 2.4, and 1.9 percent, respectively. When Bush took office, the US Government was still operating under the fiscal budget signed by President Clinton, and would remain so for more than another eight months. Within six weeks of Bush being sworn in, the economy was officially in recession.

From 2003 through 2006, all under President Bush and a Republican Congress, real GDP grew over 3% per year, considered a healthy and sustainable pace. By early 2008, the real economy had grown about 20% since Bush took office. Since President Bush took office, the economy has grown in every single fiscal quarter; there has been no quarter of negative real growth.Are you better off now than you were eight years ago? If you are anywhere near average, yes. Personal, disposable, inflation-adjusted income grew 9% in the first six years under Bush. Since Bush has been President, the unemployment rate has remained under 6.3% and averaged 5.2% (In Clinton's eight years it remained under 7.3% and also averaged 5.2%.)

Im just sick and tired of all this BS about the economy being "the worst since herbert hoover" that leftys keep spouting. Facts are facts. Period.

[audtatious]

Stop confusing them with facts

[rn79870]

Your points are well thought out and interesting. Regan won his first term by asking "are you better off now than you were 4 years ago." The answer to that question was apparently "no."

Obama is asking whether you are better off now than you were 8 or even 4 years ago. The answer to that question, for the majority of people is "no."

Ask any small business owner if we're in a recession now. The answer will be a resounding "yes we are." Maybe the government statistics don't equal a recession, but consumer confidence is at recession levels. People are holding off on major purchases. Look at the current incentives being offered by the auto manufacturers. 0% financing, even employee costs for purchasing new vehicles. I think we need to look beyond the textbook definition of recession and realize that the public believes we are in one, and they expect leadership to pull us out of this problem. It doesn't help when a candidate keeps saying "I believe the underpinnings of our economy are strong..." The public just doesn't buy it.

By the way peetar, I enjoy your well thought out responses and I hope you spend more time here.

[HashiriyaS14]

Ask any small business owner if we're in a recession now. The answer will be a resounding "yes we are."

I'm getting pretty tired of everyone speculating as to whether or not we're in a recession when it's not a speculative issue. The answer to this question is absolute, much like "is it raining"?

A recession is defined as two or more quarters with negative economic growth, i.e. economic shrinkage. The GDP has yet to shrink for even ONE quarter, and so we are most definitely not in a recession.

It's definitely a downturn, as the rate of growth has slowed, but it has yet to actually RECEDE, and thus it is not, by definition, a recession.

A slowdown in the RATE OF GROWTH is not a recession, only negative growth (for two or more quarters) is a recession, period.

Everyone is guilty of misusing this term, across both parties.

EDIT: This was not meant as a rail against RN. I agree that consumer confidence is at recession levels and that this is still a serious downturn that needs to be addressed. I do not believe that "the fundamentals are strong", but I'll continue to assert that we haven't actually attained a textbook recession as yet.

[smockers83]

Yep, part of the reason for my post was to point out that Greg's data selection criteria was pretty arbitrary.

Woo hoo! The Dow is up a tiny bit since last month! meaningless

Woo hoo! Housing is up a tiny bit since last month! meaningless

Woo hoo! Gas is a bit cheaper now that the speculative bubble has popped! meaningless

Derrrr.. duh... I'm too stupid to realize that a day is different than a year. Thanks for pointing it out!

We're not in a crisis... just a long slow period.

Probably one of your worst posts yet. If something in the economy is going to go up or down, it has to start somewhere. Lots of economic data is reported monthly so how is his selection arbitrary? Its not like it jumps/falls sporadically and in large numbers, things have to start somewhere. The Dow in the past month is up nearly 3%, the S&P is up just over 3%, and the NASDAQ is up 4.5%. To compare the stock market by looking at peaks and troughs is the worst way to look at it. The speculative bubble on gas prices has yet to pop, there is still speculation going on.

[smockers83]

A recession is defined as two or more quarters with negative economic growth, i.e. economic shrinkage. The GDP has yet to shrink for even ONE quarter, and so we are most definitely not in a recession.

A popular definition of determining a recession, but it isn't necessarily true.

I agree that consumer confidence is at recession levels and that this is still a serious downturn that needs to be addressed. I do not believe that "the fundamentals are strong", but I'll continue to assert that we haven't actually attained a textbook recession as yet.

Consumer confidence is at all time lows, I believe, almost exclusively because of gas prices and their subsequent effects. You talk to people, all they complain about is gas prices, and more so food these days. If you watch gas prices and the consumer confidence, they're pretty much moving together.

[AZhitman]

1) Maybe the government statistics don't equal a recession, but consumer confidence is at recession levels.

2) Look at the current incentives being offered by the auto manufacturers. 0% financing, even employee costs for purchasing new vehicles.

3) I think we need to look beyond the textbook definition of recession and realize that the public believes we are in one, and they expect leadership to pull us out of this problem.

4) By the way peetar, I enjoy your well thought out responses and I hope you spend more time here.

1) The New York-based Conference Board's consumer confidence index rose to 56.9 from 51.9 in July, which was a 16-year low. The increase was better than economists predicted. Still, sentiment is far from rosy.

Yay, assumptions!

2) Most of which are from the Big Three, which we have already established are in this boat of their own accord. Offloading slow-selling dinosaurs is a consequence of poor planning. Small cars are commanding record prices... Want proof? Go shop for a Prius, be prepared to be placed on a waiting list.

Zero-percent financing is nothing new, dealerships have been offering that for a decade.

3) So, what you're saying is, "I think we need to ignore facts and drive people into a false panic so we can fix something that's not really as broken as we claim it is."

Ignoring definitions is dumb. Words mean things. Changing their meaning to suit political ends is foolhardy. If we're in a recession, then let's treat it as such. But don't lie to people. We're not in a recession.

4) Agreed 100%. Welcome aboard, peetar.

[rn79870]

#1. which was a 16-year low... 'nuff said.

#2. Most of which are from the Big Three...So it doesn't matter that they are giving month (unpaid) vacations to their employees? It just isn't cars, it's cups of coffee, magazines, even restaurants who are feeling it.

#3. false panic? There is a big difference between panic and cutting back. Most business owners I know (and I deal with them daily) are reporting some work, but not a backlog of work. They are therefore avoiding acquiring, hiring or expanding. They feel the money they have is better off in the bank where it insures they will survive this "recession." If you're expecting the government to call today's economy "in a recession" you're going to be waiting another 6 months or so, until all the factors are in and digested, and GW is out of office. This way, they will point out that the word recession wasn't used on a republican watch. We know better. We're in a recession. I hear it from small business owners every day.

[rn79870]

Probably one of your worst posts yet. If something in the economy is going to go up or down, it has to start somewhere. Lots of economic data is reported monthly so how is his selection arbitrary? Its not like it jumps/falls sporadically and in large numbers, things have to start somewhere. The Dow in the past month is up nearly 3%, the S&P is up just over 3%, and the NASDAQ is up 4.5%. To compare the stock market by looking at peaks and troughs is the worst way to look at it. The speculative bubble on gas prices has yet to pop, there is still speculation going on.

Yeah, the Dow went down 245 points a few days ago. I don't see people rushing out put their life savings in the stock market now...The dow as of 7/12/08Last 6 Months, -12.62%. Last 12 Months, -17.19%.

It goes from 14160 to 11600 in a the last year and a one day climb is good news? That's a loss of over 2500 points. The trend is still falling.

[srellim234]

Not a conflict, people. The Associated Press has reported that a number of states, with California being prominent among them, are in a recession. While the commonly accepted "two quarters of decline" rule may not define the entire country, what rn is experiencing here in this state is a recession.

The National Bureau of Economic Research uses other factors in addition to GDP to measure a recession, although GDP is the bulk of it.http://www.econmodel.com/class...n.htm

Even John McCain, on April 14 of this year, told the National Associated Press forum that the economy is in a recession. That he was more concerned "helping people....than figuring out what the technical definition of a recession is."

The real problem is finding a solution that will turn the economy around from its decline, whether it's reached below the line nationally already or not. In many states, it already has gone below that line.

[telcoman]

Here are the facts about the economy under "shrub". No matter how you slice things, the economy is not in a recession and has not been no matter how easily the media has convinced you of it.Look, I am not the biggest fan of GWB but if you are going to state the economy is in ruins and he is at fault, I am going to bring out the actual facts on the matter...A year before Bush took office, the stock market peaked and subsequently declined 8% by the end of 2000. The last four fiscal quarters under President Clinton showed steadily declining GDP growth rates of 4.8, 3.5, 2.4, and 1.9 percent, respectively. When Bush took office, the US Government was still operating under the fiscal budget signed by President Clinton, and would remain so for more than another eight months. Within six weeks of Bush being sworn in, the economy was officially in recession.

From 2003 through 2006, all under President Bush and a Republican Congress, real GDP grew over 3% per year, considered a healthy and sustainable pace. By early 2008, the real economy had grown about 20% since Bush took office. Since President Bush took office, the economy has grown in every single fiscal quarter; there has been no quarter of negative real growth.Are you better off now than you were eight years ago? If you are anywhere near average, yes. Personal, disposable, inflation-adjusted income grew 9% in the first six years under Bush. Since Bush has been President, the unemployment rate has remained under 6.3% and averaged 5.2% (In Clinton's eight years it remained under 7.3% and also averaged 5.2%.)

Im just sick and tired of all this BS about the economy being "the worst since herbert hoover" that leftys keep spouting. Facts are facts. Period.

Are we on the same planet?

Telcoman

[ishkabibble]

My points? Far from meaningless.

Your points aren't meaningless, but your "supporting data" is.

[ishkabibble]

Probably one of your worst posts yet.

Good. I'm seeing how low I can go before I hit the level of one of your esoteric musings.

If something in the economy is going to go up or down, it has to start somewhere.

Brilliant observation. Like a Yogi Berra quote minus the humor.

Lots of economic data is reported monthly so how is his selection arbitrary?

Because minor changes in MOM housing data are not that significant? (housing is seasonal, so YOY is generally used for comparison purposes)

To compare the stock market by looking at peaks and troughs is the worst way to look at it.

Show me where I was doing that.

The speculative bubble on gas prices has yet to pop, there is still speculation going on.

Ok, maybe it just deflated a bit.

[peetar]

Are we on the same planet?

Telcoman

Dispute or disprove one, just one of the facts that I have laid out here. Everything I posted is true.I'm not saying the economy is perfect, it never is. What I am saying is that as a relative measure of health we are only in a slowdown. The economy is cyclical. placing blame on anything negative that occurs economically on the current President (whom you happen to HATE with vitriolic fervor) only illustrates your own historical ignorance about trending data. It is also indicative of a purely emotional response and a worldview that displaces reality and supplants it with your own finely tuned bias.So, NO, we don't live on the same planet. I am a realist.