The feds goal was to 'reach inversion' -- then stop. The economy will take it from here.

I know the economy is doing well. But I would really be curious to see if it can do a non-bubble Clinton stretch in his last years. God, will the leftrolls be pissed.

Cause Bush is running the country into the ground, ya know.

Well, if you know what an inversion is, or an inverted yield curve is, then please share with the class, because i have no f*@%ing idea what they are! All I know is that inflation is under control, the economy is growing, and my stocks are incresing in value. Yippee!

Inversion: a reverse of the usual order

Right, the economy is growing... Just look at the DJIA is up a whole 2% and the economy is struggling to maintain itself at the same level as pre-Bush. I am all for the economy doing well and the market pushing up. I couldn't give a sh!t who is president. I want to see increasing jobs and increasing wages for lower income jobs. That is what you expect if the stuff trickles down right? Rich people invest and workers get new and higher paying jobs. That is what I want to see for a healthy economy.

If anyone cares:

An 'inversion' refers to an 'inversion' of the yield curve, which is simply a plot of the yields of government bonds against their maturities. A normal yield curve will rise, i.e., the longer the maturity of the bond, the higher the interest rate. In the past, when the yield curve has inverted, an economic downturn or recession has followed pretty much every time (but at a variable lag, of course), thus all the hand-wringing and whining when the 10-year rate dropped briefly below the 2-year rate last week.

An 'inversion' also refers to the modern-day Democrat's affliction; i.e. 'cranial-anal inversion.'

Real GDP has grown at an average rate of 2.7% during the Bush administration years as of 3rd quarter 2005. And, that's with a recession in there at the beginning of his first term that was coming no matter who was President. In fact, the tax cuts of 2001 and then 2003 most likely (and you can ask any reasonable economist on this, i.e. not Krugman) kept the recession from being much much worse. As it was, it only two quarters long, I believe the shallowest recession on record according to the Bureau of Economic Analysis.

Unemployment has averaged 5.4% since January 2001. That is pretty low to say the least. Under Clinton it averaged 5.2%, or in other words it was statistically not significantly different.

The economy is strong, and it has been for the past few years, regardless of what the New York Times says. The data bears it out.

Now, on a forward-looking basis, the economy will probably slow somewhat from its current 4% real growth pace. Most of the economists/analysts I know see 3% real growth as a "trend" or average level for the US. To provide some perspective, Europe looks more like 2% real growth, and that would be a good year after this year's 1.5% growth.

Craig said, "I want to see increasing jobs and increasing wages for lower income jobs. That is what you expect if the stuff trickles down right? Rich people invest and workers get new and higher paying jobs. That is what I want to see for a healthy economy."

Craig, in a way, you have it exactly right: Increases in jobs come late in a recovery precisely because the owners and managers first have to become confident and begin making the sorts of decisions that eventually lead to more people getting hired. Wage increases come even later because the job market has to tighten first.

There's even a name for this sort of chronological ordering; economists call jobs growth and wage increases "lagging indicators." That is, they indicate an economy has already been doing well for some time.

All of that is to say that the President's critics had a free ride for some years. The most knowledgeable ones knew in advance that job growth would bring up the rear in the recovery, because that's the way things work.

The problem with using unemployment as an indicator is that it does not represent the number of people that have left the job market. My understanding is that unemployment is only for those actively seeking employment.

I don't personally, believe that the whole of the tax cuts were responsible for staving off the recession. My gut tells me that the cuts to middle and low class workers helped maintain the spending levels as well as the low interest rates propping up the housing and credit industries.

While the jobs generally do come after a good recovery begins at the top, the "recovery" has been going on for quite a while and average hourly and weakly earning for the year are increase around 3% which is below or around the level of inflation. This doesn't equal a healthy economy in my mind. Just look at the spending this holiday season which was weak at best from the reports I have read. Just my non-economics thoughts as a scientist.

craig (Sorry about the length, Ace- but I'm feeling somewhat drunkenly obnoxious inspired!)

The problem with using unemployment as an indicator is that it does not represent the number of people that have left the job market. My understanding is that unemployment is only for those actively seeking employment.

Do you have any evidence that 'the number of people that have left the job market' is somehow materially different than at anytime in the recent past- thus rendering this statistic particularly unreliable at this point in time...

(Of course not) But, just in case, we'll look at the numbers!

Here's Dec. 2000 (Top of the bubble)
Unemployment rate: 4%
Total employed: 135.8 million
"Marginally attached"(I love this euphemism!): 1.1 million

This is Jan 2003 (random choice of month attempting to fully reflect the post 9/11 slow down)
Unemployment rate: 5.7%
Total employed: 137.5 million
Marginally attached: 1.6 million

You might have had an argument here... after all, we had only gained almost 2 million jobs plus enticed another 1/2 million people into looking for a job after they had 'officially' given up --- less than 16 months after the most costly attack in our history...

Latest available numbers Nov 2005
Unemployment rate: 5%
Total employed: 142 million
Marginally attached:1.4 million

Personally, I really don't see where the 'unemployed/ too high of a personal opinion of their own worthofficially underemployed' ratio has drastically changed- but again, I welcome any evidence that you feel supports your "reality-based" viewpoint.

My gut tells me that the cuts to middle and low class workers helped maintain the spending levels...

Yup- meanwhile, all three of the 'richest' people in the whole country (you know, those same 3 people who got 99.9999% of all the proceeds from the 'Bush tax cuts for the rich'- just ask any Dem...) simply did the ''Scrooge McDuck thing"...

????

You know, they merely added more gold coins to the swimming pool full of money they keep in the vault- while that remaining .0001% of the tax cut money which Chimpy P. McHitlerburton used to buy each and every one of the 60 million votes of all those dumb bible-beating rednecks he actually didn't need to beat 'the War Hero' after all- because Diebold was surely going to steal the election no matter what... was left for the middle class to 'maintain their spending' was the sole reason our economy successfully weathered(pun intended) both Katrina and a full year of $50-70/bbl oil.

the "recovery" has been going on for quite a while and average hourly and weakly earning for the year are increase around 3% which is below or around the level of inflation.

How much did the 'employer-paid' share of their health care go up last year? For instance...

In 2004, say you earned 30k/yr. and your employer's cost for his share of your health care was another $6k/yr(assuming a $7500/yr family policy where the employee contributes ~20%)- Total compensation= $36k/yr.

This employee only gets a 2.5% raise...(Now earning $30,750/yr)

Unfortunately, (mostly because of all the free-riders not paying their bills which eventually gets tacked onto someone else's insurance--the rest is people who want filet mignon on a Hambuger Helper budget) the family policy is now priced at $8250/yr(a 10% increase-not unreasonable). The employer's share has now increased to $6600/yr(note that this implies an increase in the employee's share by another $150/yr- i.e. you get a 'shitty raise' and an increase in your insurance contribution)- except that your total compensation has went from $36k to $37,350- damn near a 4% raise-- which seems comfortably higher than the inflation rate in any of the last five years. (and, if you still don't like it, you can take all your skills and start your own business...).

Just look at the spending this holiday season which was weak at best from the reports I have read.

Here's more numbers that completely illustrate your cranio-rectal inversion.

The worst earnings statement I've seen is Walmart only getting a 2.2% 'same-store' gain(vs a projected 2.4% gain)- but, they haven't counted sales of "gift cards" yet- I'm thinking they'll hit their target when all is said and done...

A larger picture view(at least for Nov.) is here.

Notice that November increase?: 6.3% year over year.
How about the 3 month increase?: 6.3% year over year.

Also, note the upward revision for Sep/Oct.( Can you say "overestimating the negatives from Katrina"?)...

You're a "scientist"... do a little 'extrapolation' on those figures and tell me how 'weak' this year actually was.
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Scott,
my compuer ate my previous response. I appreciate your use of numbers to back your claim. I don't appreciate the sarcasm and insults. You could have a more polite debate and have gotten your points across equally as well. I think one of the problems with the blogosphere is the hostility by commenters and hosts that turns the other side off. I have been trying to broaden my reading and this site was ranked highly for conservative blogs, so I thought the discourse would be polite, and yes I know the liberal blogs can be just as hostile. I don't believe that you can say that the increase in wages that employees should be seeing into the added expenses of healthcare. Trust me I understand the costs of healthcare for large small and individually owed companies. I don't want to get into a healthcare debate.
I don't have the numbers, but I would actually want to compare the changes in employment vs immigration vs emmigration vs type of job (tech vs service) vs pay rate. I would be more inclined to believe that the increase in jobs pre-Katrina was mostly in hight paying jobs and that low wage earners were more unemployed than previously. Many of the higher earning jobs are being filled by immigrants from India, China etc. Post Katrina has seen increases in construction and civil engineering, but we will see who gets the construction jobs (legal vs illegal labor).

As far as holiday spending goes, I had not seen those numbers yet, but they say they are not adjusted for price changes yet and gift cards are not factored in nor are January returns. So I will wait and see how it pans out. I seem to remember last year being rather luke warm also though so the comparison doesn't show as much as a trend of actual adjusted dollars would.

Craig,

While the jobs generally do come after a good recovery begins at the top, the "recovery" has been going on for quite a while and average hourly and weakly earning for the year are increase around 3% which is below or around the level of inflation. This doesn't equal a healthy economy in my mind. Just look at the spending this holiday season which was weak at best from the reports I have read. Just my non-economics thoughts as a scientist.

Real wages are not yet climbing rapidly. They have risen only 1.1% since the end of the previous boom in 2001. Of course, wages are the price of labor, so they should rise only once the labor market tightens. That is, if unemployment is a lagging indicator (for reasons already discussed), then wages should lag even more.

In addition, real wages tend to be closely linked to labor productivity growth (how many cars a given worker can build in an hour), because more productive workers are more valuable. Productivity growth is in turn determined by technological progress (think the invention of the assembly line) and capital investment by firms (think buying a gravedigger a backhoe).

As is typical of late-stage economic booms, the late 1990s saw massive overinvestment in capital (think secretaries using supercomputers) and rapidly rising real wages. The end of that boom left firms with falling demand, over-large payrolls, and idle factories. As that slack has disappeared (through recovering demand, layoffs, and the steady depreciation of unwise capital investments), unemployment is recovering and real wages will soon follow. Remember, although the last recession ended in 1992, real wages didn't begin to rise significantly until 1996-1997.

I don't have the numbers, but I would actually want to compare the changes in employment vs immigration vs emmigration vs type of job (tech vs service) vs pay rate. I would be more inclined to believe that the increase in jobs pre-Katrina was mostly in hight paying jobs and that low wage earners were more unemployed than previously. Many of the higher earning jobs are being filled by immigrants from India, China etc. Post Katrina has seen increases in construction and civil engineering, but we will see who gets the construction jobs (legal vs illegal labor).

This is a tough issue, particularly when evaluating public policy -- it's a combination of technological change, liberalized trade, and other factors. Trying to tease out specific factors is fraught with peril.

I don't believe most high-paying U.S. jobs are being filled by immigrants or expatriates: an Indian financier living in Chicago doesn't have obvious comparative advantages compared to U.S.-born competitors, so he wouldn't be able to sell his labor more cheaply. Perhaps I'm missing your point, however. In any event, I'm not sure where one would get such data.