Contrary to reports, the nation’s economy is robust
November 8, 2007
What with the relentless talking down of the economy for the past several years – by a variety of pundits, politicians and, of course, the mainstream media, all of whom continue to blame President Bush for every problem on the face of the earth (remember Katrina and the recent fires in California?) – one might think that a recession in this country is imminent, if not already upon us. Barring some global geopolitical crisis, however, nothing could be further from the truth. So what are we to believe? How about facts.
For starters, professional economists describe a recession as two consecutive quarters of negative GDP (gross domestic product) growth. The last two quarters have seen GDP grow at a strong 3.8 percent and 3.9 percent, respectively. Granted, GDP measurements are lagging indicators, but if we were to assess only this key measurement, we are nowhere near a recession. The economy continues to grow nicely.
Indeed, many experts argue that given the current problems within the real estate industry, as well as the record high global energy prices (driven higher by a strong global economy), these consistently strong numbers speak volumes about the continued resiliency of this economy.
In point of fact, our economy has taken hit after hit after hit in the last six or seven years, and continues to plow ahead – all the while generating record federal, state and local tax revenues in each of the last three years. So much for the Bush tax cuts being disastrous for revenues and the economy. Predictably, the opposite has occurred, including record corporate tax receipts as a result of the strong economy, which has been helped considerably by those very tax cuts that people love to hate. I say predictably because the exact same thing happened after the tax cuts enacted during the Reagan and Kennedy administrations.
Other key economic reports point to a strong and resilient economy, including strong and sustained job growth (helped in part by high exports), very high productivity (4.9 percent in Q3 – highest in four years), low unemployment (averaging 4.5 percent in 2007, and the lowest sustained rate of unemployment in each of the last four decades), low inflation, very low interest rates, record home ownership, sustained consumer spending, wages up a strong 3.8 percent over the past year and, of course, record (or near record) global stock markets.
President Bush recently noted that the nation just experienced its 50th consecutive month of uninterrupted job growth, the longest in the nation’s history. This is even better than the media-vaunted Clinton economy of the late ’90s, which was a bubble economy if there ever was one. To be sure, the reason this economy continues to do exceptionally well year after year is because U.S. companies really have been earning record profits year after year – as opposed to the thousands of firms that never made a dime during the dot-com bubble of the late ’90s (and ultimately went out of business as quickly as they began). You can be sure that if a Democrat had sat in the White House these past seven years, there would have been no end to the praise from the media and Democrats about this incredible economy.
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Therefore, folks, despite all the gloom and doom being peddled to us by the mainstream media about this economy, the facts just don’t support the hype. Recent polls show that more than 60 percent of those polled think that this country is heading in the wrong direction, and that President Bush has received poor marks for his handling of the economy. So what is the “right direction?” If these past seven years constitute a poor economy, I’d be very interested in learning what makes for a great economy.
• Conrad Velin is the regional finance director for Sierra Nevada Media Group, which includes the Nevada Appeal. You can reach him at firstname.lastname@example.org.
Editor Barry Ginter’s column will return next week.
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