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Originally Posted by jayeff
The fragility of our economy has much less to do with hard numbers, some of which - productivity and growth in particular - are actually very good, than with its vulnerability to factors we cannot control. There is globalization which has a direct effect on (real) employment levels and wages; we have heard the President admit that we can do little about rising oil prices; and it is slowly seeping into our consciousness that the growth of China as an economic force is unlikely to be good news.
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Using GDP to measure the economic health of a country is an extremely blunt instrument at best, and often misleading. There are more and imo better methods to measure improvements 'on the ground', as it were.
For instance, according to the Bureau of Labor Statistics, the average earnings increase from 2000-2004 was 3.86%, 3.22%, 3.12%, 1.71% and 2.39% respectively. Now compare those increases against inflation to get real wage growth... For those years, annual inflation was 3.4%, 2.8%, 1.6%, 2.3% and 2.7% respectively. Take away inflation from wages and overall wage growth becomes .46%, .42%, 1.52%, -.59% and-.31% respectively for 2000-2004. A meagre 1.5% increase in 5 years, and that doesn't factor in increases in energy prices, health care, insurance or any of the other things that people would generally consider essential to their lives. Most people are seeing more and more of their money go towards just staying afloat (the anecdotal 'heat or medication' conundrum)... and with 'bubbles' Greenspan cranking interest rates at every opportunity, even base inflation will start climbing to difficult rates.
Take also the jobs situation. Over the last 5 years, over 2.8 million manufacturing jobs, 2.3 million goods producing jobs and 550k high tech jobs have disappeared. Now, some of that is due to natural rebound from the dot-com bust (particularly in the high tech area), but manufacturing has been sliding downhill fast, and those have traditionally been quite good paying jobs. Those have been replaced largely with service industry (wal*mart and/or burger flipping), construction (housing bubble), government and health industry jobs. Of the three, only health pays wages anywhere even close to the levels of the lost work on average.
Code:
_Job_Type_____________________ _2001_ _2005_ _growth_
Total Non-Farm Payroll Jobs: 132015 133786 1771
Manufacturing: 17101 14276 -2825
Goods Producing jobs: 24523 22140 -2383
Information: 3708 3148 -560
Trade Transportation and Utilities: 26262 25916 -346
Wholesale Trade: 5859.5 5729.4 -130.1
Retail: 15351.6 15245 -106.6
Transportation and Warehousing: 4451.4 4366.3 -85.1
Utilities: 599.8 574.8 -25
Natural Resources and mining: 605 629 24
Professional and Business Services: 16834 16941 107
Construction: 6817 7235 418
Financial Services: 7755 8229 474
Leisure and Hospitality: 11974 12793 819
Government: 20832 21782 950
Education and Health Care: 15364 17353 1989
Bush started his term in January of 2001 with 132,454,000 million jobs. The total non-farm payroll number for July 2005 is 133,786,000. This means that the economy created 1,332,000 jobs over 4 and a half years. However, just to keep up with natural attrition (people shifting jobs) and new kids coming into the workforce, 150,000 new jobs a month must be created just to keep up. Over the same time span, the economy should have created 8,100,000 new jobs to maintain
at par, with no real economic growth. That means the Bush administration is currently 6,768,000 jobs behind what is needed just to tread water. To make matters worse, 30% of the jobs created between winter 2001 and winter 2004 are temp positions. Additionally, we know from repeated anecdotes of people working 2 or more "McJobs" in an attempt to get the equivalent of one decent paying job... which factors into those 'productivity' numbers.
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Originally Posted by Jayeff
The biggest problem any occupant of the White House faces today is how to persuade a dumbed-down public to start to think about these other issues and how to deal with them. Bush and the Republicans have a particular problem in that since their appeal is largely built on flag-waving patriotism, it is especially difficult to admit such vulnerabilities.
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Spot on, here. It's a hard sell for anyone to preach the virtues of hard work, conservation, frugal living and savings on a country which has been in a consumerist orgy for the last 2 or so generations particularly when it's growing increasingly difficult for the lower 2/3rds to even save any money for a rainy day. So many people out there's net worth now is tied entirely to the value of their property and god only knows what will become of those poor bastards who are leveraged out the ass when the land bubble pops. The party will have to come to an end eventually, and I pity anyone caught up in it when it comes.
Of course, for the top 10%, it'll be like a new gold rush... which kind of makes it difficult to GET people in the white house that want it changed.
