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Economy in the US

Discussion in 'Issues Around the World' started by ethics, Oct 31, 2002.

  1. ethics

    ethics Pomp-Dumpster Staff Member

    Robust consumer spending for new cars helped push U.S. economic growth ahead during the third quarter at more than twice the anemic rate of the second quarter, the Commerce Department (news - web sites) reported on Thursday, though the pace was weaker than expected.

    And we get to blame Bush for all of that good news. Oh wait... Clinton is the hero! Yeah, that's the ticket.

    Sorry for a sarcastic post. I just saw too many of the "blame Bush for the economy" recently and wanted to ask who do we blame when there's good news?
  2. tke711

    tke711 Oink Oink Staff Member

    The rise in GDP isn't because of anything dummy Bush has done. It's leftover policies from the savior Clinton's time in office. After all, he kept consumer spending at laundry mats at an all time high.

    :) [/sarcasm]

    Actually, here's a nice graph from the AP that shows GDP growth over the last couple of years.

    While the economy isn't moving at any record setting level, at least it's not negative. It's funny though that consumer spending is holding up even though all we hear in the media is how consumer convidence is lower.

    I guess we should listen to what consumers do instead of what they say huh?
  3. Steve

    Steve Is that it, then?

    "Forces of Nature"? "Acts of God"? lol!

    The U.S. economy is far too large to be very much influenced by one man's policies. Blaming anyone is not only silly, but counter-productive, as well, as it draws attention away from trying to identify the real issues and address them.

    But then, ours is a government of the mediocre...
  4. ethics

    ethics Pomp-Dumpster Staff Member

    Thanks Gregg and Stevent. I thought it was just me.

    Consumer Confidence indicators had it lowest in 9 years yesterday. Then GDP numbers come out and everyone is like, "oh."

    One is measured differently than the other, of course, but I still do not see where the Corporations are getting their pitches to dump employees.
  5. tke711

    tke711 Oink Oink Staff Member

    Because they are not seeing the profits and growth they saw in the 90's. It's the same reason for the consumer confidence numbers. Everyone got spoiled by the unattainable and unrealistic growth of the 90's and for some reason has made that the standard.

    Until corporations, and the general public, understands and accepts that 5-10% growth per annum is much more realistic and good, the consumer confidence numbers will stay low.
  6. Steve

    Steve Is that it, then?

    Excellent point, tke711. Another way to look at it is that the numbers of people being laid off wouldn't have had jobs in the first place, except for the tech bubble of the 90's. Now that thingss are returning to reality, companies are realizing they can't sustain those sorts of employment levels.

    A rude awakening for many, no doubt, but at least they had good jobs for a while, eh?
  7. ethics

    ethics Pomp-Dumpster Staff Member

    Well said. The term "unrealistic exhuberance" comes to mind.
  8. Steve

    Steve Is that it, then?

    Or even "irrational exhuberance"! :D
  9. ethics

    ethics Pomp-Dumpster Staff Member

    Bah! That's it...

    Not "unrealistic". :)
  10. Steve

    Steve Is that it, then?

    Sorry! I couldn't resist! I'm feeling impish this afternoon :)
  11. drslash

    drslash It's all about the beer

    "Irrational exhuberance" said by Mr. Greenspan.

    What was that about one man's policies not affecting the economy? Greenspan has some pull.
  12. ethics

    ethics Pomp-Dumpster Staff Member

    True. When was the last time you saw someone blame him on the forums?
  13. jfcjrus

    jfcjrus Veteran Member

    I think I understand your point about folks blaming Bush for the economy, but;
    Do you really think this is good news?
    The 'consumer' has been keeping the economy afloat.

    0% interest to buy a car - who can resist?
    Lowest mortgage rates in years, buy a house (prices at all time highs, but who gives a shit, rates are low)
    Consumer debt highest seen in decades.
    Hundreds of thousands of highly compensated, layed off folks, facing benifits ending.

    quote: "though the pace was weaker than expected"

    Might this be a clue that the 'consumer' has spent about all he can, and is about tapped out?
    Question: Without the 'consumer' able to support 2/3 of this troubled economy, what happens next?
    A troublesome question.

    I submit that Clinton, Bush, had/have nothing to do with it.

    The old saw that 'over the long term, your investments will grow' Wall Street hype is not flying with investors anymore. We've lost a shitload (If we change nothing, it'll take us years to recoup). Our quest was to 'make money'. They failed us. Investigations are just beginning to illustrate why.

    Somethings full of balony here, and we're beginning to look, very carefully, at where we put our investments/savings.

    I hope I'm wrong, but, I think 'the economy' is in for a rocky road; and it doesn't matter who's in the White House.

    Just a thought.
  14. tke711

    tke711 Oink Oink Staff Member

    Excellent point as well Stevent. It also leads me to a little (and hopefully short) story that illustrates both of our points.

    During the late 90's and early 2000, my business maintained 5-15% growth every year. Very steady, acceptable, and reasonable growth. I was very happy and had no complaints.

    During that same time, friends of mine had changed careers to get into the "big bubble" game. Every year, they had 20-50% growth and were always trying to convince me to jump ship and join them. Actually, it wasn't really convincing they were trying to do, it was more ridiculing me for not being part of the "in crowd".

    Well...here we are in 2002 with a sluggish economy for the better part of two years now. Where are my friends now? A couple of them have hung onto their jobs, but took incredibly large cuts in pay due to large drop in sales. The rest all lost their jobs and also ended up taking large pay cuts in their next career move.

    Where have I been the last couple years? Up 9% in 2000, up 10% last year and will be up approximately another 20% this year.

    My point is not to blow my own horn, but to illustrate that slow, steady, realistic growth is preferable in the long term.
  15. tke711

    tke711 Oink Oink Staff Member

    The consumer has always been the driving force behind the economy, no? Without consumers, business would have no reason to invest, produce, or employ.

    But it should. Over the long term still is relevant and correct. When everyone is talking about all the loses theyve taken, they are not talking about long term they are talking about short term since all these big, unrealistic, absurd increases happened over a very short period of time.

    The fact that investors don't believe in the long term anymore actually illustrates my point further. People (investors) got used to the absurd, unrealistic growth of the 90s and are now demanding that as the standard when that is just not possible.

    This quest to make money was what got us in trouble in the first place. Actually, I would argue that it wasnt a quest but would be more suitably called greed. I would further argue that they didnt fail us, we failed ourselves. After all, it was us, the investors, that were paying $100+ a share for yahoo.com. A company thats P&L didnt illustrate anything that would warrant a value that high. All anyone saw was a way to get "rich quick" and they didn't take the time or responsibility to actually educate themselves about what they were actually buying

    With this, I completely agree. I think that the economy will be in for a bumpy road for a little while still because of the unrealistic expectations consumers still have, and will remain bumpy until expectations come back down to earth.
  16. jfcjrus

    jfcjrus Veteran Member

    All excellent points.
    But, I suggest that even the stalwart investor, investing in solid established companys with a reasonable p/e (not the 40-200 of the tech bubble) have been hurt.
    I simply submit that 'Wall Street' advisors (also typical Mutual Fund Managers, aka 401K) have been disengenuous here, and have a bit to prove before they get to play with our investment money again.
    I don't consider 2 years of losses short term, although I know some folks do. But, even so, the losses have been remarkable. Would you disagree that it'll take years for the average 401K to recoup these losses?
    Meanwhile the managers are getting their anual fees, win or lose for the investor.
    I just think, that after the reduction of 401K value that many of us have experienced, some of us are going to be a bit more critical and demanding in how our investments are handled, in the future. Or, perhaps (as you suggest) we're going to be more aware. Which would be a good lesson, I guess.

    Thanks for your observations.
  17. tke711

    tke711 Oink Oink Staff Member

    Agree on all points jfcjrus.

    Although it was/is an incredibly hard way to learn a lesson, I think at the end of the day the average Joe will be a better and wiser investor in the future.

    At least I hope so.
  18. drslash

    drslash It's all about the beer

    How about now? I think he was reluctant to act in the summer and fall of 2000 so as not to appear to be doing anything prior to the election and be accused of trying to influence the election. After the election he acted appropriately by cutting interest rates and supporting tax cuts.

    Alas, Monday morning quarterbacking makes me sound like an economic wizzard! :)

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