Americans wrong about income distributionFollow

Am I the only one here who could care less about wealth inequality?

peer pressure

South Africa here we come!


GINI index:
United States 40.8
China (PRC) 46.9
Mexico 46.1
Iran 43.0
Saudi Arabia 32.0*

and they have freaking sweat shops
(*estimate)

Edited, Oct 3rd 2010 12:49pm by shintasama

Oh do tell, what are the 'right' things to be obsessed with?

Standard of living is based on the age, condition and blue book value of gbaji's current car?

The first step to recovery is admitting you have a problem. ;)




Yeah. And I did kinda touch on that above. In theory it would be a good idea to throttle growth when it's growing, specifically to avoid economic bubbles. However, this is nearly impossible to do in practice. That's because the people across pretty much the whole political spectrum want it to continue. The free market guys wont do it because there are record profits going on. The big government guys wont do it because record profits means record tax revenues. And the folks in the middle wont do it because the general sense during those time periods of that the economy is doing well, times are good, people are employed, everyone is happy, and no one wants to hear that so much good is really bad for you. It's like trying to convince people at a birthday party not to eat any cake.


Think about how much is spoken about how wonderful the economy was during the last few years of Clinton's term as president. But that was because we were in one of those economic bubbles. And everyone knew it. I was reading trade magazine articles in 1997 talking about how the dot.com thing was a bubble and it was going to inevitably crash and how a smart investor would realize this and be cautious. But no one listened because the short term gains were so great, and the tax revenues were so great, that no one wanted to be the guy in the room telling everyone to slow down. Would you seriously *not* get in on that kind of action? Would you propose slowing it down and hurting tax revenue? The left still crows about how Clinton ran a surplus, yet that surplus existed precisely because we had this huge economic bubble generating a ton of on-paper profits that were going to disappear just a couple years later.


Similar thing with the housing bubble. Everyone saw the sub-prime loan percentage increasing, but there was very little political will to try to stop it. And those few who did were (predictably) attacked viciously in the public eye for it. No one wants to hear the guy telling them they shouldn't eat the birthday cake, right?


My point here is that after a crash there's a tendency to overreact and try to "prevent this from happening again". But that's closing the barn door after the horses are out. It's the worst time to do that sort of economic throttling because it'll prevent or slow down the normal market recovery process from a crash. Contrast the dot.com bubble crash to the sub-prime loan crash. In the former, Bush's did two things. He lowered taxes and gave out some minor stimulus checks (immediate cash into the system, not longer term programs). Within a year and a half, the economy had completely recovered from the double crashes of dot.com and 9/11. With the sub-prime loan crash, the Democrats did the opposite. They bailed out financial institutions in the most inefficient way possible, while ensuring the greatest amount of stings were attached. They increased government spending dramatically, by creating a stimulus bill that didn't help people much in the short term, but put us more on the hook for future deficits. They added yet more spending in the form of health care. And they want to let the tax cuts Bush put in place expire, place cap and trade on our industries, and a laundry list of other anti-growth measures. Is anyone surprised that GDP growth has been anemic (it should be roaring right now), and joblessness is still high?

Oh, the point to the above since you're guaranteed to miss it, is that Bush didn't build any sustainable recovery through wise and sound economic policy, he pretty much just rode an economy anomaly (regardless of its root causes) on its way up the the slope. When it came time for it to crash, there was no sound, solid economy built up by Bush to cushion its fall. We didn't lose half the gains or a third of the gains -- it just returned us back to where we were after the previous crashes. Bush's entire "economic growth" was ephemeral.

Also, since this was hilarious...

"The Democrats"? Bush majestically saved the economy after 9/11 but "the Democrats" decided to bail out the financial institutions?

Is this revisionist history where Bush wasn't the president who signed TARP and didn't champion it (along with McCain)? Did you forget about this or were you being intentionally disingenuous? Funny how the thing you (incorrectly) thought was a success you lionize Bush for but the thing you (again incorrectly) think was a failure, you try to pin to the Democrats and completely ignore Bush's role in it.

Edited, Oct 4th 2010 5:17pm by Jophiel

Sure. It's also the correct way. When the financial markets went bust following the housing collapse, was anyone saying "Thank god for this manufacturing sector Bush built up"? Were they saying "Wow, thank heavens this service sector is strong"? No, when then financial sector collapsed, it ALL went away. All the gains made after the Dot Com and 9/11 hits were gone. Because Bush never actually built anything in the economy, he was just there when a bubble happened.

No, because as I had pointed out once before, the losses of the Dot Com bust didn't wipe out all the gains made during the Clinton years. Even after those losses, the economy was still ahead of where it was when Clinton took office. Clinton's economic growth wasn't purely in a single bubble sector. You can't say that about Bush. The housing bubble growth was all Bush had.

Even more childish to just not mention Bush when whining about TARP because you were too busy trying to fluff his legacy by attributing a false economic recovery to him. That said, TARP was very successful and I have no problem giving Bush part of the credit for it. One of the few wise economic moves the man made.

Edited, Oct 4th 2010 8:16pm by Jophiel

No, it's derived from the numbers. Your insistence on ignoring the numbers is derived from the fact that you shot your mouth off, said something stupid and now have to start spinning to avoid admitting it.

In one case, a large amount was wiped. In the other case, it was all wiped out because there was no economic growth beyond that caused by the bubble.

Under Clinton, the DJIA went from 3,300 to a height of 11,500. Following the Dot Com crash and 9/11, it was at 8,200. It retained 4,900 points or 60% of its gains from the time Clinton took office to after 9/11. That's actual growth beyond a simple tech bubble. Under Bush, the DJIA started at 10,500, dropped to 8,200 after 9/11, was down to 7,800 a year later, rose up to 14,000 on the housing bubble and crashed down to 8,000 by the time Bush left office. Bush left the White House with a DJIA deficit of 1,500 points and at the same place it was following 9/11. That's not growth. That's not recovery. That's a single sector bubble accounting for 100% of the gains Bush saw.

Same for unemployment. Clinton took the unemployment rate from nearly 8% and brought it to under 4%. After the tech bubble burst, it went to 5%, climbing to 6% in the 18 months following 9/11. Regardless, it showed much more resilience than under Bush where he left office with essentially the same unemployment figures Clinton saw at its height. Again, that's no "growth" on Bush's part. There was nothing actually "built" there to support the economy. There was no resilience in unemployment. It was just one ride on the bubble.

Technically, Clinton's numbers are even better because the Dot Com crash was followed by 9/11 not long after. There's no way to separate the effects of the two events but unless we assume that 9/11 did no damage to the economy, it's safe to say that the Dot Com crash alone would have left Clinton with even better figures when it comes to showing that it wasn't all tech bubble with him. Likewise, Clinton's economy showed growth even prior to 1995-1996 when the tech bubble actually started to grow which helps explain why it was sustainable.

All of your idiotic spinning aside, it is absolutely ludicrous to say that Bush had the economy "recovered" 18 months after 9/11. It wasn't even close to recovered. It only "recovered" because of an artificial bubble in the housing market that drove everything up with it and caused it to all come crashing down when the bubble burst. No matter how much you want to turn this into something about Clinton to avoid admitting it, the plain and simple truth is that Bush didn't do shit for the economy and it was all painfully made clear when the party ended and we were right back to where we started after the Dot Com & 9/11 crashes due to a single incident -- the housing bubble burst.

If that's your standard for economic leadership, go for it. It's stupid and unsupported but you seem really invested in it so have fun with it.

Edited, Oct 5th 2010 9:10am by Jophiel