ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Friday, December 02, 2005

Meanwhile, The Economy...

keeps on trucking... For some reason, Bush does not get any credit for this continued expansion of the US economy. When a Dem is in the White House, the economy is directly attributable to the President... when a Republican is in the White House, good news is either downlplayed or it's attributed to something else.

It Keeps Going, and Going ...
December 1, 2005; Page A16

We interrupt your daily doom-and-gloom programming with a word from the real economy: It's even better than advertised. October's estimate of 3.8% third-quarter GDP growth was revised upward yesterday to 4.3%, which means the expansion was moving fast enough in late summer to blow right past Hurricane Katrina.

This represents the fastest expansion since the first quarter of 2004, as well as the 10th consecutive quarter of growth averaging close to 4% on an annual basis. So much for those predictions of recession we heard in the spring, and again in September. In fact, has there ever been a U.S. expansion this robust that has been accompanied by so much disbelief and predictions of imminent collapse? Not since the 1980s, we'd guess.

The third-quarter GDP revisions were especially notable for showing strength nearly across the board. Durable-goods orders were particularly strong, increasing at an annual rate of 10.5% and up 6% from the third quarter of 2004. Gross private investment grew at 5.8%, real equipment and software spending at nearly 12%. In other words, business investment has been a major growth driver, contrary to the conventional wisdom that consumers have been sustaining growth only by emptying their "over-extended" wallets. This bodes well for future growth, even as the housing market continues to cool.
The other big danger is policy mistakes out of Washington. With President Bush's approval at low tide, all sorts of bad ideas are on the loose -- from "windfall profits" taxes on oil companies to tariffs against China. The Republican Congress is in such disarray that it hasn't been able to extend even for two years -- to 2010 from 2008 -- the 15% tax rates on capital gains and dividends that have contributed so much to this expansion. The threat of their expiration will start to affect business and investment decisions well before the clock strikes midnight on December 31, 2008, unless Congress acts.

Those risks aside, last quarter's GDP numbers show that the U.S. economy can withstand natural disasters, rising interest rates, $70 oil, $4 gasoline -- and the relentless pessimism of elite forecasters who said today's prosperity could never happen.

Read the whole WSJ article...

Your Co-Conspirator,
ARC: St Wendeler

Comments (1)
Brian said...

Don't forget the NY Times earlier this week (emphasis added):

"By most measures, the economy appears to be doing just fine. No, scratch that, it appears to be booming.

But as always with the United States economy, it is not quite that simple."

That last sentence should have probably been rewritten as:

"But as always with a Republican in the White House, it is not quite that simple...."