Chad at CCK and I exchanged a couple of strategic posts over the state of the economy. In a recent post he has this comment:
As I've stated on this weblog before, the President and conservatives like to trot out big macroeconomic numbers like GDP growth and job growth to the cameras as an illustration as to why people should be happy with the economic state of the country. The problem, of course, is that the economy may be growing ever so slightly since early 2002, but the growth hasn't benefited average Americans. Median wages are actually down in this country. Health care costs -- insurance premiums, prescription drugs, and bills -- have eaten into our earnings. GOP economic policy focuses on cutting taxes for high earners, and those dollars aren't "trickling down".
Chad doesn't seem to like being confused with big facts about GDP growth and job growth. But I can't help thinking that job growth does in fact benefit average Americans, most of whom need jobs. So forgive me for pointing out that the economy has been creating about 200,000 jobs a month this year. Maybe there are more rich job seekers out there than I imagine, but I still think that a lot of those 200,000 workers are in fact pretty average. I would also point out that far more Americans are working than ever before. Under President Clinton's last year, 2000, 137 million Americans had jobs. The number declined for the next two years (after all, Bush is the enemy of the American worker) but then mysterious rose to 138 million in 2003. It stands at 142 million now. I suspect that those 5 million new job holders include a lot of average Americans. Now one might point out that the population is growing. I do not know that these figures are adjusted for that. But if not, isn't that the most important function of an economy: to provide new jobs for whatever population it will have?
As for hourly wages, Chad seems to be referring to the Economic Policy Institute (Research and Ideas for Working People!) numbers. They make a lot of the fact that in 2003 inflation outpaced wage growth, resulting in a net loss in real hourly wages. It would nasty of me to point out that the same thing happened in 1996, during an economic recovery! I believe a Democrat was in the White House back then. So I won't point that out. I will note that real hourly wages have grown since then. The Secretary of the Treasury sums it up:
So real hourly wages (apparently this isn't one of those "big macroeconomic numbers" that Chad dislikes) are in fact rising, and are higher than in the 1990's (under that Democratic President). We note that real personal expenditures have also been growing, as the recent Christmas season confirms. Ok, so this is an economic disaster. But surely it could have been worse.
Chad graciously acknowledges that the economy is growing "ever so slightly." Well, 4.5% this year is hardly slight growth. Its better, for example, than more enlightened Europe. Over the years of the Bush administration, GDP growth averages 3%. It was 2.7% in Canada, 2.4 in Great Britain. France managed 1.4%. I have blogged on some of the consequences of this for the average French worker. Germany and Italy achieve an anemic .5%. So it could be worse.
Chad does not want to hear that the economy is doing well. He doesn't want to hear it because it would reflect well on George Bush. I do want to hear it, for the same reason. I think that makes Chad and I pretty average. I would like to give Bush all the credit for this economy, but that would not be sound thinking. Presidents can do relatively little about the economies they inherit. Their policies will have their real effect long after the policy maker leaves office. I think Clinton gets a lot for the current economic boom, as Reagan did for the 1990's economic expansion. But if we want to think clearly about this, we have to recognize the reality before us. Just right now, the economy is doing very well.
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