Wednesday, October 29, 2008

Maybe the economy is tanking in anticipation of Obama?

"The message blasted at us day after day by the Obama campaign and its public relations machine, otherwise known as mainstream media, is that we are in a recession, we have been for essentially the last eight years, and the US is unique in this because of the failed policies of George W. Bush.

We are not in recession. The economy of the last eight years has been fine. And we are doing better than our European know-it-alls who favor an Obama victory. At least that's what the most recent economic data show." Read the rest of the story, Exactly wrong again, especially the numbers.

The real story is exactly the opposite of that being told by the Obama campaign and mainstream media. The problem is lack of free markets.

  • The federal register in 2004 held 78,851 pages of regulations, or the equivalent of 30 New Deals. The equivalent of almost two New Deals was added between 1999 and 2004.
  • Sarbanes-Oxley, adding onerous new regulations on corporations designed to hopefully prevent future Enrons, was enacted in mid-2002. It didn't quite work with Fannie Mae, Freddie Mac or investment banks, did it?
  • The first increase in the minimum wage in 10 years came in 2007; a second increase came in the summer of 2008. In May of 2007 (before the increase), the unemployment rate stood at 4.5%. The latest rate (after two minimum wage increases in two years) stands at 6.1%.
  • The housing and financial crisis can be attributed directly to federal regulations and mismanagement at the Government Sponsored Entities of Fannie Mae and Freddie Mac.


Anonymous said...

Thank goodness someone else says it. We are not in a recession. There has been no negative growth (what a lovely phrase) on which one could base that assumption.
Sure everything is not rainbows and butterflies, but we are not in recession and most certainly not in a depression.

It is a time to economize, but not a time to panic.

Anonymous said...

Murray Sez:
There has been so many opinions lately about are we or are we not in a resession that I thought I would ask Mr. Webster.

Recession: A moderate and temporary decline in economic activity that occurs during a period of otherwise increasing prosperity, often in a recovery period following a depression.

All I can say is we certainly don't have a decline in economic activity! But the activity is negative. Soooo ?

Norma said...

I went to the NBER page for the "official" definition of a recession, and sure enough, it did change the definition during the Bush years of 2 consecutive quarters in the same year. When I clicked on the FAQ I think they said (paraphrase) we can call it that if we want to and you can't do a thing about it. But Robert E. Hall the head honcho says he is not going to call this a recession until after the election. The Democrats, however, have been calling the entire 8 years of Bush a disastrous recession, worse thing since the Depression (note: FDR wasn't president in 1929 as Joe Biden said, nor did FDR put any program in place that took us out of it. WWII brought us out of the Depression. Obama will direct us into one with more endless 2nd (or 3rd) New Deal programs to kill business.

R. L. said...

The federal minimum wage was increased in 1996 and 1997. Unemployment steadily dropped from 5.4% ('96) to 4.2% ('99).

Soooooo.... I wonder what the point was in linking the Federal Minimum Wage to the unemployment rate? Exactly Wrong, perhaps, got it, well, exactly wrong.

Norma said...

Maybe it was unneccesary?

R. L. said...

Different argument than they appear to be making. They are implying that raising the minimum wage causes unemployment.

Now, whether it is necessary, or desirable, would make for a good debate. Unfortunately, they decided to go the cherry picking route. Maybe they'll invite me over for pie.

Norma said...

I don't think that always happens, but I do remember that in the mid-90s during the boom years, people were questioning the minimum raise because most fast food places were already advertising $7.50/hour for entry, well above the minimum. It's a sop to guilt. And no one votes against it. In a slipping economy, raising it just cuts off the people at the bottom.