Friday, December 30, 2005

1959 Year-end assessments of the economy

Those of us concerned about the poor will be delighted to read all the year end assessments of the economy. If you were Kedwards people who believed all the sour economic news floated by the DNC during the election of 2004 please know nothing helps the poor more than a good economy--although it does hurt Democrats if they aren‘t in charge because then people aren't beholden to them.

Now that we’re retired on pensions and moving to the bottom quintile again, where we were in our early 20’s, I’m very happy with the thriving economy and am puzzled that liberals who claim to care so much are so unhappy. And it is a mystery to me why the cities with the highest poverty rates keep returning local Democrats to office to run things. You can fool some of the people all of the time, I suppose.

“Remember the 2004 debate over the "jobless recovery" and "outsourcing"? Here's the reality: The great American jobs machine has averaged a net increase of nearly 200,000 new jobs a month this year. Some 4.5 million more Americans are working today than in May of 2003, before the Bush investment tax cuts. The employment expansion in financial services, software design, medical technology and many other growth industries dwarfs the smaller job losses in the domestic auto industry.

Critics of the U.S economic model charge that income gains for workers still have not caught up with the losses from the 2000-2001 high-tech collapse. Now they have. The Treasury Department reported last week that "real hourly wages are up 1.1% versus the previous business cycle peak in early 2001." Workers are now earning more per hour in real terms than they did at the height of the 1990s expansion.” Rodney Dangerfield Revisited in today’s WSJ

Kiplinger’s Personal Finance, Jan. 2006 reports a very positive picture: "As we begin the 50th month of economic growth this new year, not too much has changed. You can expect 3% growth in 2006 to follow the 3.6% of 2005 -- an excellent showing considering the massive hurricanes, record oil prices and relentless Federal Reserve Board interest-rate hikes. . . The U.S. will create two million new jobs in 2006, on top of 1.8 million in 2005, enough to hold the unemployment rate to 5%. With jobs plentiful, employers will add nearly 4% to paychecks. . . Corporate America's balance sheets and profit margins are the strongest they've been since the 1960s, with only a few industries, such as airlines and U.S. automakers, in trouble."

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