White House Rolls Out Its Economic Message

IJ Reilly

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"Home, home on the range..."

Handpicked collection of experts and business leaders are on same page in forum's opening day.

WASHINGTON — It was part economic talk show, part political tent revival.

The White House pulled out all the stops Wednesday as it convened a two-day conference to drum up support for restructuring Social Security, overhauling the tax code, curbing "lawsuit abuse" and enacting President Bush's other second-term priorities.

Vice President Dick Cheney welcomed the participants and then sat almost wordlessly through a panel discussion on "The State of Our Economy."

President Bush participated in an hourlong session called "The High Costs of Lawsuit Abuse."

Treasury Secretary John W. Snow dangled the prospect of more tax cuts, and Health and Human Services Secretary Tommy G. Thompson bemoaned the high cost of medical care.

One after another, a hand-picked collection of economists, experts and business executives served up an unrelenting — and unstinting — series of testimonials to the wisdom of the president's economic priorities. To a person, they urged the administration to do more of the same.

"Thank God the election is over," said Mary Farrell, managing director of UBS Wealth Management of New York. "I have never seen so much economic misinformation and illiteracy out there in the marketplace. We have a wonderful economy."

One thing the opening day was not was a frank exchange of ideas.

There was no hint of disapproval of Bush's across-the-board tax reductions, which the president and many economists credited with stirring a recovery but which had also contributed to widening budget deficits. There was no criticism of Bush's goal of allowing workers to divert some of their Social Security taxes into private accounts, which some analysts worried could weaken the public retirement program.

...

Economists on the panels Wednesday declared the U.S. economy to be in fine shape, even though job creation had not caught up with population growth three years after the 2001 recession.

"The weakness that we worried about in the economy several years ago is now almost all gone," said Harvard University economist Martin Feldstein, the White House's leadoff speaker. "We really are seeing very strong economic performance."

When administration officials asked conference participants for ideas and suggestions, they recited White House proposals: more tax cuts, limits on lawsuits, fewer federal regulations.

...

In a panel on healthcare, participants promoted health savings accounts, a Bush initiative that would encourage individuals to purchase high-deductible catastrophic health insurance plans. While proponents say the plan could help more people buy insurance, some critics worry it could prompt employers to scale back on the health benefits they offer to workers.

The conference will continue today. Panel discussions include "Financial Challenges for Today and Tomorrow" and "Preparing for the Jobs of the 21st
http://www.latimes.com/news/nationworld/nation/la-na-summit16dec16,1,160115.story
 

mactastic

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We don't need to cap lawsuits, we just need to reduce the frivolous ones. An arbitrary cap distorts the free market, no?

How about if the suggestion were to put a cap on energy costs instead? Would that fly as far?

Or how about a cap on the amount of CEO pay that a corporation can deduct from it's tax return?

Are caps themselves OK, or are they only OK when they benefit you and your contributors?

The SS thing is just a boondoggle waiting to happen. Somehow I imagine all the brokerage houses are lining up in favor of this, which probably means the little guy is gonna get screwed.

And 'fewer federal regulations' is code for helping business out while we regulate the hell out of people's daily life. No thanks.
 

mactastic

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Yeah the threat of a veto would be nice to reign in Congress a little. Drunken sailors doesn't even begin to describe how they've been spending.
 

IJ Reilly

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Hey, what are you guys griping about? Didn't George just get a ringing endorsement for his policies and plans from a bunch of economists and businessmen? And you're still saying it's not all good?
 

mactastic

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IJ Reilly said:
Hey, what are you guys griping about? Didn't George just get a ringing endorsement for his policies and plans from a bunch of economists and businessmen? And you're still saying it's not all good?
Not all scientists agree, so it's still debateable.
 

IJ Reilly

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Shaw it is, but the exact quote is: "If all economists were laid end to end, they would not reach a conclusion."

Of course George Bernard Bush is attempting to alter that calculation. If you consult only the economists who already agree with you, laid end to end, they are bound to reach your conclusion.
 

Desertrat

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If you have blinders on, not looking at the big picture of other countries' economic status and the intertwining with the US, I guess these folks are factually correct. Trouble is, IMO, they're looking at just a few slices of the pie and not at the whole thing.

I don't understand how a consumer-based economy, purchasing foreign goods to the tune of a $600 billion/year deficit, is a Good Thing. Mostly, we're exporting our money.

I'm in the midst of an article from Strategic Investment which is giving an analysis of the housing bubble and the involvements of Freddie Mac and Fannie Mae--and the possible illegalities in their books. There is talk there of "subprime" borrowers, who couldn't normally get financing but for artificially low interest rates, adjustable rate financing, interest-only monthly payments and zero down payments. This group's purchases have grown by a factor of six in the last several years, accounting for some $365 billion in obligations. A study group sez the San Francisco Bay area is one which is at risk for a pin to prick the bubble, among several others...

With interest rates going up, the deficit must also rise. Sure, this increase in interest rates might slow the drop in the dollar's comparative value against other currencies, but it doesn't help exports to have a "strong dollar". Conversely, a weak dollar doesn't (historically) end trade deficits.

I'm among those who think the CPI is a bunch of hooey; while I've read of analyses which say it's understated by at least one percent, I'm not that much of an optimist...

Hey, folks, interesting times, right?

'Rat
 

Xtremehkr

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A forum packed with people who have been carefully vetted and are going to say exactly what the White house wants them to say. I would call this an extended sales pitch in the form of a forum.

As usual members of the right will continue to defend what the Whitehouse does no matter what. And the Whitehouse will continue to serve it's own interest while promising the world to everyone else.

The questions is, what happens if they don't deliver? it doesn't matter does it, cause they will be long gone and living well.

The Republican Party panders to peoples greed lately and it has been working wonders.
 

Desertrat

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Xtremehkr, my belief is that they can't deliver. Kerry couldn't have delivered had he won. It ain't a partisan thing, period. Governments can meddle around and make bad situations worse, or good situations somewhat better, but they can't cure real, sure-enough problems.

If government could really do great and wondrous things for the economy, would not the buying power of the dollar be at parity with 1916, rather than at 5%?

In any kind of turbulent times, some folks are gonna make out okay; others are in trouble. Right now, those with debt are probably the most likely to be in trouble. I've been pretty much expecting some variant of today's troubles for the over-twenty years that I've been watching and wondering at the general decline in real terms of buying power.

For those who might try to make some money during these times, penny stocks are worth looking into. I grant that Warren Buffet most likely has folks doing the hard research on the penny-ante companies whose stock sells for pennies...

Some folks silver is still way underpriced; if correct, junk US silver coins are worth picking up. The historic relationship of silver with gold is around 16:1. Right now, it's about 60:1, roughly. Ergo, undervalued.

(In actuality, gold ain't goin' up; the dollar's goin' down wrt gold.)

Puts on overly-exposed banks like JPMorgan/Chase are worthwhile; it's exposed to some $40 trillion in derivatives, and stands to be in trouble as interest rates rise. (Probably why the slow rise in rates by Greenspan, et al.) But, January 2006 $35 JPMorgan Chase puts (YURMG) for between 85 cents and $1.10 per contract is one recommended buy. For those interested, buying a subscription to Strategic Investment would be worthwhile. They've been good for my billfold, since almost 20 years back. Agora publishing...

Mainly, get out of debt and minimize the overhead--and forget about what the White House sez. Hey, there's been a weak-money policy since before 2000 under Clinton and continuing under Dubya; how can they now turn around and yowl about strong dollars?

'Rat
 

Xtremehkr

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I disagree, Clinton did well. Bush cuts taxes while at war. Bush has not seen a spending bill he does not like, or can veto. With the current deficits Bush plans for more tax cuts.

That's a poor defense for the policies being undertaken by this administration.
 

Desertrat

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Xtremehkr, it has zilch to do with anybody's opinion of Clinton's "doing well". The dot-com bubble was enabled and abetted by the lowering of interest rates.

Now, it's all well and good to lower interest rates to recover from a recession, but when it's done in the absence of a recession, a tool is removed from availability for when it's needed--as at the end of that bubble in 2000. Remember the $8 trillion in stock market losses? The seeds were sown earlier; the recession started in 2000 although the actual effects weren't felt until 2001. Bush couldn't get Greenspan to lower rates; that had already been done.

And that very lowering of rates enabled the present real estate bubble. It's not inflationary that houses in California (and elsewhere) are increasing in sales price by double-digit numbers, annually? Duh?

Much of the present economic activity stems from money made available by the refinancing activities. Refi at lower rates on an inflated house. Hokay, same-sized payments, cash in pocket. Go buy new SUV, new bass boat, or second home. Much of this refi has been VRMs or interest-only monthly payments.

When interest rates go up, shame on your happy butt. Remember, if the appraised value of your collateral is less than the remaining value of the mortgage, you either make up the cash difference or get repoed. Once repoing starts, all appraisals begin to drop.

And folks still gotta pay for that bass boat or other time-payment toy.

Thus raising interest rates to keep the dollar strong and fight the inflation that's already occurring has the side effect of clobbering folks who should have remained renters--or not been hedonistic with the refi money.

Bare bones on the subject...

:), 'Rat
 

IJ Reilly

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The recession did not start in 2000, it started in the spring of 2001 and ended in the fall of 2001. But don't take my word for it. You could look it up.
 

Xtremehkr

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The housing bubble is much bigger than the .com bubble ever was. The .com bubble excuse doesn't really cut it anymore, especially when considering all of the other economic blunders GWB has made.

Haven't you noticed that people are still losing jobs?

"Thank God the election is over," said Mary Farrell, managing director of UBS Wealth Management of New York. "I have never seen so much economic misinformation and illiteracy out there in the marketplace. We have a wonderful economy."
Keep the faith! keep the faith! Wonderful for whom?
 

IJ Reilly

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One of the participants in the "economic conference" appearing on the NewsHour the other night had the audacity to argue that the debate over whether the president's tax policies were right or wrong for the country was at an end because the election was over. I guess he thought he was on FOX. Either that, or this line is part of the current GOP talking points package. Probably the latter -- since I'm hearing it so often now.
 

solvs

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Jun 25, 2002
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It's simply typical neo-con, Bush administration rhetoric. Say it over and over again, even if it's a flat out lie, it becomes the truth. Usually they take a tiny piece of the truth, and ignore the rest, and then criticize anyone who points out the inaccuracies and cry liberal media, patriotism, etc. I can't believe it's working so well and so many fall for it. Worse, even the ones who don't, don't really speak up.

Kerry might not have been able to completely turn things around, but it would have been a step in the right direction. He at least saw the problem. What Bush is doing has not been working so far, any other sane person would re-think things (provided he thought about them in the first place). You can blame Clinton, or dotcoms, or 9/11, or anything else... it doesn't change the fact that Bush is doing just as bad a job economically as he is everything else. Whatever happened to the buck stopping here?

I always thought the liberals were the whiners that blamed everyone else. :p (just to be fair, both sides bug me)
 

Desertrat

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IJ, there's the legal definition of a "recession" and reality. Legal, IIRC, is three consecutive quarters of negative growth, or some such thing.

The NASDAQ started falling out of bed around April of 2000 after its peak around 5,000, and the ensuing eight trillion bucks' worth of losses resulted in a vast decline in spending. In a consumer economy, reduced buying of "stuff" is a killer.

I don't think it's a defense of Bush, particularly, to recall that in a campaign speech in (I believe it was) Virginia in around April of 2000, Bush voiced concern over an oncoming possible recession. I imagine his handlers jumped all over him, because it wasn't mentioned again. Given the importance of the Consumer Confidence Index (ain't that a sign of something?) and consumer confidence, I'd bet the notion was, "If you talk about it, it will happen."

And, even without talking about it, it happened...

Booms and recessions take years to develop. Staving off a serious recession as Greenspan did by lowering interest rates was simultaneously helped by the dotcom boom being almost immediately followed by the housing boom.

What worries me is that at some point whatever next recession occurs will be worse that what should have already come and gone.

A lot of folks aren't worried, of course. Good for them; I wish them continued happiness. I saw an article today about a lottery for the privilege of buying a house in a new SF Bay-area development. Roughly, $300 per sq-ft. Some lottery-winner woman said she and her three kids would be happy when her new 3,700 sq-ft house was done. Lordy, I hope so! But, how in the world do folks pay for that sort of house? The interviewers never seem to ask that sort of question...

Ah, well.

'Rat
 

IJ Reilly

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Desertrat said:
IJ, there's the legal definition of a "recession" and reality. Legal, IIRC, is three consecutive quarters of negative growth, or some such thing.
Not legal, just commonly accepted. And it's two quarters of negative GDP growth, so the last one just met the minimum definition. By any reckoning it was mild and brief. I'm certainly aware of the drop in the stock markets and when they occurred, but market declines don't cause recessions. Even the Great Depression wasn't caused by the market's collapse alone -- it was a result of what happened afterwards.

Predicting a future recession is like flipping a coin repeatedly and forecasting that it will eventually turn up heads. Nobody should get too much credit for that. To be honest, I was sure back in '96 that whomever won the election was going to face a recession, since we hadn't seen one since '91. I guess my coin flip forecasting is none too good.
 

Xtremehkr

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So what would the GDP have looked like with the war pumping billions of borrowed money into the economy?

Anybody can run an economy on credit.
 

Desertrat

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Annually: The GDP is somewhere in the neighborhood of ten-thousand billion dollars. The war is costing--depending on how it's calculated--some one-hundred fify billion dollars. 1.5% of GDP.

Costs of the war include labor and materials for equipment, as well as military salaries (which would be paid to active-duty people anyway) and fuel. Other stuff of course; SFAIK the assistance and reconstruction costs are included in the "Cost of the Iraq war".

My $150 billion is just a guess. I've no idea how long the $90 billion of Kerry's "I voted for it before I voted against it" actually lasted; maybe it's all spent, maybe not.

I wonder what was the annual cost of enforcement efforts for the "No Fly Zone"? It was large, in part due to the naval presence...

You get right down to the nitty-gritty, we've spent a ton of money in the middle east since back in the 1970s with little of positive value to show for it...Or, farther back, to the 1950s?

'Rat
 

Chip NoVaMac

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mactastic said:
We don't need to cap lawsuits, we just need to reduce the frivolous ones. An arbitrary cap distorts the free market, no?
I agree, so many cases of courts run amok on the issue. Some of the cases that I found outrageous were 1) Toyota paying millions to a guy that lost his legs in a car accident here, because they did not warn him that seatbelts are useless with the seatback in a full recline 2) A gentleman, until recently made a living off suing companies for ADA violations (a judge recently barred him from filing further suits - he had filed over 400 in the last 10 years I believe).

A cap will just give companies the ability to weigh bad choices against the cap of a lawsuit.

mactastic said:
How about if the suggestion were to put a cap on energy costs instead? Would that fly as far?

Or how about a cap on the amount of CEO pay that a corporation can deduct from it's tax return?

Are caps themselves OK, or are they only OK when they benefit you and your contributors?
I have a problem with the "basics of life" being controlled by the whims and desires of the stock market. The fat cats get the profits on the backs of those that can least afford it. I am not saying that raising costs of supplies should not mean a rise in the cost of goods. But there should be limits on the profits earned on "basics of life".

One solution I see is creating a "municipal stock" that would be tax free for "basics of life" companies.
 

Thomas Veil

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Feb 14, 2004
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I just read IJ's original post, and it just leaves me terribly depressed. The inmates have finally taken over the asylum. People who live in bizarro alternate realities are running the show.

I know someone'll say that it's been heading that way for a long time, but we're reaching new lows here. As long as we're into big-time reality denial, why don't we start passing laws controlling the weather, or making death illegal or something.

F***ing idiots.