NationStates Jolt Archive

Not looking for a textbook definition of what makes the economy strong, I already have an economics degree. More looking for your opinions... When President Clinton was in office the stock market hit 11,000 and the unemployment rate was at 5.2%, and everyone boasted about how the economy was strong.... Now, the stock market is well over 11,000, and the unemployment rate is hovering around 4.7 to 4.8%, yet some of those same people don't seem to feel the economy is doing well. Your thoughts?? (and please don't make this a trash President's Clinton or Bush thread)...

stability.

other things too, of course, but that's paramount imho

The economy is doing well now, although it was doing somewhat better in the late 90's; however, the trend so far this year has been very promising in terms of economic growth. There have been problems with this expansion, but there were problems with the 90's expansion as well...it's not perfect by any means.

However, we also have to realize that the 2001 recession was the mildest ever since records were kept, and unemployment ventured only slightly above 6% which would have been seen as extremely healthy during the 80's.
Productivity growth has been incredible, and the job market is improving considerably. The economy now is in better shape than it was this time last year, and will probably be as good as it was in 1998 if not 1999.

Also, the stock market is not necessarily a good measure of the economy. The 1990's performance was great, but it came at considerable cost; the shady accounting, speculative excess, and outright corruption only came to light after the bubble burst. Today's market may be weaker, but it is also more transparent and better regulated than it was in the 1990's.

The case in Canada right now is that politicians from the Liberals are boasting that the unemployment rate is amazingly low, but what has also been dropping is the QUALITY of jobs. We are losing good paying full time jobs, and creating low income part time jobs... so people may be employed... in two or three jobs, just to make ends meet. It's sick how people twist "great economic news" from the decaying well being of the citizens.

Education is what makes an economy strong.

stability.

other things too, of course, but that's paramount imho

I agree, but I would say that the economy, including the S&P 500 and the Dow Jones, have been pretty stable as of late... That, and I read somewhere that since Bush first took office, there have been some 3 million job created... Job creation seems to go hand in hand with unemployment, but is a very critical part of the economy..

Education is what makes an economy strong.

Absolutely.

Whether or not people like the leader. If people really like a leader, and think they're doing a good job, the economy could be shit poor and people still wouldn't complain (which is doubtful because the leader probably wouldnt be liked anymore if the economy was that bad).

Unfortunatly, war.

The economy is doing well now, although it was doing somewhat better in the late 90's; however, the trend so far this year has been very promising in terms of economic growth. There have been problems with this expansion, but there were problems with the 90's expansion as well...it's not perfect by any means.

However, we also have to realize that the 2001 recession was the mildest ever since records were kept, and unemployment ventured only slightly above 6% which would have been seen as extremely healthy during the 80's.
Productivity growth has been incredible, and the job market is improving considerably. The economy now is in better shape than it was this time last year, and will probably be as good as it was in 1998 if not 1999.

What about poverty? Poverty lowered during Clinton's term, but it's been steadily increasing during Bush's; is there a reason for that?

What about poverty? Poverty lowered during Clinton's term, but it's been steadily increasing during Bush's; is there a reason for that?

Everyone blames the president (no matter who is in office). Sad.

Whether or not people like the leader. If people really like a leader, and think they're doing a good job, the economy could be shit poor and people still wouldn't complain (which is doubtful because the leader probably wouldnt be liked anymore if the economy was that bad).

Well, look at Bush's approval ratings on the economy; they only fell after his approval on other issues began to decline, despite the fact that the economy is in considerably better shape now than it was when he took office.

Plus, gas prices have a lot to do with it. If you recall, gas was extremely cheap during the late 90's, which boosted Clinton's approval rating on the economy...and when they began to climb in 2000, his rating on the economy began to decline.

For some enexplicable reson, people tend to think the president controls everything.....

Everyone blames the president (no matter who is in office). Sad.

Actually, I don't; I hated Clinton's economic policy, and I hate Bush's too, for very similar reasons. My question to Vetalia was not rhetorical; I am sincerely curious, it's something I have been wondering for a while.

What about poverty? Poverty lowered during Clinton's term, but it's been steadily increasing during Bush's; is there a reason for that?

Yes; Clinton had no recession during his term in office and tame inflation due to falling energy prices, reducing pressure on lower-income consumers and enabling them to maintain their standards of living and lifting them above the poverty line.

Also, the increase in the poverty rate is much smaller than it was in previous recessions, and it is not uncommon for it to take time after the recession ends for poverty to resume its decline.

Thirdly, the rate and quantity of immigration has been increasing from Mexico and other poor nations, inflating the poverty rate due to the influx.

What about poverty? Poverty lowered during Clinton's term, but it's been steadily increasing during Bush's; is there a reason for that?

So, I will sum up this question (and the answer that followed) as saying that the economic disparity between the "upper class" and "lower class" shows relative strength of an economy.

I am not sure how much direct influence the President has over this, perhaps is a question of the social safety net of the American system.

Yes; Clinton had no recession during his term in office and tame inflation due to falling energy prices, reducing pressure on lower-income consumers and enabling them to maintain their standards of living and lifting them above the poverty line.

Which plays into your other comment:

Well, look at Bush's approval ratings on the economy; they only fell after his approval on other issues began to decline, despite the fact that the economy is in considerably better shape now than it was when he took office.

Plus, gas prices have a lot to do with it. If you recall, gas was extremely cheap during the late 90's, which boosted Clinton's approval rating on the economy...and when they began to climb in 2000, his rating on the economy began to decline.

It makes me question how worthwhile the official measures really are, as far as actually measuring the welfare of the bottom 60% or so. Things like high energy prices end up hurting a lot more people than high productivity helps, even with the increases in real wages.

So, I will sum up this question (and the answer that followed) as saying that the economic disparity between the "upper class" and "lower class" shows relative strength of an economy.

Not really. It's a rough indicator of fairness, but more importantly, it can show who, exactly, supposed "economic growth" is helping.

It makes me question how worthwhile the official measures really are, as far as actually measuring the welfare of the bottom 60% or so. Things like high energy prices end up hurting a lot more people than high productivity helps, even with the increases in real wages.

Interesting point.. I would more be apt to think the polls bias towards the less productive members of society, since alot of the "upper" levels of society tend to be at work more during the day, while those with less desireable job often work late nights, thus being more available during the standard work day for phone polls... We had a discussion about polls in one of my graduate public policy classes, the teacher stated she had never been polled, nor had any of her coleagues, which is a pretty big list. THe class, comprised of about 14, all indicated that none of us had been polled, nor knew anyone who had.... Makes me question the polls...

What makes an economy strong is when you have the maximun number of people working to the best of their capabilites, with the losest possible number of people on welfare programs, while keeping the employees wages a tad above the inflation level, so they see some profit.

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It makes me question how worthwhile the official measures really are, as far as actually measuring the welfare of the bottom 60% or so. Things like high energy prices end up hurting a lot more people than high productivity helps, even with the increases in real wages.

They are helpful, but aren't necessarily a good measure of inflation by themselves. The main problem is, the Federal Reserve tends to focus too much on wage growth, with the result being that they overreact and actually make the situation worse by slowing economic growth...and that erodes purchasing power when food and energy prices increase.

Also, don't forget, the productivity increases tend to be clustered at the higher end of employment while the lower income workers tend to see far less benefit from it, which means the benefits of productivity are also muted for those workers. Any gain is good, but the effect is reduced the lower you go.

Also, don't forget, the productivity increases tend to be clustered at the higher end of employment while the lower income workers tend to see far less benefit from it, which means the benefits of productivity are also muted for those workers. Any gain is good, but the effect is reduced the lower you go.

good point, but you have to look at who creates positive economic outcomes as well. It is the productive higher income workers that create jobs, and in turn opportunity for more individuals. Many will argue that lower income workers are that way by choice, that they make genuinly bad decisions....

good point, but you have to look at who creates positive economic outcomes as well. It is the productive higher income workers that create jobs, and in turn opportunity for more individuals. Many will argue that lower income workers are that way by choice, that they make genuinly bad decisions....

There's more to it than that. The transition to a more globalized economy has left a lot of people behind, and whether or not that will in the long run be a good thing for the US economy, it is still causing quite considerable problems right now - ones that are not effectively being addressed.

good point, but you have to look at who creates positive economic outcomes as well. It is the productive higher income workers that create jobs, and in turn opportunity for more individuals. Many will argue that lower income workers are that way by choice, that they make genuinly bad decisions....

The income gap in and of itself is not a bad thing; it's only when people are unable to move upward due to institutionalized or social barriers that it becomes a problem.

That's why programs to support education and to provide help to allow workers to get to those jobs is so important, because those jobs are what drives the economy and where the growth comes from. It's better to enable people to move upward than to try and force those gains downward through government action.

Government should provide a means for people to move up through their own efforts and should provide a safety net for those who fall on hard times, but should not simply subsidy those who aren't willing to work...that's what made the welfare reform of the early 90's so successful and partially contributed to the decline in poverty.

In the global economy, it is the government's duty to ensure all citizens willing can become competitive members of that economy and to ensure those displaced by it have other opportunities through retraining and temporary insurance. Under no circumstances should a willing worker be barred from obtaining the skills they need due to lack of money or programs.

Danmarc,

Good question. In all honestly, it's simply a question of perception.

Unemployment and the stock market are good general economic indicators, but the vast majority of Americans look to the price of milk and the price of gasoline, as well as wages as their personal indicators.

In addition, a lot of what the perception is based on the mainstream media's coverage of the economy. Economic stories tend to prevail when there isn't anything else going on that would supersede them. And it doesn't take much to supersede them. When there's a war on, and security has supplanted the economy as the #1 issue in the average American's mind, those stories will knock good economic news off the front page.

With the price of gas hitting record highs every change in the season and continued trouble in Iraq and elsewhere, economic news just doesn't percolate to the top of the news cycle. Thus, the general perception is that the economy isn't doing well.

Danmarc,

Good question. In all honestly, it's simply a question of perception.

Unemployment and the stock market are good general economic indicators, but the vast majority of Americans look to the price of milk and the price of gasoline, as well as wages as their personal indicators.

In addition, a lot of what the perception is based on the mainstream media's coverage of the economy. Economic stories tend to prevail when there isn't anything else going on that would supersede them. And it doesn't take much to supersede them. When there's a war on, and security has supplanted the economy as the #1 issue in the average American's mind, those stories will knock good economic news off the front page.

With the price of gas hitting record highs every change in the season and continued trouble in Iraq and elsewhere, economic news just doesn't percolate to the top of the news cycle. Thus, the general perception is that the economy isn't doing well.


If people only knew how hard it is for the American President to affect the economy... On the other hand, Alan Greenspan (or his successor, whose name slips my mind) can just go up to the microphone, with a bad look on their face, and say something to the extent of "it's not looking so good" and watch the American economy go down the tubes...

I think that when people say the economy is good under Clinton and bad under Bush that they are just slightly muddled; I think the opinion about how the economy is doing is skewed by the national debt. Under Bush we have the highest deficits, under Clinton the national debt counter actually started counting down at one point. I think its more that people dont just think of how well corporations and employment are doing, but also whether the nation is going bankrupt, because in the end, if we can't pay off that debt the economy will fall apart.

If people only knew how hard it is for the American President to affect the economy... On the other hand, Alan Greenspan (or his successor, whose name slips my mind) can just go up to the microphone, with a bad look on their face, and say something to the extent of "it's not looking so good" and watch the American economy go down the tubes...

And the only reason that Greenspan HAD that kind of power was because he was perceived by Wall Street and the rest of main street America as being the genius economist of our age. Everyone assumed he knew everything, so when he spoke, what he said made a major impact. Ben Bernanke isn't going to have that kind of cache for a long, long time.

Like I said, it's all about perception. No one perceives Bush as knowing jack about economics, despite his Harvard MBA, so nothing he says makes a huge difference, even on the Street.

No one perceives Bush as knowing jack about economics, despite his Harvard MBA...
An MBA is just that - a Masters in Business Administration. Doesn't have jack shit to do with macroeconomics.

Not looking for a textbook definition of what makes the economy strong, I already have an economics degree. More looking for your opinions... When President Clinton was in office the stock market hit 11,000 and the unemployment rate was at 5.2%, and everyone boasted about how the economy was strong.... Now, the stock market is well over 11,000, and the unemployment rate is hovering around 4.7 to 4.8%, yet some of those same people don't seem to feel the economy is doing well. Your thoughts?? (and please don't make this a trash President's Clinton or Bush thread)...
Rigid enforcement of Christian sexual morality from the government.

A strong economy is one that experiences regular, stable growth, at the rate typical of a developed economy. It experiences the business cycle, and while people do indeed lose their jobs, they find new jobs in a reasonable amount of time. A strong economy is good at wealth creation, and in the modern world is primarily a service economy, with specialized positions making up the bulk of the employed workforce.

A strong economy is measured by the number of people within who have enough to live off of, with numbers approaching 100% living wage ability being good things, and numbers moving away from 100% being bad things.

I don't see how any other indicator is relevant.

What makes an economy strong?
I really dig economy but I quite frankly don't care what makes an economy strong so long as there is sustainable quality of living. For me the economy is not an end, but an indispensible mean.

I've often thought real median disposible income would be the best measure in terms of how rich and secure most people feel, and therefore how the economy is strong. Unemployment rate and GDP are close seconds.

But certainly you know that the Dow is a nominal figure, and the economy hardly ever stops growing even in the troughs of the business cycle. Before the crach of 29, the Dow stood at a whopping 381.22 (after the slide came to an end in 1932 it stood near 40). The war is certainly having an impact not on the economy per se, but on people's psyches.

Bottom line, there is no good answer to your question.

Free markets with low taxes and not a lot of social services make an economy strong. bottomline

So nobody agrees with my theory?

Democrats or left-leaning populists (Bill Clinton). :P


Republicans in power seem to have issues grasping this whole income/ expenses nonsense that we keep ranting about.

So nobody agrees with my theory?
Well, nobody who's not anyone important in the US government.

Democrats or left-leaning populists (Bill Clinton). :P.

Clinton was not, thank God, a populist. He was a neoliberal free trader with left-leaning social views and a good grasp of macoreconomics...

Clinton was not, thank God, a populist. He was a neoliberal free trader with left-leaning social views and a good grasp of macoreconomics...


I remember him as a bit populist. ;P


Edit: Though, he was much more than a populist; you're right.

Clinton was not, thank God, a populist. He was a neoliberal free trader with left-leaning social views and a good grasp of macoreconomics...
Clinton was not neoliberal. There were very few increases in corporate welfare under Clinton. Thank God.

Clinton a populist? Please... he was America's greatest president since Eisenhower and a supreme policy man.

Bush is a rabble rousing populist.

Rule 034: War is good for business.

Zyklon B is also great for poisoning.

Clinton was not neoliberal. There were very few increases in corporate welfare under Clinton. Thank God.

Add the "progressive" qualifier to it as well...corporate welfare should ideally have nothing to do with neoliberalism because the goal of the ideology is to make markets more open and competitive and corporate subsidies do the exact opposite. Of course, I could be wrong but I share many of the same ideological stances of neoliberalism and don't support corporate welfare.

Corporate welfare along with a free market are the centre-pieces of neoliberalism. Despite the oxymoron that is.

Clinton was a centrist. A true modern social liberal.

Corporate welfare along with a free market are the centre-pieces of neoliberalism. Despite the oxymoron that is. Clinton was a centrist. A true modern social liberal.

I 'd have to agree. Regardless of whether people agree with him or not, it's pretty easy to agree that he was a solidly competent president.

I have no quarrel in taking the liberty in saying that in my opinion he was definitely the greatest American president since Eisenhower and quite possibly the best ever.

I have no quarrel in taking the liberty in saying that in my opinion he was definitely the greatest American president since Eisenhower and quite possibly the best ever.

I'd vote for him if he could run again.

I'd vote for him if he could run again.

Let's get back to the topic, which was not whether Bush Jr or Clinton were better presidents. The question is what in your OPINION constitutes a strong economy. I think we have had some terrific answers... although I would like to hear even more..

High stockmarket and low unemployment are just two parts of the puzzle.
When you're working two jobs and can't make ends meet you perceive the economy as weak, even if your boss is deciding whether to set up his 2nd vacation house in Miami or Aspen.

What makes most people see the economy as strong or weak is simply if they have enough for necessities and a little bit more. This is why a lot of Americans see the American economy as weak.. it's chugging along, retail sales are great, yes, but it's mostly being purchased on a mountain of debt. People simply don't have enough for the necessities and a little bit more.. what they do have is easy access to credit, but they all know that somewhere down the line they have to figure out how to pay for it, and that scares them, and that's why they feel that the economy is weak -- because they're in a weak position.

As for telephone surveys, they're typically done in the evening hours, so your reasoning on the lower social classes being the ones more likely to answer is almost exactly backwards.

growth

What makes an economy strong depends on the underlying economic theory/model used to regulate the economy in any given enviroment. What would make a truly socialist economy strong is not the same thing that would work for a purely capitalist nation, etc. However, in the U.S., based on it's model for economic strenght, I'd say the following make the economy strong:
1. Lower taxes for all (i.e. individuals and businesses)
2. tax and financing incentives for small (25 or fewer employees) businesses and start ups
3. rewards in the market place and elsewhere for innovation
4. rewards in the market place and elsewhere for personal achievements
5. pure competition
6. A "safety net" for those who truly need it and the ability to weed out those who intend to "sponge" off the system.

IMHO, for whatever it is worth, in the 90's the U.S. economy was strong due to speculative investment in "internet stocks" which were the "new thing" in the investment world and offered instantaneous (so to speak) wealth. Today, it is strong because that bubble burst, people lost their shirts and short term gain and investment has turned to long term, sustainable growth that is fueled by tax cuts.