Suitably Flip

America's Secret Prosperity

I'm not in front of a TV right now - somebody tell me, is every news channel a-twitter with today's Labor Department report that initial jobless claims dropped by another 20,000 last week?

What do you mean 'no'?

Maybe they're too busy celebrating the fact that unemployment remains at its 4 1/2 year low of 4.7%?

'No' again, huh?

I guess they must be sticking with the big picture - the fact that 2 million jobs have been added in the last 12 months and that there are more American homeowners than at any time in history.

Is your TV even plugged in?

With 9.8% cumulative GDP growth over the last 2.5 years, and annual private investment growth of 8.5% over the same period, it seems hard not to attribute this surge in prosperity to 2003's pro-investment, pro-growth tax cuts.

Furthermore, states that saw increases in new jobless claims (like Michigan, which saw a rise of 8,000) were largely affected by layoffs in the automobile industry, whose troubles we can pin not on fiscal or monetary policy, but on oil prices and the crippling effect of legacy labor and healthcare costs wrought by entrenched union labor.  Excluding this effect, the report is even sunshinier.

The only potential downside to all this gitup'n'go in the labor market is the degree to which it may fuel inflation (if unemployment holds below the theoretical "natural rate", it can cause the economy to run too hot, ergo inflation).  In the Fed minutes released earlier this week, we did hear that inflation - while not currently worrisome - is toward the higher end of what the Fed would tolerate (though excluding food and energy, it was a tame 2.1% over the last 12 months).  Still, if inflation does notch upward, the worry is that we'll see further extension of the current streak of interest rate hikes, which could put the brakes on corporate spending and, in turn, output growth.

For now though, this economy is so good...

How good is it:
And Tax Cuts Said, "Let There Be Growth."
Pay Attention, America!
2006 Economic Report of the President
Speaking of Taxes
Reason #411 Why Congress Must Make the Tax Cuts Permanent
Liveblogging the State of the Union
Oh Tax Cuts, Is There Anything You Can't Do?
Tax Cuts To the Rescue
Yet More Good Economic News
The Facts Are Not Enough
I Believe I Can Buy

In On the Secret:
Blogs for Bush

Tracked at:
Stop the ACLU

Comments

America's Secret Prosperity

I'm not in front of a TV right now - somebody tell me, is every news channel a-twitter with today's Labor Department report that initial jobless claims dropped by another 20,000 last week?

What do you mean 'no'?

Maybe they're too busy celebrating the fact that unemployment remains at its 4 1/2 year low of 4.7%?

'No' again, huh?

I guess they must be sticking with the big picture - the fact that 2 million jobs have been added in the last 12 months and that there are more American homeowners than at any time in history.

Is your TV even plugged in?

With 9.8% cumulative GDP growth over the last 2.5 years, and annual private investment growth of 8.5% over the same period, it seems hard not to attribute this surge in prosperity to 2003's pro-investment, pro-growth tax cuts.

Furthermore, states that saw increases in new jobless claims (like Michigan, which saw a rise of 8,000) were largely affected by layoffs in the automobile industry, whose troubles we can pin not on fiscal or monetary policy, but on oil prices and the crippling effect of legacy labor and healthcare costs wrought by entrenched union labor.  Excluding this effect, the report is even sunshinier.

The only potential downside to all this gitup'n'go in the labor market is the degree to which it may fuel inflation (if unemployment holds below the theoretical "natural rate", it can cause the economy to run too hot, ergo inflation).  In the Fed minutes released earlier this week, we did hear that inflation - while not currently worrisome - is toward the higher end of what the Fed would tolerate (though excluding food and energy, it was a tame 2.1% over the last 12 months).  Still, if inflation does notch upward, the worry is that we'll see further extension of the current streak of interest rate hikes, which could put the brakes on corporate spending and, in turn, output growth.

For now though, this economy is so good...

How good is it:
And Tax Cuts Said, "Let There Be Growth."
Pay Attention, America!
2006 Economic Report of the President
Speaking of Taxes
Reason #411 Why Congress Must Make the Tax Cuts Permanent
Liveblogging the State of the Union
Oh Tax Cuts, Is There Anything You Can't Do?
Tax Cuts To the Rescue
Yet More Good Economic News
The Facts Are Not Enough
I Believe I Can Buy

In On the Secret:
Blogs for Bush

Tracked at:
Stop the ACLU