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Mar. 9, 2007 The Labor Department released the news today that the unemployment rate dropped to 4.5% in February even as average hourly wages increased to $17.16, a 4.1% increase over the previous year. It should be noted that any unemployment rate much below 5% is considered "full" employment from an economic perspective. At the same time the Federal Reserve reported that the net worth of U.S. households reached a record high in the final quarter of 2006. Net worth is defined as the difference between total household assets less total liabilities. This amounted to a 2.5% increase over the previous quarter. This really continues an overall good economic news picture which has now existed for years, exemplified by sold economic growth, low unemployment and interest rates and increasing wealth of the population. Even the trade deficit has narrowed, with U.S. exports reaching an all-time high. It is said that the president of the country has really very little influence on the overall economic health of the nation, and this is certainly a valid perspective. The economy is influenced heavily by factors which are beyond the control of even the most powerful office in the world. Still, presidential policies are a factor in that total economic picture; they do have some impact. In addition, the president is the one who takes the blame or credit for the economy. Critics cannot have it both ways. It is not intellectually honest to blame President Bush when the economy did not create jobs at a quick enough pace, which the Democrats and the media clearly attempted to do during the 2002 and 2004 elections while offering no credit for a healthy economic picture. We were told the tax cuts did not work and the economy was struggling with little hope early in Bush's term. Once the economy began to boom, little credit was given to the Administration's tax policy. Given this, it is not clear which perspective many members of the media hold. Does the president influence, even control, the economy or does he not? At a minimum, we are entitled to a consistently presented philosophy in this department. Rest assured, though, if things turn south on the economy any time during the next two or three years, even when Bush is long out of office, many critics and members of the media will attempt to tag it on the current president; bank on it. To the critics of the Administration, the only statistics which matter are those which present a negative picture or some kind of incompetence on the part of our leader. If the stock market burps, which invariably has occurred in every growth period since these things have been tracked, it is not merely a correction, but rather it is the fault of the shaky Bush-created economic structure. The fact that the market has had unfettered growth for the past four years appears to be a non issue to the malcontents. Even good news will be parsed by critics into a bad story. So the total net worth of the nation reached an all-time high in 2006? It is a virtual guarantee that this will be portrayed as being the result of "the rich getting richer" and "the poor getting poorer" and this will also be said to be due to some maneuvering by the president. This assumes the good news is even widely reported at all; it seldom is in recent years. Left wing types have also been telling us that the low unemployment rate is a facade, because the economy has replaced high paying manufacturing jobs with lower paying alternatives in the service industries. While there is a good degree of truth in this, there is a trend away from manufacturing in this country which has been ongoing for decades, the average wage rate increase appears to belie the idea that the country is gaining only low-paying jobs. The employment picture is certainly changing in this country. Education or advanced training of some sort is becoming a necessity. It is rapidly becoming unrealistic to believe someone can raise and support a family and live an upper middle class lifestyle with nothing more than a high school education, simply by going to work for Ford, GM or some big automotive supplier. It is folly to blame this on the president or any other individual for that matter. Those who state that President Bush could have changed or even slowed the international competitive circumstances which are shrinking the manufacturing base of this nation are pure partisans or economic neophytes. This is equivalent to saying Bush could have diverted Katrina before it hit New Orleans. Bush's predecessor in office did nothing to stop this trend either; however, the euphoria of the dot-com boom masked the underlying realities which continued to work in those years. The laws of economics simply will not allow U.S. manufacturers, who are locked in worldwide competition, to continue to pay relatively unskilled employees $100,000 (or more) annually in salary and benefits and provide lifetime health care coverage, not if they want to sell their products at a price that will "move the metal". Further, protectionist legislation employed by our nation would only serve to exacerbate the problem and further deteriorate international relations. In fact, Bush tried this with the steel industry early in his term and it was a failure in many ways. As I've previously written, nobody knows with complete certainty when the next economic downturn will occur; recessions are inevitable and there will be another one again. The economic fundamentals, however, are now strong and appear to be improving in many ways. One tends to wonder about those who endlessly try to paint a picture of economic doom and gloom. In terms of the doomsday scenarios that are described by many of these individuals, are these events which they believe will occur or which they hope will occur? ------------ About the author: Ed Abraham is a concerned citizen living in flyover country, U.S.A., who happens to be truly disgusted by the loss of common sense in our society and is doing all he can to try to reinstall it. Email: eabra@myway.com Comment on this article here! ------------ All articles are EXCLUSIVE to Useless-Knowledge.com. Please link to this article rather than copying and pasting it onto your site (which would be unauthorized and illegal). |
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