Skip to comments.A Plea to Limbaugh: Rush's economics are getting extremely sloppy
Posted on 02/18/2010 10:27:39 AM PST by GOP_Resurrected
In a way, it feels a little difficult and presumptuous, from my perspective, to criticize Rush Limbaugh on the subject of economics. Had it not been for the Wall Street Journal and Heritage Foundation works he referenced on air when I began listening in the Clinton years, I would have probably never become as well-read and researched on the subject as I am now. Being a financial professional, following economic reports and analysis, is part of my daily routine.
Before I begin, let me clear the air: this is friendly fire! I am every bit as dismayed with policy coming out of Washington right now as Limbaugh. I think the "stimulus" bill was a wasteful monstrosity that bought us a tiny short-term gain, while putting a monumental screwjob to the U.S. taxpayer. I want with a passion to see Obama and his allies in Congress defeated at the ballot box, and lower taxes and free markets to again be on the agenda. And again, it was Limbaugh who planted the intellectual seeds to bring to where I am today.
But I just took in the first hour of his program today. And I can't sit by listening to his demonstrably untrue, sloppy economic commentary anymore and not make at least a small voice heard here on FR. He is not being an articulate, learned observer from the supply-side school of economics anymore, he's being a partisan and ideological hack.
I understand the natural inclination of a partisan to want to play up the negative and minimize the positive. Yes, employment is painfully high, and even the bullish forecasters expect it will remain so for sometime to come because it is a lagging indicator. So, high unemployment is the main metric by which Rush critiques current conditions. He did NOT do this under Bush in the 20 months after the recession of 2001 ended when the economy continued to shed jobs. He then argued - absolutely correctly - that it was always the last indicator to turn positive.
He has spent the past three weeks denigrating the 5.7% GDP growth rate of the 4th quarter, repeatedly asserting that it's "all government spending." This is simply not true. Government was a negative on GDP performance in Q4, and for all of 2009, federal spending accounted for only .3% of GDP growth, which is right in line with historical averages. This of course makes sense, since he can't argue in one breath that only a small portion of Porkulus has been spent (which is true) and thus wouldn't have been ABLE to have a huge impact, and in the next breath chalk all positive news up to a fiscal sugar high from government.
Limbaugh seems to coming from the all-too-common fatalistic perspective here on FR: that we are in a perpetual downward spiral heading towards bread lines as long as Obama sits in office. The bad measures of the economy are trumpeted from the rooftops. The positive ones, which are by far the most numerous these days, are to be pissed on, waved away, or chalked up to political manipulation. Of all people, Rush should have more faith in the U.S. economy than that.
Rush, I don't know if you surf FR regularly anymore, but consider this an open letter. Please, STOP! Stop the gloom, stop the pessimism, stop the sloppiness. I'd like to recommend a book for you: "It's Not as Bad as You Think," by Brian Wesbury, chief economist at First Trust Portfolios. And no, his is NOT a Rubinite Wall Street lefty, he's a supply sider and regular contributor to National Review Online. Inform yourself and stop shooting from the hip on the most important issue of the day.
The anklebiters at Media Matters need to be relegated to the inane hair-splitting and grievance mongering they're known for. But as of late, you are giving them REAL MATERIAL to call you out on. If you're going to be a figurehead for our movement, please know what the hell you're talking about.
Ok? Get back to me when your radio show is on the 20+ years.
“He has spent the past three weeks denigrating the 5.7% GDP growth rate of the 4th quarter,...”
What part of the Kenyan and his minions are manipulating the data don’t you understand? The high jobless rate is fatal to the success of the Kenyan’s communist coup.
Employment is not painfully high, unemployment is.
This ianalysis would be really nice EXCEPT that the latest numbers on unemployment claims ROSE. Fact is we are in a nasty long recession made worse by the idiots in DC
Government spending has hurt us enormously and there is NO END in sight.
Remember that all of these number crunching stats guys are the smart ones who brought us ENRON and AIG. Their track record shows successes only for themselves
You claim to be very devoted to Free Repulic, didn’t you join less than 3 months ago?
On substance, I do NOT believe Rush attributes GDP growth to the “stimulus”. He says the stimulus money went in large part to government union workers who are democrat party supporters to prop up their unions.
He says just the opposite, that the stimulus created no jobs (Bayh agrees).
Maybe I’m IBTZ.
Well that certainly is an interesting perspective. You’ll get no flames from me as I do enjoy other’s thoughts on these serious issues, but I agree that the “flame-proof suit” is a good idea.
Maybe you need to read up on what Art Laffer is saying. I believe Rush has it correct.
I skimmed your letter, my advice to Rush is to avoid it altogether.
Wow -- and to think that you came up with this dissertation of yours, statistics and all, in what??? twenty minutes.
Please take this in the kindest possible way, but why not tell Mr. Limbaugh, not us? We are hardly responsible for his shop prep (although I like to think we have validated some of this opinions and helped him form an opinion as to the mood of his audience.
In other words, go tell someone who is able to affect the outcome. Mr. Limbaugh doesn’t seem like someone who isn’t able to reassess his position if proven wrong. God knows, he’s had enough humbling experiences in life.
Of all of the economics pieces on this melt down that could be recommended, anything by Westbury is a lose-lose proposition. He didn’t see this coming, and he has no clue how bad it is.
I used to follow stocks....
please explain to us why, when there is good economic news the stock market tanks and when there is terrible news the market skyrockets?
I heard most of the growth was due to restocking.
Please, STOP! Stop the gloom, stop the pessimism, stop the sloppiness.
You have got to be listening to somebody I am not familiar with.
You are exactly right... Re-stocking inventories drove 3% of the 5.7% growth. Retail sales another 100+ basis points. But, honestly, this should have been expected as the economy is coming off such a low base. I’ve been posting on here for a year that Q4 and Q1 GDP numbers were going to be strong. The issue, both economically and politically, is what happens in the second half of 2010 and 2011. Art Laffer has stated that he thinks that 2010 will be strong as everyone is anticipating higher taxes next year and will get there spending in now and cut it back next year to pay for the increased tax bill.
There is extreme danger in thinking that the economy won’t recover between now and 2012 and Obamarx is a sure 1 termer. The economy will almost certainly be in the 3rd year of recovery and there will be job growth (barring a catastrophic terrorist attack or massive economic miscues like raising taxes on everyone or China collapsing). The US economy is just too strong and resilient...and it will have NOTHING to do with Obamarx but he will get the credit. The president always does.
As a financial professional (you), I would instead let this thread die and reformat it a different way. From the get go, structure a broad overview of the financial trend as you see it and what indicators mean what. Then project a short and long term estimation of our situation. This way you instruct those that are not financial pros and also allow other financial pros who have a different view to build a positive argument on viewpoints.
As it is I'm afraid you condemned yourself to adversarial bickering with very few Freepers sticking around long enough to learn anything because name calling and heat get tiring.
If you do reformat the post to a more educational and less confrontational format, I would be interested in your view as to what China's dumping of 34 billion of our bonds mean. I'm not really interested in this thread as constructed though, because with the animosity it is designed to generate it probably won't produce much information of value.
Good luck and I hope we see more neutral educational financial threads on FR. I would join that ping list.
And, I would add, that most of the people writing on economics for _National Review_ also have their heads in a hole in the ground. Ben Stein, Larry Kudlow, et al. They all were wrong going into 2008, they’re still wrong now.
The people who keep claiming that tax cuts will cure what is wrong with the economy now are just out to lunch. Tax increases certainly won’t help anything, but tax cuts (other than payroll tax cuts) won’t induce consumers to spend. The Bush tax rebates showed us what people will use “found money” for - paying down debt. Not spending.
“Limbaugh seems to coming from the all-too-common fatalistic perspective here on FR:....”
Guess your newbie screed really is against Free Republic.
To clarify for your brilliant economic mind. We have a business contraction still under way in important segments of the economy, because government has raised taxes, overspent, over regulated, and threatened humongous additional regulations and takeovers.
Many economists say that bottom lines improved somewhat but that the top line, revenue, is way down. People don’t have jobs, people aren’t spending, institutions aren’t lending.
But here you are to explain that everything is much rosier, when Obama just predicted high unemployment for years.
As for the George W. Bush years, most of those saw VERY low unemployment and strong growth.
And finally, whatever growth the economy sees would have been more robust with less spending and less harrassment by a left wing government.
You claimed to be just as opposed to Obama’s policies as the rest of us. You sure didn’t write much about that.
To address your post on substance. Under our current Usurper in Chief, the economy is enriching public sector employees at the expense of private sector employees, and he will get away with it until those in the private sector wake up to the game he is playing.
We shall see... you measure by the past... we are in uncharted waters... and they be monsters in these here waters.
And if you do a bit of research the Clintons perfected the art of cooking government books.... and whatever numbers come out of this bunch will gently be revising gradually on some late Friday night.
Government produces NOTHING they are the literal source of globalwarming of our national economy.... AND this bunch has spent into servitude children not yet born, AND this year they intend to destroy even more with their climate change by letting the Bush tax cuts burn on the proverbial wilted vine.
I keep reading my Econ books and can’t find your name. Why is that?
And we should NB that the reduction in imports also added to the GDP.
As for job growth: I believe it will be tepid, at best. As has been seen in other recoveries from financial sector melt-downs, employment takes a long time to recover - six to seven years. I don’t believe we’ll see anything approaching 5 to 6% unemployment anytime before, oh, 2014 to 2015.
We’re nowhere near done writing down bad debt in this economy. Nowhere close.
The biggest reason I could see Obama hanging on more than one term is because the GOP has no one who has a clear-cut plan on how to reinvigorate the US economy, increase employment and increase wage growth. Right now, the GOP has it easy as the opposition party - they can just say ‘no.’
GDP consists of CIG. Was C pushing up in positive territory? No. Flat at best. Is I increasing at a rapid pace? No. Is G strapped to a rocket and accelerating at a pace never before imagined? YES!
I also find your claim that government spending only accounted for .3% of GDP growth in 2009 to be very odd. Especially considering GDP FELL in 2009. It did not grow.
Since Nov 26, 2009
Very well stated, IrishCatholic.
I would also like to see what you suggested, “more neutral educational financial threads on FR”.
I agree with ALL of that. I’m just not one to think that unemployment is going to increase over the next 3 years and that the economy is just going to collapse and Obamarx is gone. There is a TON of time left before the 2012 election and things will most definitely change.
I have no clue who the GOP nominee will be but I’m not at all comforted by the names being thrown around right now. Couple that with the GOP stupidity of nominating the guy who’s “turn” (hey Mitt!) it is and you can see the defeat coming...
What part of the Kenyan and his minions are manipulating the data dont you understand? The high jobless rate is fatal to the success of the Kenyans communist coup.
Sorry, "books are cooked," is not an argument. It's the opposition's way of saying, "These numbers are very inconvenient for me!" The numbers are generated by career statisticians and economists at DOL and BEA, not Obama's political appointees. It was absurd when Kos and the other lefties threw the charge at Bush, it's absurd now.
And this doesn't seem to comport with the idea that these figures will so obviously be "revised down," aluded to on the thread more than once. If you're going to lie with bogus numbers once, why not keep lying rather than make yourself look like a salesman who overpromised 30 or 60 days later?
Employment is not painfully high, unemployment is.
Yes, thanks to all who helpfully pointed out that I'm human and make typos. So sorry. But my meaning was clear and the content was well thought out, not repeated misstatements on a subject in which it is easy to retrieve the facts.
This ianalysis would be really nice EXCEPT that the latest numbers on unemployment claims ROSE.
Yes, you are referring to the WEEKLY claims for new unemployment. This is a highly volatile number, subject to a lot of seasonal and event-driven swings. It's important to look at the long-term trend with this measure and not read too much into a week's data. This week also showed the 4-week moving average of claims DROPPED to 468k, an improvement of more than 100k from 6 months ago.
Please take this in the kindest possible way, but why not tell Mr. Limbaugh, not us?
Well I spent 15 minutes today dialing and re-dialing to hear busy signals, which is common. Made it through to his show maybe 5 times in the 18 years I've been listening, but not this time. My guess is, there's a greater chance one of his premium listeners will get word of this thread back to him than he will pick my email out of the tons he gets from non-paying peons like me.
As far as that goes, I've also seen quite a few "open letters" to Obama and GOP politicians on FR, too. About as much chance those authors can "tell" the recipient directly as I can.
Of all of the economics pieces on this melt down that could be recommended, anything by Westbury is a lose-lose proposition. He didnt see this coming, and he has no clue how bad it is.
Wesbury predicted no recession because, right up until the failure of Lehman Brothers in 2008, the data didn't warrant it. He argues persuasively that the U.S. could have perhaps have avoided a recession altogether had mark-to-market accounting, Lehman, and a confluence of other factors not led to a plain, old-fashioned financial PANIC as happened in late 2008, but that's too long a discussion for this thread.
But fair is fair, it was a missed call, as was the case for most of the Street. For the record, Wesbury is not a permanent bull. He was one of a relative few who predicted the recession of '01.
I keep reading my Econ books and cant find your name. Why is that?,/I>
Neither will you find Limbaugh's. We all offer our analyses on the shoulders of experts who know economics much better than we do, so not really sure of the point here.
Everyone who offered agreement and constructive criticism, thanks much. I am not trying to deny that Rush's contributions to the conservative movement have monumental, and have reached millions more people than, say, William F Buckley could have ever hoped to. But it's BECAUSE he is an important leader that he needs to be more cautious in his assertions. It's no secret that liberals have the transcription devices on him every second. Why not take care and know that he's being factual instead of giving somebody like Chris Matthews the opportunity to ask an elected Republican, "Sir, do you realize your criticism of the stimulus plan stems from the same false analysis given by Rush Limbaugh?"
To clarify, what this means is that if every other component that can add or subtract to overall GDP stayed level, then the component for GOVERNMENT PURCHASES OF PRODUCTS - not Social Security, Medicare, or expenditures like that, but actual purchases - would have given us a GDP growth rate of .3%. And obviously this includes the bulk of "stimulus" spending, ergo that form of spending could not be artificially puffing up the GDP figure.
Sorry for the confusion.
So Obama is lying when he says the stimulus has lead to the increase in GDP?
I love Rush. I listen to him every day. But I think he is a victim of his success. I think he has other people doing show prep for him. He’s just gotten a little sloppy. It was apparent with a lib caller a few days ago; he did a terrible job and basically brushed him off instead of arguing substance. I just don’t think he’s working as hard as he used to. He’s still the best; he’s just not as good as he used to be.
Yes and no. The form of spending that would categorize stimulus was no higher than its long term average. Again, only about a quarter to a third (estimates vary) of the total package has been spent, so the impact for 09 wouldve been minimal.
Obama can correctly say that GDP growth is higher than it would otherwise have been, since this spending is a component of the formula that calculates it. That’s not to call it an efficient use of tax dollars or an effective policy long term, it obviously isn’t.
The short answer is Porkulus has approximately zero to do with the current fundamentals of the economy. Its “benefits” are short lived and tiny. And the hangover to come will certainly make it look foolish in hindsight.
I think that’s as good an explanation as any.
You could tell a real difference 15 or 20 years ago. He was sharper, and you could pick up that he was learning himself, on air.
He’s just not inquisitive or analytical anymore, it’s all dogma. He’s in a comfort zone, seemingly afraid to come out and continue his education because doing so would be a betrayal of Reagan or something. Hate to see it.
The Trolls have spread from the birther threads into the mainstream. It's contagious.
Oh -- so then people paying down debt is a bad thing??? since when??? Don't people who have less debt and are paying out less in interest [and taxes] also then have more spendable income???
Your economics is upside down and leftwinded.
Hey, I have an idea. Why don’t you at least try to address the substance of what I said, or is this a place of such forced unanimity that even mild critique of one of our allies is written off as the work of a “troll?”
In an economy that is (or was) 70% based on consumer spending, as consumers don’t spend, the economy will contract.
People paying down debt is a good thing - for the individual.
It is not, however, a way to grow the US economy.
The reason why any economic “gains” made during the Bush administration were a mirage (and I’ve stated so on FR before) is that household earning power was flat during the Bush administration - all increases in consumer buying power came from the expansion of credit. The Bush administration was a complete and utter failure in terms of organically increasing consumers ability to buy.
So because the US consumer increased their buying based on the expansion of credit, now as they not only don’t increase their credit, but pay it down, the economy will contract.
You came up with this dissertation of yours in all of twenty minutes??? Color me suspicious.
Be suspicious all you want. It wasn’t hard to do with all the access to economic reports I have.
I guess if you think it was great work in such a short time, I’ll take it as a compliment.
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