Skip to comments.Alive and Kicking Twenty-five years after the Reagan tax cuts, the economy is still cruising along.
Posted on 08/15/2006 7:31:40 AM PDT by PDR
The great American consumer has been written off so many times in the last couple of years, just like the rest of the economy. But he/she is alive and kicking. Another great story never told.
Retail sales came in at 1.4 percent for July, way above Wall Street expectations, while core sales excluding autos, gas, and building materials a number that feeds directly into GDP increased 0.6 percent. Over the past 3 months core sales rose 6.7 percent at annual rate, and in the past year theyre up 7.4 percent. Excluding autos alone, sales have gained 9.2 percent in the last 12 months. Thats big time.
Sales of consumer durables also were strong. Some economists sounded the death knell for consumers when durable sales dropped in the second quarter. But in the newly released July report, durable-goods sales rose across the board: 3.1 percent for cars, 1.9 percent for electronics and appliances, 1.8 percent for building materials, and 0.5 percent for furniture. These are fat monthly gains.
Far too many investors, hedge fund managers, and economists link the housing slowdown to an imminent consumer collapse. These bears are also quick to add rising gas prices and higher interest rates into their pessimistic outlooks. But they skip two very significant data points: jobs and incomes are still climbing.
It may well be that Wall Street keeps overestimating the monthly job gains, but the fact remains that jobs are being added at a noteworthy clip of about 125,000 per month and the unemployment rate remains low. Because hours worked and wages continue to rise, incomes are still increasing at a comfortable 6 to 6.5 percent yearly pace. If jobs and wages were falling each month, you could write off consumer spending. But thats simply not happening.
(Excerpt) Read more at article.nationalreview.com ...
Oh, Lawrence. Housing slowdown, high crude prices -- these are not trivial things.
It amazing that the stock market has flirted with the highs it last saw when crude was $25 a barrel. But it's starting to show the wear and tear of high crude prices.
Fortunately, the crude chart looks horrible.
People trivialize things they don't want to face or acknowledge. In spite of our massive, confiscatory taxation levels and costs of regulations that businesses face, we are still doing fairly well...but it isn't going to hold. Because..the government will not stop its runaway spending and associated taxation, a main force influencing the economy. Sadly, it always seems to take a major downside to get the power-focused pols to slow down buy their power with our tax dollars...
The Greatest Story Never Told"
Reagan didn't create jobs or increased production and services - and he never claimed he did. What he did do was to reduce the bad effects of the government and its policies on the economy so that the "private sector" (more properly designated "we the people") increased the GDP and created jobs.
That is what really frosts "liberals" about Reaganomics - it extols government disipline - and government inaction. "Liberals" want to be seen to have done something, not heroically standing pat the way Reagan advocated.
Many young Americans are unaware how bad economic conditions were in the USA under Jimmah Carter, circa 1980. After a few rough years we turned the corner in 1983 and haven't looked back. Thank God for President Reagan and his bold reform policies on federal income tax code.
Some folks don't seem to recall the elder Bush's L-shaped recovery from recession of the early 90's. It wasn't always a boom.
The article mentioned the short periods of economic slowdown.
"Over this time span, the U.S. has experienced only six quarters of negative GDP a remarkable performance."
The "recession" of 1991 was largely a media creation. It was a very minor slow down, barely even a blip.
The chart in post 9 shows a 'media creation' that lasted two years. Damn that MSM.
The MSM consistently talked down the economy prior to the 1991 elections. A small dip caused by the Bush tax increase was propagandized into "the worst economy since the depression."