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EducateWorthington.org

The 912 Project - Glenn Beck

912 Group of Central Ohio

Please let me know if you'd like your link added

Greenspan Praises Economy
At Senate Nomination Hearing

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
June 15, 2004 2:45 p.m.

WASHINGTON -- Federal Reserve Chairman Alan Greenspan on Tuesday
described the performance of the U.S. economy over the last few years
as "most impressive."

Testifying to the Senate Banking Committee at a hearing on his
nomination to serve a new term as chairman of the board of the U.S.
central bank, Mr. Greenspan said Fed policy makers deserve credit for
shielding the economy against a variety of shocks in recent years.
Politicians, he said, deserve credit for encouraging "market
flexibility" and for letting the central bank do its work.

Mr. Greenspan affirmed the Fed's view that rate increases should be
measured, with the caveat that they depend on the data. He says
the "economy is growing in a solid fashion," but that "inflationary
pressures are not likely to be a serious concern in the period ahead."

"The performance of the U.S. economy has been most impressive in recent
years in the face of staggering shocks that in years past would almost
surely have been destabilizing," Mr. Greenspan said in prepared
remarks. He said "we trust that monetary policy has contributed
meaningfully" to that performance. (Read the full text1 of Mr.
Greenspan's prepared testimony.)

 
But Mr. Greenspan also said the central bank must stand ready to deal
with a large number of possible threats to the economy, including
another terrorist attack on U.S. soil. "Going forward, we must remain
prepared to deal with a wide range of events. Particularly, notable in
this regard is the fortunately low, but still deeply disturbing,
possibility of another significant terrorist attack in the United
States," he said.

Mr. Greenspan, 78 years old, has led the Federal Reserve since 1987 and
has served under four presidents. If he is confirmed by the Senate, as
is expected, he would serve until the end of January 2006, when his
term as a member of the Fed board expires. "I have been extraordinarily
privileged to serve my country at the Federal Reserve during most of
these years and would be honored if the Senate saw fit to enable me to
continue this service," he said.

Because inflation has been rising steadily this year, Wall Street
widely expects the central bank this month to raise interest rates for
the first time in four years. The expectations call the key federal
funds rate, now 1%, to rise a quarter percentage point on June 30 and
to climb to 2.25% by the end of the year.

 CNBC DOW JONES BUSINESS VIDEO



Fed Chairman Alan Greenspan testifies at his renomination hearing
before the Senate on the economy, inflation, and the markets.

 
Windows Media Player Required:
HIGH bandwidth2 (DSL, Cable)
LOW bandwidth3 (Dial-up)    
 
 
 
Mr. Greenspan said that high oil prices are not yet affecting monetary
policy. "I'm not sure they are the material factor in monetary policy
at this point," Mr. Greenspan told lawmakers on the Senate Banking
Committee during his renomination hearing.

In response to a question from Sen. Jim Bunning (R., Ky.), about the
impact of record-high oil prices on the economy, Mr. Greenspan said the
Fed was carefully "watching" prices. But, he said, the Fed was focusing
more broadly on the overall package of costs, which include unit labor
costs. Mr. Greenspan said that unit labor costs, which accounts for two- thirds of costs of businesses, have started to rise modestly.

The Fed chairman also took a jab at a statement from Sen. John Kerry's
(D., Mass) presidential campaign that the U.S. economy was in the worst
shape since the Great Depression.

Sen. Jim Bunning (R., Ky.), read part of that statement to Mr.
Greenspan and asked him whether he would agree with the description of
the state of the economy. Mr. Greenspan replied: "I would strongly
disagree with that statement."

Mr. Greenspan said the U.S. economic recovery now "seems to have legs
to it" and said the near-term outlook for the federal budget is
brightening: "Revenues are going to be reasonably good over the next
fiscal year." That, he said, will "contain" the country's giant budget
deficit for now.

Still, he warned that the long-term outlook for the budget remains
bleak because the government is likely to incur high costs as the Baby
Boom generation retires over the next decade. "The numbers, I find, are
very disturbing," Greenspan said.

In his prepared testimony, Mr. Greenspan said that over the past 25
years the central bank has been able to deal with dangerous
inflationary forces, the fallout from stock-market crashes and a series
of financial crises. "These developments did not divert us from the
pursuit and eventual achievement of price stability and the greater
economic stability that goes with it," he said.

Mr. Greenspan said the economy was able to absorb the shocks of the
Sept. 11, 2001, terror attacks and mount a recovery even
though "remnants of the effect remain," he said.

The Fed chief said he and other policy makers learned a great deal
about how to manage the economy through such an episode and continue to
work to develop methods to protect the nation's banking system should
another such devastating attack occur. "Our efforts to further bolster
the operational effectiveness of the Federal Reserve and the strength
of the financial infrastructure continue today," he said.

Write to the Online Journal's editors at newseditors@wsj.com4

 URL for this article: http://online.wsj.com/article/0,,SB1087311...3437494,00.html
 
 

[Robust increases in U.S. industrial production and housing starts last month fueled more optimism about economic growth.]

May Industrial Output Jumped
As Capacity Utilization Climbed

WASHINGTON -- Robust increases in U.S. industrial production and housing starts last month fueled more optimism about economic growth.

Industrial production advanced 1.1% in May, showing that manufacturers are on a firm recovery path, the Federal Reserve reported. The gain, the best one-month showing since August 1998, compares with a strong unrevised 0.8% rise in April.

Manufacturing production, the largest part of industrial activity, grew by 0.9% in May, up from a 0.7% increase the month before. Some of the production growth was due to unseasonably warm weather, which contributed to a 3.3% increase in output at gas and electric utilities, up from the 1.5% advance in April, the report said

Industry used 77.8% of capacity during May, the highest level since May 2001. April's revised level was 77.1%; it was initially reported at 76.9%.

http://online.wsj.com/article_print/0,,SB1...6938607,00.html
 

[weakness is temporary]

The glass is half full
 
Recent weakness is temporary, mostly from the jump in oil prices in the spring.
July 2, 2004: 12:20 PM EDT
By Mark Gongloff, CNN/Money senior writer
 
NEW YORK (CNN/Money) - Stop worrying.
 
Sure, we've gotten a string of some mediocre economic reports lately, but they're just bumps on the road to a glorious expansion.

http://money.cnn.com/2004/07/02/markets/gl...dex.htm?cnn=yes

 
 

Economy Set for Best Growth in 20 Years


WASHINGTON (AP) - The economy appears headed for a banner year despite a springtime spike in energy prices and a recent increase in interest rates.

In fact, many analysts are forecasting that the overall economy, as measured by the gross domestic product, will grow by 4.6 percent or better this year, the fastest in two decades.

There were strong 4.5 percent growth rates in 1997 and 1999, when Bill Clinton was president and the country was in the midst of a record 10-year expansion.



http://apnews.myway.com/article/20040706/D.../D83LFTV00.html

[A new set of figures from the Bureau of Labor Statistics show HIGHER-paying jobs growing faster]

Economy Producing Mostly Bad Jobs? Not so fast.
A new set of figures from the Bureau of Labor Statistics show HIGHER-paying jobs growing faster. A FactCheck.org exclusive. (But there's evidence on both sides).

http://www.factcheck.org/article.aspx?docid=208

 

 

[More optimism about economy]

Poll: More optimism about economy, country's direction
Tuesday, July 13, 2004 Posted: 5:38 AM EDT (0938 GMT)
 
(CNN) -- Americans are more optimistic about the nation's economy and less dissatisfied about the overall direction of the country, but their improved mood has not affected President Bush's approval ratings, according to a Gallup poll released Tuesday.

http://www.cnn.com/2004/ALLPOLITICS/07/13/...nomy/index.html

 

[UPDATE 2 - U.S. posts higher-than-expected June budget surplus]

UPDATE 2 - U.S. posts higher-than-expected June budget surplus[/size]

Tue Jul 13, 2004 04:21 PM ET

By Laura MacInnis

WASHINGTON, July 13 (Reuters) - The U.S. government posted a larger-than-expected budget surplus[/size] in June, propped up by higher quarterly business tax receipts, a government report released on Tuesday showed.

In the Treasury Department's monthly budget statement, June income outpaced spending by $19.14 billion, slightly less than the government's June 2003 surplus of $21.23 billion.

"What we are seeing is the impact of a good economy, the impact of extraordinarily strong corporate profits, and likely the impact of more people being caught in the alternative minimum tax," Drew Matus, financial markets economist at Lehman Brothers in New York, said in response to the report.

"Surprisingly strong receipts are really helping out a great deal here. There is no reason to suspect, given the employment growth we have seen, that this trend will change any time soon," he said.

Both income and expenditures rose in the month as the government collected more taxes and spent more on defense and Medicare than in June 2003.

Corporate income tax inflows grew 38 percent in June, when quarterly tax statements are normally filed, compared to June 2003. Individual tax receipts were nearly 9 percent higher.

On the spending side, defense expenditures rose almost 20 percent in June compared to the year-ago month, Medicare spending jumped 37 percent, and Social Security outflows rose a more modest 2 percent.

Link to complete article below:

http://www.reuters.com/financeNewsArticle....storyID=5659963

[Edmund Burke]

Here's a good commentary on that budget surplus.  What WILL Kerry run on...John-Boy's good looks?

_________________________________________________


July 16, 2004, 8:30 a.m.
Kerry’s Economic Deficit
The challenger will have trouble darkening this bright picture.

If it’s not bad enough that rapid economic recovery has neutered Sen. Kerry’s principal domestic criticism of President Bush, now comes even worse news for the Democratic campaign: The budget deficit is starting to substantially shrink.

The latest budget numbers show a $19.1 billion surplus for June, $3 billion higher than the $16 billion Wall Street expectation. It seems that a flood of new tax collections, spurred by fatter employment payrolls and corporate profits, is rapidly reducing the federal budget gap. Tax receipts from businesses rose an astonishing 38 percent over the past twelve months and personal income-tax collections increased almost 9 percent. What’s happening? Could it be that stronger economic growth from lower tax rates is producing more tax receipts? I believe it’s called supply-side economics.

Just as the 1.5 million new jobs created since last August has terminated talk of a jobless recovery, the chatter over widening budget deficits will end. The fiscal-year 2004 budget deficit now looks to come in around $435 billion, less than 4 percent of GDP. This would be almost $100 billion below early-year estimates from the Office of Management and Budget and about $50 billion less than Congressional Budget Office forecasts. The administration is also getting its arms around federal spending. Fiscal year to date, domestic discretionary program spending has slowed to 2.7 percent from 6.8 percent a year ago.

As the tax-cut-led recovery continues, deficits will rapidly wane over the coming years.

Former Clinton economic officials Robert Rubin, Gene Sperling, and Bowman Cutter — all now advising Kerry — continue to obsess over the alleged economic consequences of budget deficits. But there is virtually no evidence that the budget gap (two-thirds of which emanated from the Clinton recession) has had any negative effect on U.S. recovery prospects. In fact, even with the fastest economic growth in twenty years, long-term Treasury rates remain at 4.5 percent, the cheapest money in over forty years.

All this is why Kerry’s proposal to raise tax rates on upper-income individuals, small businesses, and key investment categories like capital gains and dividends is so completely out of touch. The Kerry tax hikes will blunt the good news on growth and deficits, exactly the reverse of what the pessimistic Kerryites are predicting.

Like the modern Democratic party, the Kerryites neither understand nor acknowledge the tax-incentive model of economic growth that simply restates an old truism: Individuals produce and invest more if it is more profitable after-tax to do so.

Ironically, by placing his $900 billion government-funded health-care plan at the center of his economic policy, Kerry has dropped any pretense of deficit reduction. He may take great pains to position himself as a Clinton-type moderate Democrat, but his policies are pure tax-and-spend liberal.

Oddly, when they dare to discuss the economic picture, one that clearly validates Bush’s pro-growth policies, the Kerryites talk about a middle-class “squeeze.” This is counter-factual. After-tax incomes adjusted for inflation have jumped 4.3 percent over the first five months of this election year, compared with the same period a year ago. That’s why retail spending over the first six months of 2004 has increased 7.7 percent compared with the year-ago period. The middle class wouldn’t be spending quite so rapidly if they were squeezed in the way the Kerry complainers allege.

Factual fallacy is at the heart of the Kerry campaign. In another blatant example, Kerry charges that health costs are spiraling out of control. While there is no question that the nation’s health system needs more consumer choice and private-sector competition, with less third-party payments, health costs are dropping. According to the Commerce Department, the weighted average of medical-benefit costs has slowed to only 0.6 percent in the twelve-month period through May. It is possible that some of the progress on this front has resulted from the tax-free, pro-competition, health savings accounts included in last year’s health reform bill, which was sponsored by President Bush.

Here are some more data that ride counter to claims being made by the Kerry campaign: The percentage of children without health insurance fell from 13.9 percent in 1997 to 10.1 percent in 2003, according to the Centers for Disease Control. During the same period, the percent of all children without health insurance for a year or more dropped to 5.3 percent from 8.4 percent. And the percent of “near poor” with public health-care coverage expanded to 47.2 percent in 2003 from 22.9 percent in 1998.

In other words, the Kerry campaign’s dark picture of American economic and social life is simply untrue. And in the areas where future improvements are necessary — including the Social Security system — a big-spending, overarching, government-regulatory scheme is not the answer. What is? Greater individual responsibility and personal choice in the context of our free-enterprise market system. It’s what will make this thriving nation even more prosperous.

— Larry Kudlow, NRO's Economics Editor, is CEO of Kudlow & Co. and host with Jim Cramer of CNBC's Kudlow & Cramer.
   

http://www.nationalreview.com/script/print...00407160830.asp

[Edmund Burke]

Consumer confidence is UP.  Can't be long before that's reflected in the polls.

____________________________________________
Conference Board: Consumer Confidence Hits 2-Year High
Tuesday, July 27, 2004
 
NEW YORK  — Consumer confidence rose for the fourth straight month in July thanks to steady improvements in the job market, the Conference Board (search) reported Tuesday, putting the indicator at a two-year high.

The New York-based research group reported that its index for consumer confidence rose to 106.1 in July, up from 102.8 in June and well ahead of the figure of 102.0 that investors had been expecting. It was the highest level for the indicator since June 2002.

Lynn Franco, director of the Conference Board's Consumer Research Center, said the gains were fueled by a better outlook for jobs, "and unless the job market sours, consumer confidence should continue to post solid numbers."

A measure of consumer expectations for future economic conditions rose sharply in June, while another one gauging their sense of current conditions edged higher. The group's "expectations index" jumped to 105.8 from 100.8 last month, while the "present situation" index was up to 106.5 from 105.9.

"Everything you see here is corroborating what we've seen in other indicators — that the labor market is improving," said Josh Feinman, chief economist at Deutsche Asset Management (search).

While the turnaround in employment over the last several months has been gradual, Feinman said he expected the improvements to hold. "I think it's pretty solid," Feinman said of the employment gains. But he added that "it hasn't been super fast — it's like an oil tanker changing directions."

 http://www.foxnews.com/story/0,2933,127143,00.html
 

[The American manufacturing sector sped up activity in July, cementing the longest stretch of rapid growth in more than 30 years, a survey showed. The Institute for Supply Management purchasing managers' index (PMI), based on a survey of supply executives, rose 0.9 point from June to 62.0 in July, in line with private economists' forecasts. It was the 14th consecutive reading above 50 points, which indicates an expansion in activity. "The manufacturing sector continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months," survey chief Norbert Ore said in a statement. "This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973," he said.]

US factories enter longest stretch of rapid growth in 30 years

Mon Aug 2,11:53 AM ET


WASHINGTON (AFP) - The American manufacturing sector sped up activity in July, cementing the longest stretch of rapid growth in more than 30 years, a survey showed.

The Institute for Supply Management purchasing managers' index (PMI), based on a survey of supply executives, rose 0.9 point from June to 62.0 in July, in line with private economists' forecasts.

It was the 14th consecutive reading above 50 points, which indicates an expansion in activity.

"The manufacturing sector continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months," survey chief Norbert Ore said in a statement.

"This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973," he said.

Key findings in the report showed:

-- New orders sped up, with the index rising 4.7 points from June to 64.7 in July.

-- Production accelerated, with the index up 2.9 to 66.1.

-- Employment grew, albeit at a slower rate, with the index easing 2.4 to 57.3.

-- Input prices rose at slower pace, with the index falling 4.0 points to 77.0.

"Today's ISM report provides further verification of the strong state of US manufacturing," said Manufacturers Alliance/MAPI president and chief executive Thomas Duesterberg.

"Overall economic growth in the second half of 2004 will be fueled by strong business equipment investment, purchases of high technology durable goods, and robust exports," he said.

"Leadership is now passing from the consumer and the government to the industrial economy, which bodes well for continued strength in manufacturing jobs and productivity."

The report added to signs that Corporate America is taking over the economic leadership from consumers, who buckled in June under high fuel prices, rising interest rates and the waning impact of tax cuts.

A government report Friday showed the economy slowed sharply in the second quarter to a 3.0-percent annual growth pace from 4.5 percent in the first quarter as consumer spending rose just 1.0 percent.

In the same period, business investment jumped 8.9 percent in the second quarter, up from 4.2 percent in the first. Spending on equipment and software rose 10 percent, up from eight percent.

Many economists expect economic growth to speed up in the second half of the year as consumers bounce back despite an expectation of gently rising short-term interest rates.

US President George W. Bush, campaigning for re-election November 2, highlighted recent reports showing record existing home sales in June and consumer confidence at a two-year high in July.

"These gains in our economy have come at a time when Americans are benefitting from the full effects of tax relief," he said in a weekend radio address.

Democratic presidential challenger John Kerry has seized on job losses, a middle class "squeeze" and record deficits in the administration's budgets to argue that Bush has mismanaged the US economy.


http://news.yahoo.com/news?tmpl=story&cid=...onomy&printer=1
 

[Total employment rose by 629,000 to 139.7 million in July]

THE EMPLOYMENT SITUATION:  JULY 2004
                                       
                                       
  Nonfarm employment was little changed (+32,000) in July, and the unemployment
rate was essentially unchanged at 5.5 percent, the Bureau of Labor Statistics of
the U.S. Department of Labor reported today.  Employment levels in most of the
major industry sectors were little changed over the month.
   
Unemployment (Household Survey Data)
   
   Both the number of unemployed persons, 8.2 million, and the unemployment
rate, 5.5 percent, were essentially unchanged in July.  The unemployment rate
has shown little movement since December 2003.  The jobless rates for the major
worker groups--adult men (4.9 percent), adult women (4.9 percent), teenagers
(17.6 percent), whites (4.8 percent), blacks (10.9 percent), and Hispanics or
Latinos (6.8 percent)--also were little changed over the month.  The unemploy-
ment rate for Asians was 4.3 percent in July, not seasonally adjusted.
(See tables A-1, A-2, and A-3.)
   
Total Employment and the Labor Force (Household Survey Data)
   
   Total employment rose by 629,000 to 139.7 million in July, and the employ-
ment population ratio--the proportion of the population age 16 and over with
jobs--increased to 62.5 percent.  The civilian labor force also increased over
the month, rising by 577,000 to 147.9 million, and the labor force participa-
tion rate rose to 66.2 percent.  (See table A-1.)
 
http://online.wsj.com/documents/bbemp.htm
 

[Edmund Burke]

Hey, unemployment claims are DOWN, AGAIN!  Despite expectation.  

___________________________________________
Weekly Jobless Claims Fall for 3rd Week

Thursday, August 19, 2004



WASHINGTON — The number of Americans filing first claims for jobless pay fell 3,000 last week, the Labor Department (search) said on Thursday in a report showing no impact from Hurricane Charley (search) which struck Florida last Friday.

Initial claims for state unemployment insurance benefits (search) dipped to 331,000 in the week ended Aug. 14, their third straight weekly drop, from a revised 334,000 in the previous week, the department said.

Wall Street economists had expected new claims to rise slightly to 335,000 from the originally reported 333,000 for the Aug. 7 week.

Full Story

[from our friends at Townhall.com]

from our friends at Townhall.com

Jobs and snow jobs: Part II[/size]

Thomas Sowell
September 10, 2004


Our current unemployment rate -- 5.4 percent -- is one of the lowest in the world and one of the lowest in our own history. Why then the hysteria about jobs? Because this is an election year and Senator Kerry is desperate for some issue that will rescue his faltering campaign.

According to the Kerry campaign, President Bush has "lost" over a million jobs since taking office. This of course assumes that jobs are Presidents' to win or lose.

Both in political rhetoric and media hype, Presidents are credited or blamed for all sorts of economic developments that they have had little or nothing to do with. Back in the 1980s, it was "the Reagan deficit" and in the 1990s it was "the Clinton surplus."

In both these administrations, as in all other administrations in the history of the United States, all spending bills originated in the House of Representatives. Both Reagan and Clinton faced a House of Representatives controlled by the opposite party.

Neither President could create a deficit or a surplus.

President George W. Bush came into office inheriting an economic downturn that began at the end of the Clinton administration. Then the September 11th attacks and the reactions to them disrupted the economy.

Have we forgotten about the drastic reduction in travel after 9/11, which plunged the airline industry into huge losses and dealt a blow to hotels and vacation resorts across the country? Jobs decline when the economy declines.

President Bush's tax cuts have been blamed for our economic woes by those who believe in high taxes. But the economy's decline began before taxes were cut and we now have a strong recovery without the tax rates being raised.

Few things have been more grossly distorted than tax cuts. Liberals in politics and the media seem to think that what matters is what happens to the money. In reality, what matters is how the cut in tax rates affects people's behavior.

Time and again, lower tax rates have led to higher tax revenues. That is because lower tax rates make it profitable to take money out of tax shelters like municipal bonds and put it into something that is more productive, now that taxes are no longer taking such a big bite.

When more money is invested in more productive economic activities, more output results -- and more jobs are created while generating that increased output. That is the whole point.

Link to full article, which is well worth the read:

http://www.townhall.com/columnists/thomass...s20040910.shtml


 

[Edmund Burke]

Nothing sluggish about our economy!  A bit of comparison from the WSJ.

______________________________________________________
That 'Sluggish' Economy
It's still the strongest in the world.

Thursday, December 30, 2004 12:01 a.m. EST

Google the words "sluggish U.S. economy" and "2004," and in 0.40 second you get 4,540 results. "Weak employment report points to still-sluggish U.S. economy," reads a recent headline, on the news that "just 112,000" jobs were added in November.

Well, we live in a world economy, so when headline writers use the word sluggish, we have to ask: Sluggish compared with whom? According to the November forecast of the Organization for Economic Cooperation and Development, gross domestic product in the U.S. is expected to increase by 4.4% in 2004. Elsewhere, the OECD predicts growth of 4% for Japan, 2.7% for the U.K., 2.1% for France and 1.2% for Germany. For the 12-country euro zone, the figure is 1.8%. To put matters in historical perspective, the last time Japan, Britain, France and Germany had growth rates at or in excess of 4.4%, the years were 1990, 1994, 1989 and 1991, respectively.

But, some say, America's current economic performance is sluggish compared with its past performance. So let's look at the data again. From 1997 through 2000--the great Clinton go-go years--U.S. growth averaged 4.25%. For Mr. Clinton's first term, the average was 3.3%. For the eight years of the Reagan presidency, it was 3.4%. By what standard, then, can this year's forecasted 4.4% be described as sluggish?

Maybe it can be argued that it's been sluggish in terms of job gains. It is true that in 2004 there were some months when job growth failed to meet expectations, although there were other months when expectations were exceeded.

Here again, however, it's worth putting things in an international perspective. Overall, the U.S. economy has added 2.3 million jobs since the third quarter of 2003, bringing the unemployment rate down to 5.4% from 6% in October 2003. In Germany, the unemployment rate is 10%; in France it's 9.5%. For the 27 countries of the OECD, the average unemployment rate is 6.8%. Only Britain and Japan, among the major economies, have unemployment rates lower than the U.S.

Full Commentary

The Wonder of Voodoo Economics

Who says you can’t cut taxes, increase spending, and reduce the federal budget deficit all at the same time? That’s what the Bush administration has managed to do. Two decades after then-presidential candidate George H.W. Bush characterized Ronald Reagan’s idea that tax cuts would spur revenue-generating economic growth as “voodoo economics,” the witch doctor is again at work.

http://article.nationalreview.com/?q=ZTk5Y...TJhZjlmNDc5YmQ=