Economy

Edited Sunday 20 Nov, 2005 12:48 pm

I've given this topic much more thought since I posted it quickly on Friday. I've made comments about President Bush's administrations superior handling of the economy on many fronts including defending it on politically conservative websites, regional news and even religious sites. I'm usually quickly dismissed as some kind of extremist conservative who would defend Bush no matter what. Well, I have my disagreements with some decisions and have no trouble expressing them.

On the conservative edge website, I posted a comment to an article they posted back in October. I've thought of that post, my comment and other comments since. They system doesn't allow readers to look up recent comments or bring topics out of the archives so I am posting it here for my reference.

Conservative Edge writes:

Dow Down: Inflation Up http://www.conservativeedge.com/default.aspx?id=readarticle&AID=695

The Dow Jones dropped 60 + points today on concerns over inflation. To the folks in the world of Conservative thought who have not heeded our economic warnings here, it is time to wake up! Higher gas prices - which Bush and the Republicans have done nothing about - are now being felt in the pocket book of every American. The GOP is nothing if not weak. They have quivered and cowered and continued to write checks on the bank of the American people, all the while putting faith in an economy that is hanging dangerously in the balance. The tax cuts were great - but it is time to get serious about a new source of energy, and cutting deficit spending. Read more on inflation here: http://dailynews.att.net/cgi-bin/news?e=pri&dt=051018&cat=news&st=newsd8dak7s00&src=ap Broken Link Posted By:Leland Conway @ 10/18/2005 6:09:00 PM ConservativeEdge.com

I had originally commented at the Conservative Edge:

I blogged this on my personal blog before I read your post. All I can say is I like The Conservative Edge, but don't agree on this point. If you're interested, http://blog.davidfrancis.org. sokybiz @ 10/19/2005 10:27:00 AM

The blog post I mentioned is titled "Hiding from good economic news?" http://blog.davidfrancis.org/2005/10/hiding-from-good-economic-news.asp

Hiding from good economic news?

Reading the doomsday economic reports on the web and other media, so many people would have you believe that the economy is on the brink of ruin. I have made the statement and hold fast to my opinion that we are recovering from poor management during the last administration as well as dealing another issue from the previous administration called the war on terror (though the economic affects are mixed) and a few issues that are completely out of the control of anyone and that's the recent (and pending?) natural disasters.

I've posted quite a few opinions on this, even on sites that supposedly support our current president only to be quickly "corrected" and warned that things are going to get worse. I'm not convinced. With all the circumstances pushing and pulling on the domestic and international economies, we really are doing great. Even the recent decline in jobs was way below expected when factored in with the displaced people in Louisiana.

But in all fairness, I am no financier!! That is for sure. All I can go by is what I see, what I know and my own common sense... which I have been told is sorely lacking. Okay, but from a simple mans perspective, a small business owner and as a social and economic conservative, I'm here to tell you that things are going great! Our economy is holding in the face of high fuel prices, natural disasters, a war on terror with many fronts and most pointedly, a deep and passionate political divide in America. We may not be making huge gains but the fact that businesses are growing, earnings are improving and jobs are available tells me that the next ten years are gonna be boom years.

Where do I get such wild ideas? Simply look at this morning's Associated Press headlines. I added color coding for easy reference.

I've posted this opinion before, but I truly believe that the economic glory years of the 90's was due in no small part to the conservative economic foundation set forth in the 12 years prior. It took 8 short years to destroy it and that is another influence on the current economy. I may be way off but it remains my opinion.

If I'm wrong then you can tell me you told me so... if I'm right then we all win now don't we.

Well then, in my regular business readings, I visited "Small Business Trends" and they had made reference to the 3rd quarter in an article posted on the 17th, "Economic Conditions for Small Business Still Remarkably Strong By Anita Campbell on November 17, 2005." in summary, the article sites a recent Small Business Administration report titled: "Third Quarter 2005: The Economy And Small Business" in which some very encouraging ecenomic information is offered especially when looking at small business activity. I've converted the opening to HTML for posting here.

http://www.sba.gov/advo/research/sbqei0503.pdf

Trends

• In the third quarter of 2005, Americans dealt with the ramifications of Hurricanes Katrina and Rita and rising petroleum prices; nonetheless, the economy continued its expansion. Real gross domestic product (GDP) grew at an annualized rate of 3.8 percent, up from 3.3 percent the previous quarter. Personal and business spending accounted for this result as real personal consumption and real gross private fixed investment increased at annualized rates of 3.9 and 2.2 percent, respectively. Non-farm productivity increased a healthy annualized 4.1 percent in the third quarter, up from 2.1 percent in the second quarter. Meanwhile, exports, imports, and proprietors’ income remained relatively flat. Industrial production declined, due in large part to the storms.

• Measures of optimism were mixed, especially after the hurricanes. The National Federation of Independent Business’ monthly Optimism Index fell slightly, to 100.0, but this level still indicates that the small business sector is growing. The same survey found that a large percentage of small businesses respondents consider the next three months “a good time to expand.” This contrasts with the University of Michigan’s Consumer Sentiment Survey, which fell from 96.5 in July to 76.9 in September. Despite the increased pessimism, consumption spending is still strong.

• The unemployment rate fell to 4.9 percent in August but rose to 5.1 percent in September after the hurricanes. The economy has created nearly 1.6 million net new jobs so far this year, with 453,000 of those stemming from the third quarter. Employment rose in most major industries with the exception of leisure and hospitality, manufacturing, retail trade, and other services. The national perspective, however, masks the employment losses that have resulted from Hurricanes Katrina and Rita in the affected areas. Between August and September, Louisiana lost 251,000 individuals from its non-farm payroll and Mississippi lost 59,700.

• The Federal Reserve has continued to raise interest rates in an effort to stabilize the growing economy. Higher rates, though, have not dampened demand for small business lending, which according to the Senior Loan Officers’ Survey, remains strong.

• The price of West Texas crude reached an average of $65.57 for the month of September, resulting in significantly higher prices for gasoline attributable to hurricane-related damage as well as continued increases in global demand. Consumer prices (excluding energy costs) have remained under control, rising at an annualized growth rate of 1.6 percent for the third quarter.

Now this probably should have been posted on my business blog @ www.soky.biz but since it is supporting my personal and political opinion, it's better offered in a less formal atmosphere. I still hold to the opinion that the current administration is doing a great job with the US economy. I even revisited the Conservative Edge posting and offered yet another comment to their October posting.

I wish there was a way to bring this topic back up to the top like a discussion forum. But since there is not (yet) I thought I would comment here that I have posted the SBA report on my personal blog which kind of supports my position. The fact is, on Oct 7th 2002 the Dow Jones Industrial Average Index was as low as 7,400 points and the Friday Nov 19th close it is at 10,766 - I know many people will argue that this administration inherited a 11,908 index on 1/1/00 but as I have argued in the past, this administration also inherited 8 years of poor fiscal decisions. Throw in Osama Bin Laden, a new war on terror and multiple war theaters, as well as the highest energy costs in history due in no small part to natural disasters, this administration has proven its salt. I will write more on this in the coming weeks at my personal blog. http://blog.davidfrancis.org sokybiz @ 11/20/2005 1:44:00 PM

And that's how I feel about that.