August 16, 2008

The Pernicious ‘No Real Economic Progress’ Myth

Filed under: Economy,Taxes & Government — Tom @ 11:30 am

Note: This was originally posted at Pajamas Media on Thursday, with the subheadline, “The Bush years have been better for Americans’ wallets than most critics admit.”

Consider it 2008′s reality-based alternative to David Cay Johnston’s former annual flights of fantasy with incomplete IRS data at the New York Times. Johnston left the Times earlier this year after taking a buyout.

_________________________________________________

The Conventional Wisdom (CW) is that under President Bush:

  • The country’s economy has grown very little, and incomes have never gotten back to where they were before the recession.
  • That the rich have been getting richer, especially because of the Bush tax cuts, while, the poor and the middle class have been getting ever fewer crumbs.

While its performance hasn’t been as good as it could have been, the Bush economy has acquitted itself well enough that the CW should be discarded.

Let’s start with the overall economy.

Based on quarterly economic growth data from the government’s Bureau of Economic Analysis (BEA), the economy is almost 19% bigger now than it was at the beginning of the fourth quarter of 2001, the first quarter that the new president’s first budget was in effect (three of the five quarters prior to that had negative growth, first because of the bursting of the Internet bubble, and in the case of the third quarter of 2001, the September 11 terrorist attacks). Real growth during that time has averaged 2.56% — not stellar, and not as good as the best of the Clinton years, but certainly not the awful performance the CW typically assumes.

Why hasn’t it been better? I’m not alone in arguing that the post-Enron wave of burdensome regulation imposed by the Sarbanes Oxley (Sox) law has held the economy back, both by imposing onerous compliance costs on publicly-traded companies, and by largely shutting off the initial public offering market to all but the most stellar candidates. The next president and Congress are going to have to do something to reduce the excesses of Sox if we are ever to return to consistent growth of 4% or more.

Next, let’s look at overall income growth (original data obtained from BEA; this other BEA link has figures for Nominal Per Capita Income that are almost all within $10 of the figures listed below):

RealPerCapitaIncomeChart0808

At the end of 2007, the average American was almost 8% better off than in 2002 ($26,078 divided by $24,176), the trough of the post-bubble, post-9/11 recession. Again, this is nothing to party hearty over. But keep in mind that BEA data excludes capital gains, the benefits of which tend to skew towards those with higher incomes; so the measurements listed above better reflect what “working people” are seeing than other available measurements.

Many of the same people who deride the Bush Economy, especially its tax cuts, won’t face up to three very important points illustrated in the chart above.

First, the Clinton Economy didn’t become anything special for the average person until 1997, the first year of Bill Clinton’s second term. Why is that? It certainly wasn’t because of the tax increases of 1993. It’s clear from the chart that, if anything, they held back an economy that, given the technology improvements that were occurring at the time, should have been roaring after the early-1990s recession.

It was the capital gains tax cut of 1997 that caused the big personal income gains. That cut actually began having its desired effect in the year it was passed because the Clinton administration telegraphed its desire for it shortly after the 1996 election. Investors assumed correctly that passage by the then Republican-controlled Congress was assured. Thanks to that legislation, real per capita personal income skyrocketed over 12.5% during the administration’s final four years.

Second, real income during the Bush era didn’t take off until the 2003 investment-related tax cuts on capital gains and dividends took hold. Their positive impact on real income wasn’t visible until 2004. The 7.5% growth in real per capita income from 2004-2007 is also not as good as the best of the Clinton years, but, as noted earlier, you can lay a lot of the blame for that on Sox.

The third point is best made with a graph containing the chart’s final seven years, this time expressed in 2001 dollars:

RealPerCapIncomeGrowth2001to2007

As you can see, the claim that “incomes have never gotten back to where they were before the recession” hasn’t been true since 2004.

But wait, haven’t all of those income benefits gone to the rich, leaving nothing for the poor and middle class?

Hardly.

This data from the Census Bureau released last year (PDF can be retrieved by going to this web page) shows that the upper income limit and the mean household income of every income group presented went up in real terms from 2003-2006:

CensusIncomeQuintilesEtc2003to2006

As I said when I posted on this last year, “I’m not claiming these results are where I would want them to be, but they are all positive. In fact, the household results show more real improvement at the lower income levels than is found in the middle and upper-middle.”

I should also point out that the Bush rate reduction in the lowest taxable income bracket from 15% to 10% has increased spendable income for those in the lowest income quintiles disproportionately since 2001, while helping all but the very highest earners.

Since we’re about to enter presidential campaign silly season, it’s probably too much to expect politicians to challenge the CW claims noted at the beginning of this column. But one would hope that reality-based observers know better.

AP’s Nedra Pickler Has Bigfoot in Mouth in Corsi Controversy

NedraPicklerAP0808.jpgBigfoot0808he back-and-forth over Jerome Corsi’s book, “The Obama Nation,” has been heated, largely unfair to the author, and predictably marred by attacks from allegedly “objective” journalists as well as Democratic mouthpieces (but I repeat myself). Blatant examples of media bias have been noted by several NewsBusters posters, including Tim Graham (here, here, and here), Geoff Dickens, Mark Finkelstein, and Clay Waters.

But that doesn’t mean there haven’t been moments of humor. A delicious one comes at the expense of the Associated Press’s Nedra Pickler.

In her Thursday hit piece on Corsi’s book, here is how Pickler described the online publication where Corsi writes a periodic column:

Corsi writes for World Net Daily, a conservative Web site whose lead headline Thursday was “Astonishing photo claims: Dead Bigfoot stored on ice.”

(August 17 update: Joe Farah, Editor and CEO of WorldNetDaily, has informed NewsBusters and myself that Corsi “is a full-time senior staff writer ….. and has been for several years.” I regret if the previous characterization gave an incomplete impression of Corsi’s role there, which was not intended.)

Pickler’s purpose, of course was to ridicule the web site, properly identified as WorldNetDaily (without spaces between the words), by comparing it to tabloid publications like the National Enquirer — even though one of those terrible tabloids has been scooping AP and other traditional media on the John Edwards/Rielle Hunter story for months — and to attempt to dent Corsi’s fundamental credibility.

After all, the self-described and oh-so-dignified “Essential Global News Network” would never-never-never stoop so low as to do a story about Bigfoot.

Oh Nedra? Nedra? Over here:

Georgia men claim hairy, frozen corpse is Bigfoot
By JUANITA COUSINS
Associated Press Writer

A hairy corpse crammed in a Georgia freezer is Bigfoot, say two men who have been tracking the legendary creature, when they aren’t busy looking for leprechauns and the Loch Ness monster.

Matt Whitton and Rick Dyer say they stumbled across the corpse in the woods of north Georgia, across the country from the remote regions of the Northwest where people usually claim to see the man-ape.

Still, the Georgia men say DNA will prove once and for all that the frozen creature is Sasquatch. They plan to present DNA test results and photographs during a news conference Friday in Palo Alto, Calif.

Skeptics say it’s just another Bigfoot hoax.

The AP’s roughly 595-word story is longer than WorldNetDaily’s, which weighs in at about 530, but it also came two days later. The “Essential Global News Network,” scooped on the Bigfoot story. Oh, the indignity.

Someone should ask Nedra Pickler what her favorite condiments are when eating crow (pickles, perhaps?). Associated Press Writer Christopher Wills, who also contributed to Pickler’s report, should at least have to endure a side order.

To avoid further embarrassments, the AP needs to marshal its resources, and quickly. WorldNetDaily has done a Bigfoot follow-up (“Bigfoot hunters claim others of species live”).

(Disclosure: In case it’s noted by anyone — I’m not particularly fond of WorldNetDaily, as noted here and here, but the matter described at those posts is unrelated to the the points made here.)

Cross-posted at NewsBusters.org.

Positivity: Rosyth’s ‘medical miracle’ ready to go back to work after brain hemorrhage

Filed under: Positivity — Tom @ 6:56 am

From the UK:

Published: Thursday, 31st July, 2008 12:10

SEVEN years ago, Elizabeth Ogg was struck down with a brain haemorrhage which was so crippling that doctors said she would spend the rest of her days in care.

But today, she is living independently, walking – albeit with the help of a stick – getting ready to start volunteer work and making plans to go back to work full-time.

It’s a far cry from the predictions that she would never lead a normal life again following her aneurysm, which “came out of the blue” in 2001.

Elizabeth (55), of Churchill Place, Rosyth, recalled, “I was living in Perth then. I just collapsed and my husband called an emergency doctor, who asked for an ambulance.

“I was taken to Perth Royal Infirmary, where they did a brain scan, and was rushed to Ninewells Hospital in Dundee for life-saving surgery.

“The brain surgeon who carried out the operation later said it was the worse case he had ever seen and he couldn’t repair the damage.

“They didn’t expect me to live. My family was told to expect the worst but hope for the best, and after I came round they told me that the best that could happen was that I would be put in a nursing home for the rest of my life.”

Elizabeth said the news left her “shell-shocked” but was determined to fight her condition, which left her paralysed on her left side and blind in one eye.

Following her operation, she spent a year in intensive care at Ninewells, and was then transferred to the brain injury rehabilitation unit at the Royal Victoria Hospital in Dundee, where she spent another year.

As she was still too poorly to go home, she then moved to a nursing home in Forfar, before coming to Rosyth in 2004 to undertake a two-year intensive rehabilitation course, from which she was discharged 18 months ago.

She said, “I had to learn all my basic living skills all over again – walking, talking, looking after myself.

“It was a struggle physically and emotionally very draining.

“Rehab was very painful and stressful for me but I never thought of giving up because that would have meant giving in.

“I felt very frustrated because I couldn’t do a lot of things, and impatient because progress was very slow and I wanted to get things done quicker than I was able to, but not getting better was never an option.” …..

Go here for the rest of the story.