The Command Post - 2004 US Presidential Election - A Collection of This Week's Economic News

August 27, 2004

| A Collection of This Week's Economic News

From the New York Times and the L.A. Times:

U.S. Economy Grows at Slower Pace Than Expected

The U.S. economy, struggling under the weight of a bloated trade deficit, grew at a relatively modest 2.8 percent annual rate in the second quarter, a slower pace of expansion than previously thought. The new reading on gross domestic product (GDP) issued by the Commerce Department Friday furnished fresh evidence that the business recovery hit a rut in the spring and early summer. The growth rate was weaker than the 3 percent figure first estimated a month ago and showed that the economy, which had been moving along at a decent clip, lost considerable momentum in the April-to-June quarter. The economy had grown at a brisk 4.5 percent pace in the first three months of 2004. Gross domestic product measures the value of all goods and services produced within the United States and is considered the broadest barometer of the economy’s fitness.
The revised GDP figure for the second quarter, however, is slightly better than the 2.7 percent growth rate that some economists had forecast. The latest snapshot of the economic activity comes as President Bush gets geared up for the Republican convention, and the presidential election is just over two months away.

More Americans Were Uninsured and Poor in 2003, Census Finds

The ranks of the poor and those without health insurance grew in 2003 for the third straight year, the government reported on Thursday, in a sign of the lingering pain being caused by a long slump in the job markets. Those trends, spelled out by the United States Census Bureau, signaled a clear shift in the way the 2001 recession and its aftermath have spread across the country. The economy’s troubles, which first affected high-income families even more than the middle class and poor, have recently hurt families at the bottom and in the middle significantly more than those at the top. Median household income rose at about the same rate as inflation last year after three years of relative declines, according to the report. But the disparity in incomes between the rich and poor grew after having fallen in 2002. Pay did not keep pace with inflation in the South, already the nation’s poorest region, in cities, or among immigrants. And the wage gap between men and women widened for the first time in four years. Poverty rose most sharply among single-parent families last year. Health-insurance coverage fell only for families with annual income of less than $75,000.

Healthcare Costs Expected to Rise

Workers will probably pay more for benefits as employers budget less than the likely increase.

Employers are facing continued double-digit increases in healthcare costs in 2005 and probably will require their workers to pay a greater share of the bill, according to a survey of more than 900 firms. The survey, released Thursday by Mercer Human Resource Consulting, found that employers expected healthcare costs to rise 12.9% on average next year if they left benefits unchanged. But companies that participated in the survey, both those that buy insurance and firms that are self-insured, are budgeting an average increase of only 9.6% in their healthcare spending. The firms are likely to shift much of the difference to employees in the form of higher required contributions and co-payments, or by limiting their choice of insurance plans, the report said. That would mark the third consecutive year that employers have shifted a portion of healthcare costs to workers in an effort to keep pace with rapidly rising expenses. Mercer said employers forecast a 13% increase in health costs in 2004 and ended up paying about 10% more, chiefly because employees were asked to pick up more of the tab. Past cost shifting, though, has done little to solve the underlying problems driving up the price of healthcare, said Blaine Bos, a Minneapolis-based healthcare consultant for Mercer.

Greenspan Warns on Baby Boomer Benefits

Federal Reserve Chairman Alan Greenspan said Friday that the country will face “abrupt and painful” choices if Congress does not move quickly to trim the Social Security and Medicare benefits that have been promised to the baby boom generation. Returning to a politically explosive issue that he has addressed a number of times this year, Greenspan said that it was wrong for the government to hold out the promise of more retirement benefits than it is capable of providing. He said this issue was particularly critical given the impending retirement of 77 million baby boomers born in the two decades after World War II. “As a nation, we owe it to our retirees to promise only the benefits that can be delivered,” Greenspan said in opening remarks to a two-day conference sponsored by the Federal Reserve Bank of Kansas City on the challenges posed by aging populations. “If we have promised more than our economy has the ability to deliver, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels,” Greenspan said. “If we delay, the adjustments could be abrupt and painful.” Greenspan, as he has done previously, suggested that possible changes would be raising the retirement age to receive full Social Security benefits, which currently is gradually increasing from 65 to 67.

Oil Rebounds After Iraq Pipeline Attack

LONDON (Reuters) - Oil prices rose on Friday as a sabotage attack on Iraqi oil infrastructure reignited concern about the reliability of crude exports from the country despite a peace deal to end an uprising in Najaf. U.S. crude climbed 37 cents to $43.47 a barrel, but remained around $6 below a record peak struck last Friday at $49.40 after a week of heavy losses. London’s Brent crude gained 37 cents to $40.70 a barrel. Prices have fallen 12 percent from last week’s peak as speculators took profits after the U.S. market failed to breach the $50 mark. Crude is still up nearly 40 percent since the turn of the year.

Posted by Todd Castleton at August 27, 2004 09:57 AM | TrackBack

Comments

This just Must be nothing more than Leftist Propaganda.

Why, just a few weeks ago we had Turned The Corner, and all was going to be well. Dubya assured us that was so, did he not?

Whatever is going on out there is the fault of the NoozeMeeja for reporting.

Right?

Posted by: Don at August 27, 2004 11:40 AM

“The [Media] can have a strong influence on the weak-minded. You will find it a powerful ally.”

I suggest you take a look at the Editorial page of today’s WSJ, or download a copy at Audible.com before buying into that load of crap you believe in. You should know damn well that statistics and polls can be construed to meet any political agenda.

My first thought regading the poverty/uninsured numbers is this: did the Census data take into account the percentage growth or just the nominal growth of those fitting the definition of impoverished and uninsured? I mean, even a complete moron understands that population growth is related to the nominal increase of these stats. Or maybe I’m being too kind?

Second of all, what are the definitions of these terms? Well, obviously unbeknownst to your jaded liberal minds, the “uninsured” number includes all uninsured people - regardless of their income and regardless if they’re eligible to enroll in medicare. Maybe you misinformed socialists should do a better job letting the uninsured know they’re friggin eligible to be insured by the government instead of just deciding to throw more money at a problem. Perhaps the lazy government bureaucrats don’t have an incentive to inform the public of their eligibilty? Well, Don, that’s what happens in a socialist society.

Finally, Don, what is Kerry’s solution to the economic problems we’re having? I mean, I don’t know about you, but I’ve studied Keynesian Economics and I’m also well versed in Monetary Theory. Anyone, with any sort of economic background, knows that the current fiscal and monetary policies are textbook. Period. Creating another investment wasting government program to suck funds right out of our 4.8% GDP isn’t going to help a damn thing. Rolling back the tax cuts on dividends to help screw the creation of investment capital once more, isn’t going to help in the short-run either.

If you liberals want to debate economic policy, bring it on.

Posted by: jackhammer at August 27, 2004 01:35 PM

The following links show that this increasing number of uninsured goes back several years and that neither Clinton nor Bush have really done anything about it for a number of reasons —- political. process and policy-wise. The article following was written in 1998 and forecast that should the then very hot economy cool down (which it did in 1999-2002), the rates for uninsured would rise. A good prediction. Also:

“By 1996, the terminal year of the Harvard study, the number of Americans going bare had increased from 33.4 million in 1989 to 41.7 million, leaving by that time 15.6 percent of the population-almost 1 in 6-out in the cold. “Rising numbers of uninsured during this period of prosperity … may portend even steeper increases should the economic situation cool.” Strongly implied here was a corollary: There is no reason to expect that the rate of increase will abate if good times continue.”

The link for the whole document is:
http://www.thirdworldtraveler.com/Health/GoingBare.html

Another apparently objective report on this by Consumer Reports is found in at: http://www.consumerreports.org/main/content/display_report.jsp?FOLDER%3C%3Efolder_id=372211

This was a January 2004 report and reflects equally poorly on the Bush Administration as the later did on the Clinton efforts. A healty dose of poor Congressional activity is found in both, too.

Bottom line… these numbers show that little if anything has been done by either party while in the White House. So far I’ve yet to see anything substantive by Kerry or Bush on fixing this. Dodging the facts or blaming the incumbent does nothing productive.

It’ll be interesting to see if the RNC proposes a fix at the convention or tries to preempt the Dems on this. As a conservative I have my own take on how to fix this, but I’m not running for the White House to do so. I’ll not pontificate on a solution but prefer to hear from the “professionals” on their solutions.

Don, personally, I am a little tired of the kindergarden-like “nah-ta-nah-ta-naah-da” comments such as you frequently provide on serious matters like this. Can you not be more mature and less condescending? And ditto for the others who come back with equally non-sensical personal attacks instead meaningful dialogue because Don has hit a sore spot or knows how to stir the pot. Come on everyone, let’s grow up a little here.

No doubt the Bush supporters wince when these numbers came out. Similarly the Democrats do not want to talk much about Kerry’s voting record or his tour with Gov. Dukais. For those who relish in bad news for America becuase it hurts the other side there is not much that can be said for having such self-serving attitudes. For the Left and Dems, pointing out failures by the Bush Administration is okay as long as you can show that Kerry has a fix ready to roll out if elected. The Dems have a built-in advantage in these and similar economic issues in that a majority of the public rightly or wrongly believe that this is an area best done by the Democrats. Now is the time to state what that solution might be with definitive actions planned and substantiated and nail this down as fait accompli. I’ve yet to see anything but promises and wishful thinking. And that goes for the Republicans, too. If any supporter for either camp can not provide a easily understood fix, then don’t just rant and blame the other side. Put up or shut up… both sides! (And just tell me “Bush lied!” or “Kerry is no hero.” as the mantra response to all things.)

What is in the Democratic platform coming out of the DNC that also addressed this with a solution? Did they have the forsight to see these numbers coming out? I may missed it before now, but did any of Kerry’s convention speech address this directly or have any of the Dems’ talking heads predict it?

As for solving the issue itself, it looks like both parties have their work cut out for them and, to paraphrase Gen. Forrest, one of them must “get thar with the mostest the firstest”

Posted by: steve at August 27, 2004 02:56 PM

As to the poverty figures, I just can’t buy into them. I work in healthcare and we deal with uninsured patients daily. The government has turned this into a mess.

for example if someone is poor, as in having income below the fed stated threshold, their bills can be written off to a state administered program. NOw why not get them on medicaid? well because that program will not only look at income, but at assets as well.

So there’s poor, and then there’s poor, both definitions created by the government and both significantly different. Someone with an income from a trust fund could be considered poor if that income is below the so called poverty line but the trust funds themselves may be worth quite a bit.

So I’m not buying the poverty numbers, not a bit.

As to the **gasp** uninsured problem, I also believe that this is an artifact of persistent government meddling. All aspects of health care are highly regulated including heath insurance. This regulation drives up cost and drives out innovation, as a result we get what we have today.

Wanna fix this problem? it’s simple, show the bureau crats the door. I said it was simple, I didn’t say it was easy.

As to the complaints about Don, ah well, one learns to ignore the lengthy Dontifications.

Posted by: skip at August 27, 2004 03:36 PM

Like the old joke about the final NYT headline:

“World Ends: Women, Poor, Hardest Hit”

Posted by: DWC at August 27, 2004 04:24 PM

And what exactly does “poor” mean.

I lived in the southwest for many years. This was during the days when it was fashionable to “care” about the homeless. What most of the bleeding hearts who “cared” didn’t realize was that these people were homeless by choice.

So sure they’d take the three hots and cot and whatever else people who “care” cared to give them, but the root cause of homelessness would never be solved by the people who “care”. Just the dumbest thing I’ve ever seen.

so every time I hear some stastic about the uninsured, I smile and move on, dot org!!!

Posted by: skip at August 27, 2004 04:37 PM

Oh yeah, I am sure that most homeless are that way by choice. Who would want a house with a roof and heat after all ?? That has to be the dumbest statement I have seen on this blog in a long time.

Posted by: rdelephant at August 27, 2004 06:50 PM

elephant, Most homelessness can explained by 2 major factors - substance abuse and mental illness. While one is a national tragedy, the other is a purely personal disaster.

Do not assume that everyone wants what you want. That’s not the dumbest thing I’ve seen on the blogs, but it’s getting there. You’re projecting. Not everyone wants what you do. It not a lack of money puts people on the street, it’s behavior that bankrupts souls first, pockets second that dictates who lives on the street and who doesn’t. Most don’t CHOOSE to be homeless, but they CHOOSE lifestyles that put them there. Who’s fault?

I think the mentally ill need and deserve our help. What happens to them should shame every one of us. But I’ve worked in corrections and public welfare and am not about to accept responsibility for everyone on the street. You need to get out more. There are people who WANT to be homeless. I’ve met them.

Posted by: torpedo_eight at August 27, 2004 10:06 PM

Are there a few strange characters who want to be homeless, no doubt. But the vast majority, no way.

Posted by: rdelephant at August 28, 2004 10:25 AM