Now before you get start reading this post, I did not include all the different things that were being done to fix the economy or the many positive numbers that were coming out of 2000. I just focused on signs that the economy was slowing down and Bush’s plan to fix it. I looked at New York Times articles from June 2000 to Inauguration Day in 2001.
This is a blatant attempt to fortify liberals with ammunition against the Bush revisionists who cannot and will not take responsibility for the Recession of 2001. Yes, the signs were there that a slow down was imminent, even occurring in different segments of the economy. However, the job of the President and his administration is to mitigate those economic slow downs, so they don’t turn into a recession.
Economies are cyclic, but the economy does not have to go into a recession as part of a slow down. Just look at the administrations of Kennedy, Johnson and Clinton to see years without recessions.
The question I come away with all of this is how much notice did the Bush Campaign and then Transition Team need in order to move the economy in the correct direction? I believe eight months is enough time.
Two economic reports released yesterday pointed to a further slowdown in the economy, with growth in construction and manufacturing slackening this spring.
Sales in stores open more than a year, a key figure for measuring the health of the retail industry, rose by only 2.6 percent in June compared with figures in the period a year earlier. Analysts said the numbers were in line with expectations that the economy is losing steam. Consumers are spending less at all types of stores, ranging from specialty apparel stores like the Gap to discount stores like Kmart.
Mr. Greenspan will almost certainly note that the economy slowed in the second quarter from its blistering winter pace. He has no choice: the statistics are fairly convincing. The argument that saw the Fed through six interest-rate increases over the past year is temporarily unavailable. The economy no longer appears to be growing so rapidly that the demand for goods and services exceeds the supply, threatening faster inflation.
The first drop in orders in 19 months restrained manufacturing in July but consumer spending rebounded in June, two reports showed today.
The National Association of Purchasing Management said that its factory index was unchanged last month at 51.8, the lowest level since January 1999. The index for new orders fell below 50 — meaning that more companies reported a drop than reported an increase — for the first time since December 1998, when recessions in many Asian countries held down demand for American products.
A separate report from the Commerce Department showed consumer spending rose 0.5 percent in June after rising 0.3 percent in May. While that was the largest gain in three months, higher energy costs accounted for most of the rise, analysts said. Incomes rose 0.4 percent after an increase of 0.3 percent in May.
In another Commerce Department report, spending on construction of houses and apartments in June registered the largest drop in five years.
With economic data pointing to a slowdown, it seems more and more evident that the Federal Reserve Board is piloting the economy to the soft landing that everyone has hoped for.
”We are in an economic slowdown,” said Mickey Levy, chief economist at Bank of America. ”Employers are clearly holding back on hiring, and adding hours much more slowly for those on their payrolls.”
Nobody cared about this earnings illusion while stock prices were rocketing. Now, growth rates are slowing and investors are dumping their former darlings. The Nasdaq composite index lost 8.5 percent last week and is down 17.41 percent for the year.
Gov. George W. Bush plunged into the final three-week stretch of the presidential race today, arguing that Vice President Al Gore would endanger the nation’s prosperity and using his own pledge of tax cutting to rally his party’s base.
Start with the perennial problem-in-waiting: an economy that’s been running on eight cylinders for longer than any in history. It could begin running on, say, just four. Or, as one of President Clinton’s former top economic officials puts it: ”Not a recession. Just something that, after all this prosperity, feels like a recession.”
The signs are already there. The stock market’s fall to Earth has made free-spending consumers feel a little less wealthy. Out here on the frontier of the new economy, a lot of E-entrepreneurs are suddenly sending resumes to old-line companies that compensate their employees with a regular salary, not stock options. Detroit is sitting on car inventories so big that eight of the country’s 55 auto plants are taking a weeklong holiday.
”The bottom line really is we’ve got a tech wreck in the stock market that isn’t necessarily over,” said Ed Yardeni, chief investment strategist of Deutsche Bank. Alex Berenson.
If a bad economy can break a president, then this is not the moment to become president of the United States. The economy is clearly faltering, on all fronts. What we are experiencing is no brief dip, to be followed soon by a fresh surge of activity. America faces a dry period — long enough, perhaps, to taint the next chief of state, whether he is Al Gore or George W. Bush.
After months in which investors have become increasingly pessimistic — and after Gov. George W. Bush and his running mate, Dick Cheney, publicly raised the possibility of an economic downturn ahead — Mr. Greenspan’s comments seemed intended to reassure the markets and the country that the Fed would step in as needed to keep the 10-year-old expansion going.
George W. Bush said today that he was concerned about a ”possible slowdown” in the economy and called the change in the economic outlook an argument for going forward next year with his campaign proposal for a sweeping, $1.3 trillion tax cut across a decade.
It looks like George W. Bush is going to get lucky again.
The amazing United States economy no longer looks so amazing. Economic growth has plummeted, from 5.6 percent in the second quarter to 2.7 percent in the third, and companies from Microsoft to U.P.S. have warned that the slowdown is likely to lower their profits.
With energy prices high, stocks weak and a sudden slowdown in demand for personal computers, some analysts predict that the economy could enter a recession as early as the first quarter of next year, shrinking for the first time in a decade.
”We’re slowing down, and we’re slowing really hard,” said Doug Cliggott, American equity strategist for J. P. Morgan.
It’s all just perfect — if you’re the president-elect. First off, if a recession hits just as he takes office, he can blame it on President Clinton.
The economy that George W. Bush will inherit when he takes the oath of office as president next month remains fundamentally solid, with low unemployment, relatively stable inflation, rising wages and the benefits of continued advances in technology.
Mr. Bush has an ambitious agenda that he intends to pursue right out of the blocks, including a package of tax cuts that he says could give the economy a boost and keep the slowdown from becoming a recession.
President-elect George W. Bush has been warning for the last two weeks that there may be a downturn just ahead, and that his proposal for a $1.3 trillion tax cut over the next decade is just the prescription for a faltering economy. Mr. Bush and his team have cited rising energy prices in particular as a cause for concern.
George Bush: There’s a reason why the Treasury Department is right next to the White House. It’s because the secretary of treasury and the president must work closely for the good of the American people. The secretary of treasury is the chief financial officer of our nation, the successor to Alexander Hamilton. This job is obviously always important for any administration. But I think it’s incredibly important as we head into the 21st century. The world is more connected than ever. Our economy and the lives of every American depend upon our standing in the world.
Secondly, our economy is showing warning signs of a possible slowdown. And so it was incredibly important for me to find somebody who had vast experience, who is a steady hand, who, when he speaks, speaks with authority and conviction and knowledge. I found such a man in Paul O’Neill.
Mr. Bush said Thursday that he was simply being a realist in considering the dangers ahead, ”and if there are warning signs on the horizon, we need to pay attention to them.”
In a generally optimistic forecast that stands in contrast to the increasing gloom of many private analysts, the White House’s chief economist said the economy remained fundamentally sound and should continue to benefit from three factors that drove the long expansion of the 1990’s: improvements in the growth rate of productivity, better business management and a shift from federal budget deficits to surpluses.
Mr. Baily said one of the keys to keeping the economy going would be to stick to a path of using the budget surplus to pay down the national debt — another way of warning the incoming Bush administration not to push for a tax cut so big that it would risk a return to deficits.
”This is not the time to abandon fiscal discipline in favor of large tax cuts,” he said. Mr. Bush’s team has said the surplus should be large enough to accommodate both a substantial tax cut and debt reduction, and that the stimulus of a tax cut would help kick-start the economy if it proves to be stalling.
Bush: Here’s what I am willing to tell you. I am willing to tell you that to the extent that the entire package gets passed, I will work with Congress. I want the entire package passed. And I’m answering all kinds of questions about speeding up, slowing down. Those are all tactical decisions. The key is that the economic recovery plan be implemented.
To his credit, the nominee for treasury secretary has been a less than enthusiastic team player. In his Senate hearing, Paul O’Neill came remarkably close to damning the whole sales pitch with faint praise. ”I’m not going to make a huge case that this is the investment we need to make sure we don’t go into a recession,” he conceded. ”But I don’t know why we wouldn’t want a tax cut now. It wouldn’t hurt.” The good news here is not that Mr. O’Neill knows that his boss is making a bogus argument; Mr. Bush’s inner circle knows that too. It is that the new treasury chief has some scruples about saying things that he knows to be untrue. I wonder how long that will last.