Wednesday, January 14, 2004

Economic Smoke & Mirrors FEATURED ARTICLES - US stocks, dollar drop, bonds fly on weak jobs data, By Daniel Grebler, Reuters - Global fears as US goes into the red, By Matt Wade, The Sydney Morning Herald - As Economy Revs Up, Democrats Shift Rhetorical Gears, By Jonathan Weisman, Washington Post - The Awful Truth, by Paul Krugman, New York Times QUOTE OF THE DAY "The credentials of the critics just keep getting better." - - Paul Krugman (From today's RHINO'S BOTTOM LINE) KNOW YOUR HISTORY - JANUARY 14th 1966 -- March on Atlanta to protest ouster of Julian Bond, African American pacifist, from Georgia House of Representatives, after his endorsement of SNCC statement critical of US involvement in Vietnam; Martin Luther King, Jr. spoke. 1967 -- Gathering of the Tribes for the First Human Be-In at San Francisco's Golden Gate Park, specifically in the polo fields. Probably 20,000 come to play, though Emmett Grogan says as many as 300,000 in his book Ringolevio. Familiar names include Michael McClure, Gary Snyder, & Lenore Kandel. Sponsored by Haight Independent Proprietors (H.I.P.) & the Communication Co. Among the performers are The Grateful Dead & The Jefferson Airplane. Speakers also include Jerry Rubin, Allen Ginsberg, Lawrence Ferlinghetti & Timothy Leary. Participants were urged to bring food to share, flowers, beads, costumes, feathers, bells, cymbals & flags. The Be-In was produced by Michael Bowen. RHINO HERE: The NY Times reports this morning that the shrub gang wants to spend 1.5 Billion of your taxpayer dollars on teaching low income couples how to be better husbands & wives. No doubt gays need not apply. You think those bucks could be better spent? Apparently the gang thinks this 1.5 BIL initiative is, QUOTE, "relatively inexpensive but politically potent" UNQUOTE. Rhino translates that to, "a cheap price to pay for the Christian Fundamentalist vote." Bush Plans $1.5 Billion Drive for Promotion of Marriage, NY Times, 1/14/04 http://www.nytimes.com/2004/01/14/politics/campaigns/14MARR.html?th Meanwhile scores of families across the country whose husbands & wives have lost their jobs are struggling for health care & groceries. But how could that be when so many economic indicators are doing so well, proving the economy is on the rebound? Contrary to what the tri-letter news nets are telling us, the U.S. economy is so bad, it's scaring hell out of the rest of the world. After the first 2 articles below about the economy comes a Washington Post piece which cites those positive economic indicators as the cause of the Democratic presidential contenders backing away from bad mouthing the economy. But if you read past the first half of the article, you get to where the authors admit that in spite of the beltway promo, the economy sucks.  Ahh those shrubies & their media cheerleaders are so good at smoke & mirrors. Then today's RHINO'S BOTTOM LINE is by economist & NY Times columnist Paul Krugman, dealing with aspects of the economy dealt with by Paul O'Neill in the new book, "The Price of Loyalty." US stocks, dollar drop, bonds fly on weak jobs data By Daniel Grebler, Reuters News Service, Fri 1/9/04 U.S. stocks fell and the dollar sank to a new low against the euro on Friday, slammed by an unexpectedly weak December jobs report that showed the nascent U.S. recovery to be a jobless one. The news propelled U.S. Treasuries sharply higher as investors reconsidered the outlook for both the economy and the Federal Reserve's next interest-rate move. Oil prices hit new post-Iraq war highs as cold weather in the United States combined with low crude oil stocks. Silver ended near a six-year high in New York. U.S. companies hired just 1,000 workers in December, the government said, sharply below Wall Street forecasts of a jump of at least 130,000. The unemployment rate fell in December to 5.7 percent, its lowest level in over a year, from 5.9 percent in November. But the decline in December was mainly because people dropped out of the work force. The report suggested a gap between recent upbeat economic news and reality on Main Street, showing the recovery has yet to translate into sustained job growth. It also suggested that the stimulus from last year's tax cuts might be fleeting. "The data are a disaster for the recovery story," said Dominic Konstam, head of interest-rate strategy at CSFB. "It suggests that once the stimulus to consumption fades, there won't be the hiring there to replace it." POSTED AT: Weak Jobs Global fears as US goes into the red By Matt Wade, The Sydney Morning Herald, January 9, 2004 The huge black hole in the US budget and the country's ballooning trade deficit are threatening to push up interest rates across the globe and destabilise the international economy, one of the world's most powerful financial institutions has warned. The budget deficit - which has swung from a healthy surplus in 2000 to a forecast blowout of more than $US400 billion ($521.2 billion) this year - was a "significant risk" for the rest of the world, the International Monetary Fund said yesterday. "Sustained fiscal deficits lower national savings in the United States and will eventually raise real interest rates both in the United States and abroad," said Charles Collyns, deputy director of its western hemisphere department. Economists said the warning was important for Australia, as local market interest rates are closely linked to those in the US. The fund's warning also echoes concerns raised by the Australian Treasury in its most recent economic assessment last month when it said the US's "twin deficits" - its budget and current account blowouts - were a risk to global economic stability, and therefore posed a threat to the Australia's economic outlook... http://smh.com.au/articles/2004/01/08/1073437412930.html As Economy Revs Up, Democrats Shift Rhetorical Gears By Jonathan Weisman, Washington Post, January 8, 2004 ...But even nationally, there are fertile economic grounds to plow, if the message is crafted correctly, Democrats say. Despite surging economic growth and stock prices, weekly wages rose only $1.48 last year, in inflation-adjusted terms, according to the Labor Department. Hourly wages rose 2 cents. Employers added 194,000 new workers between September and November, but beneath that broad number, job struggles continue. From November 2002 to November 2003, 41,000 more Americans took multiple jobs, bringing that total to 7.3 million. By November, nearly 5 million Americans said they were working part time because they could not find full-time work, an increase of 604,000 from a year before and 97,000 in just a month. The unemployment rate slipped from 6 percent in October to 5.9 percent in November. But add those involuntary part-time workers and people not actively looking for work but wanting a job, and the picture changes. The "labor underutilization" rate rose in November, to 9.7 percent, from 9.5 percent in October and 9.4 percent the year before.  "Those people on Wall Street, on cable news, the financial analysts are trying to tell people they're doing better," Clark said. "But people across America are struggling right now."... IT'S ALL AT: http://www.washingtonpost.com/wp-dyn/articles/A63155-2004Jan7.html 7:45:04 AM    comment

RHINO'S BOTTOM LINE - The Awful Truth The Awful Truth by Paul Krugman, New York Times, January 13, 2004 People are saying terrible things about George Bush. They say that his officials weren't sincere about pledges to balance the budget. They say that the planning for an invasion of Iraq began seven months before 9/11, that there was never any good evidence that Iraq was a threat and that the war actually undermined the fight against terrorism. But these irrational Bush haters are body-piercing, Hollywood-loving, left-wing freaks who should go back where they came from: the executive offices of Alcoa, and the halls of the Army War College. I was one of the few commentators who didn't celebrate Paul O'Neill's appointment as Treasury secretary. And I couldn't understand why, if Mr. O'Neill was the principled man his friends described, he didn't resign early from an administration that was clearly anything but honest. But now he's showing the courage I missed back then, by giving us an invaluable, scathing insider's picture of the Bush administration. Ron Suskind's new book "The Price of Loyalty" is based largely on interviews with and materials supplied by Mr. O'Neill. It portrays an administration in which political considerations - satisfying "the base" - trump policy analysis on every issue, from tax cuts to international trade policy and global warming. The money quote may be Dick Cheney's blithe declaration that "Reagan proved deficits don't matter." But there are many other revelations. One is that Mr. O'Neill and Alan Greenspan knew that it was a mistake to lock in huge tax cuts based on questionable projections of future surpluses. In May 2001 Mr. Greenspan gloomily told Mr. O'Neill that because the first Bush tax cut didn't include triggers - it went forward regardless of how the budget turned out - it was "irresponsible fiscal policy." This was a time when critics of the tax cut were ridiculed for saying exactly the same thing. Another is that Mr. Bush, who declared in the 2000 campaign that "the vast majority of my tax cuts go to the bottom end of the spectrum," knew that this wasn't true. He worried that eliminating taxes on dividends would benefit only "top-rate people," asking his advisers, "Didn't we already give them a break at the top?" Most startling of all, Donald Rumsfeld pushed the idea of regime change in Iraq as a way to transform the Middle East at a National Security Council meeting in February 2001. There's much more in Mr. Suskind's book. All of it will dismay those who still want to believe that our leaders are wise and good. The question is whether this book will open the eyes of those who think that anyone who criticizes the tax cuts is a wild-eyed leftist, and that anyone who says the administration hyped the threat from Iraq is a conspiracy theorist. The point is that the credentials of the critics just keep getting better. .. "RHINO'S BLOG" is the responsibility of Gary Rhine. (rhino@kifaru.com) Feedback, and requests to be added or deleted from the list are encouraged. SEARCH BLOG ARCHIVES / SURF RHINO'S LINKS, AT: http://www.rhinosblog.info RHINO'S OTHER WEB SITES: http://www.dreamcatchers.org (INDIGENOUS ASSISTANCE & INTERCULTURAL DIALOG) http://www.kifaru.com (NATIVE AMERICAN RELATIONS VIDEO DOCUMENTARIES) Articles are reprinted under Fair Use Doctrine of international copyright law. http://www4.law.cornell.edu/uscode/17/107.html All copyrights belong to original publisher. Tell a friend about Rhino's Blog 6:28:14 AM    comment

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