Friday, October 27, 2006
Tuesday, October 24, 2006
Public Opinion: You are v-e-r-y tired. . . . You will believe everything I say. . . . Just keep your eye on President Bush's sinking polls. . . . Pay no attention to that low jobless rate . . . or the shrinking budget deficit . . . or the record Dow.
That, it seems, is the spell that's again been cast over a strangely receptive public as the Nov. 7 election nears. Despite an economic boom that's nothing short of amazing, especially given the obstacles it's had to overcome, many Americans still think we're on the verge of recession. Or at least that's what some polls say.
Why the disconnect? We keep scratching our heads. Beyond the grumbling over gas prices and some concern about what lies ahead in the war on terror, the only thing we can come up with is the unremittingly negative coverage the economy gets in the mainstream media.
You'd think that after a while people would put two and two together — that if things are pretty good for them and most people they know, the economy itself must be pretty good, despite what they read in the papers or hear on TV.
How do we know there's a disconnect? Because we see it in our own polling. When we ask Americans about their own financial situations, they're upbeat. When we ask what they think of the economy in general, the response is much less bullish.
In our October survey, the personal finance index stood at 60.6 — well above the 50 level that separates optimism from pessimism. Our overall economic optimism index registered only 52.4.
Some might say: How about the lower-income people who supposedly are falling further and further behind, or the middle class that's forever being "squeezed"? Well, as the accompanying charts show, they too are positive about their own situations but have their doubts about the rest of us.
This "cognitive dissonance" tends to be more pronounced at election time, perhaps because that's when coverage tends to get more biased. Examples from past election cycles abound.
In 2004, when the Bush-Kerry race was heating up, we couldn't help notice all the stories about trouble in the Midwest, and especially in key manufacturing states like Ohio, where the recovery that began two years earlier was said to be a no-show.
That's funny, we thought at the time. Data showed the factory sector expanding for the 12th month in a row and employment at a 31-year high. But with Bush in office and John Kerry polling well, the media weren't about to let facts get in the way of a good woe-is-us tale.
It was just the opposite in 2000, when Bush and Dick Cheney were campaigning to replace Bill Clinton and Al Gore, and had the nerve to point out the economy seemed to be slowing. Never mind the data indicated as much, or that stocks had been signaling a downturn since they topped that spring.
Eight years earlier, when George Bush Sr. was in the White House, and Clinton, Gore and 90% of the national media wanted him out, it was all about "the economy, stupid." Though we were in the 18th month of expansion, and activity in the latest quarter was the strongest in three years, 92% of stories written about the economy in that stretch were negative.
The negative coverage dried up as soon as Clinton and Gore were elected. Only 14% of stories in November 1992 were negative vs. 90% the month before.
In 2006? Once again, there's no shortage of anecdotal evidence. Typical was the one we cited last week, when both CBS and CNN took the best piece of economic news in a long time — the plunge in gas prices — and turned it into an election-year conspiracy of George Bush and Big Oil.
For fresh empirical evidence, the Business & Media Institute, admittedly a right-leaning group that audits coverage of the free enterprise system, just released a study of how the TV networks covered what was a strong economy in the 12 months ended in July. Among its findings:
• More than twice as many stories and briefs focused on negative aspects of the economy (62%) vs. positive (31%). "News broadcasts dwelled on one prospective cataclysm after another, yet each time the economy continued unfazed," BMI said.
• Bad news was stressed on all three networks (CBS, NBC and ABC) and appeared in full-length stories twice as often as in shorter items.
• Ordinary people and businessmen whom reporters used to underscore negative stories outnumbered those telling positive stories by a 3-to-1 ratio.
• CBS' coverage was easily the most slanted. More than 80% of its full-length stories on its "Evening News" delivered a negative view of the economy.
• Generally speaking, "the U.S. economy has been depicted as one major event away from collapse on all three evening news shows."
Sunday, October 15, 2006
Well, I made the announcement this morning during worship services, so I think its only right to make it here also. Come next July or August, I will be a Windhamite no longer. Its time to move back home and take care of things around the farm. This is a move that I’ve been considering since my Dad passed away in late 2004.
I’ve never really explained the feelings that I have attached to the farm down in Holmes County. Most folks know I grew up in Walnut Creek surrounded by the largest settlement of Amish in the world. It has been an endless conversation starter time and time again. You’ll remember how torn I was when it came to the Bombers game against my alma mater Hiland Hawks in basketball last year. The farm that my family owns is on the other side of the county. My grandparents lived there for years, Dad and Mom moved in a few years before discovering Dad’s cancer, and I hope to live there for a good long while. It was a place that I spent weeks of each summer as a kid playing, scouting in the woods, swimming in the pond, building dams in the creek, and so many other things that could possibly get me in trouble if Grandpa was still around. He never did find half of his tools thanks to my cousin and I.
There’s so much more involved in the move that I’m at a loss to really explain it. I’ve come back into contact with two people that I really care about, but haven’t talked to in years. That was just very weird and unexpected, but I’m really happy that it did. They remind me of home. Mom has been talking about us moving down for over a year. My sister has been pestering me off and on. Its something that I’ve always wanted.
So I think now is the time.
There’s a lot to button up before I leave. The kids need to finish the school year, I don’t like the thought of pulling them out in the middle of their studies. Plus, I’m going to have to get used to sending them to a school in the West Holmes School District. Sorry Brandy and April, that’s just never going to be quite right. Ugh…Knights. There are a few things at church that I’d like to finish, but I have little control over a lot of things. I’d love to stick around here until the next election cycle in 2008, I think its going to be very interesting. Don’t worry though, if anything strikes my fancy in the next few months, I’ll say something. We do have a tax issue to be voting upon.
Overall, I just want to say that I’ve enjoyed living here. Windham is in no way an idyllic town or anything, but the people here are real, and many truly care for the overall well-being of people, even though we don’t always agree what that well-being specifically is. I’ll…kinda…sorta…miss it ‘round here.
But its still at least 8–9 months away.
If anyone ever wants to contact me directly, my email address is firstname.lastname@example.org or call at 330–984–3053. Whoohoo! Spam! Whee!
Wednesday, October 11, 2006
Blatantly stolen from Captain’s Quarters
Bill Clinton got elected on the James Carville slogan, "It's the economy, stupid." Fourteen years later, it's the media playing stupid, as a roaring economy has been treated with more secrecy than national-security programs by newspapers and television news channels. Michael Barone points out the hypocrisy:The Labor Department Friday announced that the number of jobs increased between April 2005 and March 2006 not by 5.8 million but by 6.6 million. As an editorial in the Wall Street Journal notes, "That's a lot more than a rounding error, more than the entire number of workers in the state of New Hampshire. What's going on here?" The most plausible explanation, advanced by the Journal and by the Hudson Institute's Diana Furchgott-Roth in the New York Sun, is that lots more jobs are being created by small businesses and individuals going into business for themselves than government statisticians can keep track of. Newspaper reports on the number of jobs usually focus on the Labor Department's business establishment survey. But over the past few years, the Labor Department's household survey has consistently shown more job growth than the business establishment survey. The likely explanation: The business establishment survey misses jobs created by new businesses. Our government statistical agencies do an excellent job. But statistics designed to measure the economy of yesterday have a hard time reflecting the economy of tomorrow.
The federal budget deficit has been cut in half in three years, three years faster than George W. Bush called for. Why? Tax receipts were up 5.5 percent in FY 2004, 14.5 percent in FY 2005, and 11.7 percent in FY 2006. That's up 34.9 percent in three years. And that's after the 2003 tax cuts. When you cut taxes, you get more economic activity, and when you get more economic activity, the government with a tax system that is still decidedly progressive gets more revenue.
The bottom line: The private-sector economy is much more robust and creative than mainstream media would have you believe.
What? Your newspaper hasn't told you about the massive addition of jobs since the Bush tax cuts? Perhaps they've mentioned the new historical highs for the Dow Jones index. No? How about that falling deficit, driven by a huge boost in tax revenues caused by record employment and increased profits (and therefore taxes) in the private sector? Page C-17, you say?
What a shock in a midterm election season!
When the last labor report came out, many people pointed to the small job growth as a point of criticism for the Bush administration. However, with unemployment at 4.6%, we're approaching the point where there aren't many left to employ. At a certain point, the unemployment figure reflects transitional status and not joblessness of any significant length. As Barone notes, it also might reflect the effect of new investment in small businesses, which do not report employment as rapidly as corporations and which created the 800,000 shortfall in the new-job count the BLS just corrected.
If critics want to see more jobs get created, then they should promote the freeing of capital for investment into the economy. Raising taxes will have the opposite effect, something George H. W. Bush found out the hard way in 1990.
Tuesday, October 03, 2006
Who reads USA Today anymore? Well, maybe we should have read this.
By Kevin McCoy, USA TODAYAmericans of every income have benefited from a drop in federal income tax rates as Bush administration tax cuts enacted since 2000 took effect, an independent analysis of newly released IRS data shows.
But those earning $75,000 to $500,000 are shouldering a larger share of total taxes paid as millions more of them earn higher incomes and get hit with the Alternative Minimum Tax, the analysis also found.
The review by the Tax Foundation, a non-partisan research group that favors low taxes, provides one of the first detailed looks at the impact of federal tax changes phased in between 2000 and 2004.
Alluding to the political debate that often surrounds tax issues, Gerald Prante, a Tax Foundation economist, said, "It is true that in dollar amounts the rich have gained the most. But everybody's tax rates have fallen."
The analysis showed, for example, that a taxpayer who earned $35,000 in 2000 would have paid 8.54% of that income — $2,989 after credits — in federal taxes. In 2004, federal taxes would have accounted for 5.12% of that taxpayer's annual income, or $1,792. That represents a 40% decrease in tax burden.
At the higher end of the income brackets, a $1.75 million earner would have paid $513,625 in 2000 federal taxes, when the rate for that earning bracket was 29.35%. Four years later, when the rate dropped to 25%, that earner would have paid $437,500. That represents a 14.8% cut in tax burden, the analysis shows.
Millions of upper-middle and moderately high-income earners also benefited from tax rate cuts. But the analysis shows their savings was limited by the Alternative Minimum Tax, which eliminates some deductions and credits they could otherwise claim on federal tax returns. The levy particularly hits those whose high state and local taxes become ineligible for federal tax deductions.
For instance, taxpayers who earned between $100,000 and $200,000 in 2004 paid 22.5% of all federal taxes, up from 19.4% four years earlier. Those who earned between $200,000 and $500,000 in 2004 paid 17.9% of all federal taxes, up from 15.4% in 2000, the analysis showed.
Prante said the federal government "cut ordinary income tax rates but left AMT alone. So the middle range (of taxpayers) ended up getting less of a reduction."
The Tax Foundation also found that:
• Millions of lower-income Americans — those earning $25,000 annually or less — have been taken off the federal tax rolls. In 2000, roughly 29 million tax returns had no federal tax owed. Four years later, the number rose to about 43 million returns.
The increase resulted from the doubling of the child tax credit from $500 to $1,000, as well as the Earned Income Tax Credit, a federal benefit program for low-income workers.
• Income for the highest-earning Americans dropped sharply from 2000 to 2002, following the end of the bull stock market of the late 1990s, then grew rapidly from 2002 to 2004 as the economy recovered.