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Friday, July 29, 2005

The New York Times loses again 

Regular readers know that I love pointing out that on April 2 this year the New York Times declared that the U.S. dollar was headed down, "no matter what" owing to the Bush Administration's economic policies, and it has done very little but go up since then.

Less well-known is that the Times has also lost its shirt in the stock market. On April 16, during what proved to be an extremely ephemeral downdraft in the U.S. stock markets, the NYT ran a front page headline that blared "Stocks Plunge to Lowest Point Since Election." It was not clear at the time what the relationship was between the low level of the stock market in April and the election (since the market had bottomed some days before the election), but the Times purported to see one worthy of a front page headline.

Yesterday, the S&P and the Nasdaq hit their highest levels in the four years since the carefree days between the Clinton Administration and the onset of war on September 11. Imagine my surprise that this morning's New York Times not only does not mention this fact on the front page, but it is nowhere to be seen in all of Section A! It is almost as if the short-term performance of the financial markets has nothing to do with the Bush Administration.

11 Comments:

By Blogger Screwy Hoolie, at Fri Jul 29, 08:14:00 AM:

Those numbers are good news for investors, for employees, and for multinationals.

Funny we're not getting the Bush boom in the town of Brevard, NC where four manufacturing plants have closed in the last three years. Why? Big profits for the S&P companies.

Good stock market numbers don't necessarily translate into a healthy nation. Ask the Chinese.  

By Blogger Cardinalpark, at Fri Jul 29, 08:44:00 AM:

SH - what's your point? Many manufacturing facilities in the US are not competitive. Your 4 plants in Brevard...what do they do? And what does that have to do with the price of tea in China?

A healthy stock market is a clear signal of a healthy economy, which in turn signals a healthy country. Low unemployment and healthy per capita income lead to social stability.

And while China is still "unhealthy" in that it is not a free society, its people are better off today than they were under Mao, thanks to the economic liberalization that commenced under Deng.

Keep whining though. Herre comes the twin deficit whining...I can feel the response coming already.

Low rates and low taxes probably piss you off. Sorry. Once again, the empirical evidence proves out.  

By Anonymous Anonymous, at Fri Jul 29, 08:49:00 AM:

Tough to go from the macro to the micro... if we're losing jobs here, it's because, in spite of good economic news and assists to cashflow with low interest rates, people still want their goods for as low a price as they can find. Quality isn't as much a driver, since fashion and a short term view on things suggest it's worn out by the time the urge to use it wanes.

FWIW, I also live in NC, and have some intel on how lazy some of the manufacturing people have gotten. Slackers banging out on a WC claim, or some other faux work-related excuse to collect. I know it sounds like a broad brush, but people need to wise up - produce MORE for the buck, or lose the job to a place where people work more industriously, and for a ton less per hour. The cost of sales is Material, Labor and Overhead. When you accept that the O/H is a lot less elsewhere... you've got to figure how to compete via productivity. That, or tarriffs, which many don't want.

Who knows how long it'll be before our standard of living is brought down by exporting all of our jobs. Used to be only the manufacturing, but increasingly, it's taking our service sector jobs as well. Makes me think of Perot, and his "giant sucking sound" sound-byte.  

By Blogger Counter Trey, at Fri Jul 29, 10:51:00 AM:

SH
Blaming four plant closings in your town on big profits for the S&P companies is a non sequitur. Capital and labor flows to its most productive use. If your town's plants were productive, they would have profits, capital would pour in and their stock prices would rise. It’s better to ask how you can make your plants more profitable instead of blaming it on external factors.

The answer could very well be that these plants cannot be productive anymore. Then what do you do? You can subsidize them at the expense of the taxpaying consumer like Old Europe and suck the life out of the economy. Or, you can allow them to die so that capital and labor can move on to more productive enterprises. The US is the most robust economy in the world because we chose the latter a lot more often than the former.

As Cardinalpark pointed out, it is that freedom of movement of capital and labor that make an economy healthy. The Bush Administration has made a few bad choices w/r/t to that freedom with steel and sugar tariffs, but overall it has done an outstanding job and deserves the credit that the Gray Bitch has withheld.  

By Blogger james82, at Fri Jul 29, 12:34:00 PM:

Good points - I've come to admire economics late in life. Anyway, I came to post a comment to brag that I have not touched a NYT paper in 12 years.

One point rarely mentioned is that though the US loses old industries, it's the US that creates the new industries. So the world can eat our dust and take our crumbs. The new inventions, discoveries, innovations, cures, etc will be made in the US. But folks like SH would love to live in the USSR where you can drink vodka on the job, and being a doorman or a driver is prestigious because you can get some extra bologna.  

By Blogger Screwy Hoolie, at Sat Jul 30, 11:19:00 AM:

Many companies having record breaking profits are moving overseas anyway. Why? To make bigger profits. It's ridiculous to blame outsourcing on the "lazy American worker". What the hell is that?

The mills that closed were textiles, and they've gone to Mexico. They're not coming back.

I think that when corporations based in the U.S. primarily operated from the U.S., then a strong stock market was a sign of a healthy economy. But now it simply means that the companies have cut more costs and increased productivity...somewhere...

Blaming the American worker, though? Honestly.  

By Blogger james82, at Sat Jul 30, 12:19:00 PM:

I don't blame the American worked - I am one of them. But life/society is a dynamic thing, and workers have to roll with the punches. No one owes us a living. On the other hand, these multinationals that want to lose expensive American workers but keep American consumers are selfish and will likely reap their just deserts.  

By Blogger Opulent_J, at Tue Aug 02, 10:29:00 AM:

America is a wonderful place, and, for the most part, Americans love being American. For that reason, it is hard to put our patriotic tendencies aside and realize that outsourcing jobs is the best economical decision. It is the economic theory of specialization. If Mexico can produce textiles cheaper than America, let them do it. It is beneficial to Americans; we are able to use our labor in a more productive fashion and our clothing is less expensive. Just as someone else said in a previous comment, we have to roll with the punches.
I have another theory. As low-paying jobs leave this country, American workers are forced to become more educated and better trained. Thus, we have keep the jobs requiring expertise. It only makes sense that the jobs we keep pay better than the ones we sent overseas. The result, a higher standard of living for all.
Berkshire Hathaway, arguably one of the greatest companies in the world, was once a New England textile company. By the time the 1980's rolled around, Berkshire was unable to compete in the global textile market and was forced to close the textile division. Rather than sit around and complain at how unfair this cruel world is, Warren Buffett forged ahead. He built a dynamic company, an element that a company must have in order to remain a going concern.
The point of all this is: Change is going to take place; if the change is good, it will become the norm; if the change is bad, we will revert to the former.
If you are pissed off because a plant closed and you lost your job, use that energy to better yourself. Don't waste it on whining and blaming others for your problems. The Bush administration didn't cause you to lose your job, the CEO of the company whose plant was closed didn't cause you to lose your job. It is simply economics and there is nothing you can do to change economics. Therefore, your only course of action is to change yourself. Because, ultimately, you are the only one responsible for you well-being.  

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