Well. Duh!

[Schnazz]

I've heard a lot of people claim the theory that the economy is delayed from the president. So Reagan/Bush's policies created Clinton's economy. Clinton's policies created W's economy, etc... A while back I looked at unemployment (and another factor, I forget which though) in relation to who was president, it was surprising in it's clarity. I think it went back to 60's or 70's, I'm not sure, but there was a very obvious trend. Unemployment showed stead massive growth when Reagan came in and was an upward trend through his presidency and Bush Sr's. Clinton's showed steady decrease through his entire term. Then with W's presidency it started growing again. A pretty simple relationship, but interesting none the less.

[Silver Tiger]

I think that theory definitely has to hold some weight to it. You don't come in at point zero and work your magic from there. You go from what you're given.

God Blessa!

[Hero1]

This idea that clinton killed the US economy is ludicrous

[Bob]

This idea that clinton killed the US economy is ludicrous

Schnazz absolutely nailed it right on the head. It's an agreed consensus by economists that it takes many years from inputting the policy to seeing results in the economy. Clinton led an era of good-feelings/rub-under-the-carpet write-ups and really set the stage for a recession.

Clinton did kill the economy. He really set us up for a topple-over effect. The market corrected itself when the re-valuing of companies not based on physical materials (i.e.-dot-com) showed a real lack in the true monetary possiblities of these companies. More specifically, a breakdown in their Information Systems units that took payment and translated them into the service the site offered. From that point, Greenspan had to do emergency action which was creating a housing-net to catch all the people screwed out of their money for investing in such dumps. That plan looked nice on paper but banks took the opportunity to use this lazy-loan policy to eventually lead us to this subprime problem that has been hitting the Dow like crazy.

Anyway, here's Schnazz's on-point perfect description again:

I've heard a lot of people claim the theory that the economy is delayed from the president. So Reagan/Bush's policies created Clinton's economy. Clinton's policies created W's economy, etc... A while back I looked at unemployment (and another factor, I forget which though) in relation to who was president, it was surprising in it's clarity. I think it went back to 60's or 70's, I'm not sure, but there was a very obvious trend. Unemployment showed stead massive growth when Reagan came in and was an upward trend through his presidency and Bush Sr's. Clinton's showed steady decrease through his entire term. Then with W's presidency it started growing again. A pretty simple relationship, but interesting none the less.

Again, Clinton did kill the economy.

For example, it takes 2 years after a recession for it to be officially DECLARED as one by economists. It's called time-action lag and is a real effect that comes from the bureaucracy associated with implementing national policy. Now I don't claim to be a master of economics but I've studied it hard and every professor Ive had for Micro, Macro, Economic Geography, and International Econ have all alluded to this "theory" as more of a principle on which to base most understandings of Macro involvement at the Federal level.

Edited February 1, 2008 by Bob

[Hero1]

but how much responsibility goes to the government and how much to the market.. I dont think it was clintons fault people invested in all these dot com businesses which were shaky at best in the late 90s..

[Silver Tiger]

Clinton killed the Radio Star.

God Blessa!

[Schnazz]

Apparently I didn't explain myself well at all. :) The point I was trying to make was that even though people claim that there's economic effect trails presidents, certain indicators, such as unemployment, line up almost exactly with when presidents take and vacate the office, not several years afterwards. For example, during the 12 years for Reagan and Bush Sr., unemployment rose. Then during the eight years of Clinton, unemployment fell. During Bush Jr.'s first four years, unemployment rose again. If there was this trailing effect, you would expect it to kick in after the same number of years. Instead you see changes consistently quickly after a president takes office.

For example, it takes 2 years after a recession for it to be officially DECLARED as one by economists.

Do you have a source for this? My understanding, and for what it's worth, Wiki agrees with me, is that a recession is a decrease in the countries GDB for two or more quarters. It shouldn't take two years to see that change.

It's an agreed consensus by economists that it takes many years (4-10) from inputting the policy to seeing results in the economy.

Do you have any sources for that as well? (maybe that's too broad of a concept to source) While I've heard this many times before, it always sounded like an old wives tail to me, not something that's been supported by thorough research.

Clinton did kill the economy. He really set us up for a topple-over effect. The market corrected itself when the re-valuing of companies not based on physical materials (i.e.-dot-com) showed a real lack in the true monetary possiblities of these companies.

I don't think you can really credit or blame Clinton for the dot com bubble. It seems as though several times in the US's history, new technologies have emerged that created a nearly identical expansion and collapse. For example, the railroad expansions and industrial revolution in the 1800's and then mass production and the automobile expansion of the early 1900's. You see a pattern where a technology is introduce that can "change everything". You see an initial boost to production, efficiencies, etc... based on the new technology. People see this boost and want to cash in on it, wildly investing and trying create new uses for the technology. Since it's new, people don't know what is a good idea and what's not, so a lot of these end up failing. Enough fail, you get a tipping point, and people run like mad from the new technology. And finally, based on earlier success and failures, people figure out how to properly use the new technology, what it's limits are, etc, and it correctly gets incorporated into the economy.

[Bob]

I don't think you can really credit or blame Clinton for the dot com bubble. It seems as though several times in the US's history, new technologies have emerged that created a nearly identical expansion and collapse. For example, the railroad expansions and industrial revolution in the 1800's and then mass production and the automobile expansion of the early 1900's. You see a pattern where a technology is introduce that can "change everything". You see an initial boost to production, efficiencies, etc... based on the new technology. People see this boost and want to cash in on it, wildly investing and trying create new uses for the technology. Since it's new, people don't know what is a good idea and what's not, so a lot of these end up failing. Enough fail, you get a tipping point, and people run like mad from the new technology. And finally, based on earlier success and failures, people figure out how to properly use the new technology, what it's limits are, etc, and it correctly gets incorporated into the economy.

The last recession in 2001, wasn't declared until mid-2003. You could probably look it up on an economist wiki page or something, it's a common fact that there is a big gap between implemented national policy and it's effects. Time action lag is a legitimate economic concept taught at the basic macro levels.

[Bob]

but how much responsibility goes to the government and how much to the market.. I dont think it was clintons fault people invested in all these dot com businesses which were shaky at best in the late 90s..

Clinton embraced the dot-com bubble by allowing the fed rates to be high even when the burst was becoming obvious. Basically he let the well dry before anyone did anything. Instead of trying to cut rates initially, they sat back, as they felt it was too good to fall apart. No one did their homework on the economy in that administration.

Again, I don't mean to sound like I know all, because I certainly don't, but I haven't heard one thing otherwise from economists that points to a current economy being in any way an immediate reflection of the actions taken.

And unemployment went down I believe to new lows even during this subprime fiasco for quite some time. Obviously now things are drying up all over but I just like to look at the numbers and not just go off of people who are naturally inclined politically to believe a certain thought. I'm not saying Bush is the best president, because he's certainly not, but he isn't the devil and people naturally accept him as the goat regardless of the facts behind it.

Edited January 26, 2008 by Bob

[Schnazz]

I don't think you can really credit or blame Clinton for the dot com bubble. It seems as though several times in the US's history, new technologies have emerged that created a nearly identical expansion and collapse. For example, the railroad expansions and industrial revolution in the 1800's and then mass production and the automobile expansion of the early 1900's. You see a pattern where a technology is introduce that can "change everything". You see an initial boost to production, efficiencies, etc... based on the new technology. People see this boost and want to cash in on it, wildly investing and trying create new uses for the technology. Since it's new, people don't know what is a good idea and what's not, so a lot of these end up failing. Enough fail, you get a tipping point, and people run like mad from the new technology. And finally, based on earlier success and failures, people figure out how to properly use the new technology, what it's limits are, etc, and it correctly gets incorporated into the economy.

The last recession in 2001, wasn't declared until mid-2003. You could probably look it up on an economist wiki page or something, it's a common fact that there is a big gap between implemented national policy and it's effects. Time action lag is a legitimate economic concept taught at the basic macro levels.

Could you provide a reference for it? When I google "time action lag" I get exactly one response. The closest thing I can find is "action lag". http://www.amosweb.com/cgi-bin/awb_nav.pl?...mp;k=action+lag defines it as "a part of the implementation lag involving the time it takes for appropriate policies to be launched once they have been agreed to by policy makers" which would be on the scale of months, not years and would not explain why one presidents policies change the economy for the next president. It also talks about the implantation, how long it takes to act on the decisions it reaches. Again, not something would take years. I'm willing to accept that this isn't a good source, but it was the best I could find, and it's your term not mine. :)

[Bob]

Could you provide a reference for it?

Miller, Roger LeRoy. Economics Today. 14. New York City: Addision Wesley, 2007.

[Schnazz]

but how much responsibility goes to the government and how much to the market.. I dont think it was clintons fault people invested in all these dot com businesses which were shaky at best in the late 90s..

Clinton embraced the dot-com bubble by allowing the fed rates to be high even when the burst was becoming obvious. Basically he let the well dry before anyone did anything. Instead of trying to cut rates initially, they sat back, as they felt it was too good to fall apart. No one did their homework on the economy in that administration.

But the federal reserve sets the rates and it's an independent agency. If you want to blame someone for the rates, surely it should be Greenspan.

And unemployment went down I believe to new lows even during this subprime fiasco for quite some time. Obviously now things are drying up all over but I just like to look at the numbers and not just go off of people who are naturally inclined politically to believe a certain thought.

According to the Bureau of Labor Statistics (ftp://ftp.bls.gov/pub/suppl/empsit.cpseea1.txt), unemployment was at 5.0% for December of 2007 and 4.6% for 2007 over all. While this is down for the current administration from the high 2003 of 6.0%, it's not a new low. 2000 has the lowest unemployment for nearly 40 years at 4.0%.

I'm not saying Bush is the best president, because he's certainly not, but he isn't the devil and people naturally accept him as the goat regardless of the facts behind it.

When it comes to our economy, I think we can pretty safely say that Bush has seriously harmed it. Nearly 500 billion dollars spent on war during his two terms is disastrous.

And thanks for the reference!

[Schnazz]

Could you provide a reference for it?

Miller, Roger LeRoy. Economics Today. 14. New York City: Addision Wesley, 2007.

I'm working from the 13th edition, but I'm guessing it's probably pretty similar. I haven't had time to go through it in too much detail yet, but I found the following quote in the chapter on fiscal policy:

Furthermore, because fiscal policy time lags tend to be variable (by anywhere from one to three years), policymakers have a difficult time fine-tuning the economy.

So ok, time lag exists, I'm with ya. The time to get congress to agree to a policy. The time for the policy to affect the economy. Etc... But the time scale is 1-3 years and doesn't even fill the entire first term of a president, let alone the 12 years of Reagan/Bush 1, the 8 years of Clinton, or the now 7 years of Bush 2. By the above logic, right now we're feeling the results of the Bush administrations time and the boon in 98 was a result of the Clinton administrations time.

[Bob]

So ok, time lag exists, I'm with ya. The time to get congress to agree to a policy. The time for the policy to affect the economy. Etc... But the time scale is 1-3 years and doesn't even fill the entire first term of a president, let alone the 12 years of Reagan/Bush 1, the 8 years of Clinton, or the now 7 years of Bush 2. By the above logic, right now we're feeling the results of the Bush administrations time and the boon in 98 was a result of the Clinton administrations time.

Props on the homework. I believe I had the 13th as well, as I sold my book after last year. The thing is, the 2001 burst was a direct effect of the Clinton implementation of policy. Bush then gave Greenspan the go ahead to do emergency moves. Greenspan put the housing net in place, and it failed. I already mentioned that. So yes, as I mentioned, Clinton was responsible for what hit our market so hard in 2001. He did hurt the economy because the economic boon was on false pretenses. Values of stocks weren't right and the era of good feelings, in economic sense, buffered this idea of good produces good. Clinton's moves when the stocks started to roll back, were also hurting, as he only tried to put a bandage on a gaping wound.

My initial point was Clinton harmed our economy severely. And he did. The success of the early 1990's came from the Reagan/Bush administrative policies. Then, Clinton's administration fostered more and more faith in the IT sector without hesitation. This created a false sense of prosperity that eventually toppled over, within the jurisdiction, and time action lag parameters that Clinton controlled.

[Schnazz]

The thing is, the 2001 burst was a direct effect of the Clinton implementation of policy.

What specific policy was that?

Bush then gave Greenspan the go ahead to do emergency moves.

Why would Bush need to give Greenspan the go ahead? The Fed is independent of the White House.

Clinton's moves when the stocks started to roll back, were also hurting, as he only tried to put a bandage on a gaping wound.

What move was that?

The success of the early 1990's came from the Reagan/Bush administrative policies.

What policies and how is it the result of those policies?

Then, Clinton's administration fostered more and more faith in the IT sector without hesitation. This created a false sense of prosperity that eventually toppled over, within the jurisdiction, and time action lag parameters that Clinton controlled.

How did the Clinton administration foster faith in the IT sector? And how much is too much? Surely a certain amount of faith was good, since IT did produce some significant results in the 90's. (just not as much as it was valued at)