March 11, 2006

ONLY BEN BERNANKE CAN KILL IT:

Boost in jobs sign of healthy economic pace (Neil Irwin, 3/11/06, The Washington Post)

Employers added jobs rapidly last month, the latest evidence that the U.S. economy began the year on an upswing.

The nation gained 243,000 jobs in February, the Labor Department reported Friday, led by hiring in the construction, professional service, and health and education fields. In 2005, the economy added an average of 165,000 new jobs per month.

The new report provides further evidence that the economy is growing at a healthy pace, following a lull at the end of last year. Other data released this month indicates that personal income and consumer spending rose at a healthy pace to begin 2006. The report made investors more confident about the state of the economy, analysts said, helping drive the Dow Jones industrial average up 104 points Friday.

"This is a surprisingly strong start of the year," said John Silvia, chief economist at Wachovia.


Economists are easily surprised this last twenty plus years.

Posted by Orrin Judd at March 11, 2006 8:17 AM
Comments

oj-

Don't you think that the propsed changes in fiscal policy lurking around in congress may even be more dangerous for the economy? Bernanke works for the fed. Short term interest rates are one thing, idiotic tax policy is the killer. Business expansions reflect the business cycle which has a life of it's own. The popular belief that the central bank can smooth out the ups and downs of the natural, recurring business cycle in the face of stupid tax and regulatory policy is wishful thinking. The more 'imbalances' present within the economy the more pronounced the recessions. The main causes of imbalances are tax and regulatory policies. Congress is nothing if not shortsighted with an attention span matching the time between elections. A responsible Fed just cleans up the mess as painlessly as possible, allowing Congress and the people to avoid any responsibilty while the band plays on.

Posted by: Tom C., Stamford,Ct. at March 11, 2006 4:16 PM

Sure, but you'll never get a rational tax policy without a constitutional amendment, which ain't happenin'.

Posted by: oj at March 11, 2006 4:21 PM

Tax policy, deficit financing, and expansion of the money supply are all going to be even more significant and charged with passion during the next forty years, as the Boomers live out their retired years, and America struggles to pay for it all.

One thing that we can count on is large deficits, regardless of who controls Congress or the White House.

Posted by: Michael Herdegen [TypeKey Profile Page] at March 11, 2006 4:24 PM

There won't be any struggle.

Posted by: oj at March 11, 2006 4:26 PM

Of course not, the magical productivity fairy will double our national output overnight, and voila !, problem solved.

Posted by: Michael Herdegen [TypeKey Profile Page] at March 11, 2006 4:50 PM

There won't be struggle because younger folks will control the purse strings. Also, (though I know it's naive) Boomers should be grateful for the standard of living we have enjoyed, and temper expectations. Thinking back to my young years, it's amazing the comforts we enjoy, the things we take for granted, etc. My only real fear is living so long that I end up in the old folks "Treblinka".

Posted by: jdkelly at March 11, 2006 4:59 PM

Michael:

Ah, my mistake. I thought you said forty years, not overnight. In forty years it will have doubled twice more, as it has over the past twenty. Overnight probably not.

Posted by: oj at March 11, 2006 5:00 PM

There won't be struggle because younger folks will control the purse strings.

Orrin, along with Fukuyama, believes that seniors will control the purse strings.
While I disagree with their full conclusions, there is some truth to that position.

...it's amazing the comforts we enjoy, the things we take for granted...

Amen.
Plus, we ain't seen nuttin', yet.

oj:

Yes, I expect that by 2050 the U.S. GNP should be around $ 40 trillion annually, in 2005 dollars, but that's like saying that in thirty years, one will have paid off one's mortgage, and then enjoy the security of owning a huge asset.

This is true, but it doesn't mean that during those thirty years it won't be difficult at times to make the mortgage payments.

Posted by: Michael Herdegen [TypeKey Profile Page] at March 11, 2006 7:08 PM
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