April 29, 2006

TRUMAN'S DEAD, PAL:

Enough Already (TIM ROEMER, 4/29/06, NY Times)

In 1946, Karl Frost, an advertising executive, suggested a simple slogan to the Massachusetts Republican Committee: "Had Enough? Vote Republican!" Frost recognized that these simple words could unite his national party and blame its opponents, who controlled Congress, for causing or failing to solve the many problems facing the country, including meat shortages, economic difficulties and labor unrest. The strategy worked: in 1946, both houses of Congress flipped.

Sixty years later, Democrats would be smart to turn Karl Frost's slogan on Karl Rove's strategy.

"Had Enough? Vote Democratic!"


GDP Growth Strongest in 2 - 1 / 2 Years (Reuters, 4/29/06)
The U.S. economy grew at its fastest rate in 2-1/2 years during the first quarter on strong spending and investment, while moderate price rises reinforced hopes for a pause in U.S. interest rate rises this summer.

Gross domestic product grew at a 4.8 percent annual rate in the January-March quarter, the Commerce Department said on Friday, more than twice the fourth quarter's 1.7 percent rate.

It was the best quarterly GDP performance since a 7.2 percent spurt in the third quarter of 2003.

"This rapid growth is another sign that our economy is on the fast track,'' President George W. Bush told reporters.


In 1946 the GDP shrank and US Debt hit a historic high of 120%. Asking voters if they've had enough of an economic boom is political suicide.

Posted by Orrin Judd at April 29, 2006 8:30 AM
Comments

"Spending by upper-income families appears to be driving much of the economy's growth. The average hourly wage for rank-and-file workers who make up roughly 80 percent of the work force has fallen by 5 cents in the last four years, to $16.49, after inflation is taken into account." http://www.nytimes.com/2006/04/28/business/28econ.html?ei=5090&en=fd5df6447aef01ee&ex=1303876800&partner=rssuserland&emc=rss&pagewanted=all

Posted by: Bill in Chicago at April 29, 2006 10:44 AM

You can only cry wolf for so long, Bill. Our cars are better, our houses are bigger, are tv's are bigger and better, the food is better, and we have money to travel. We can see poverty ourselves, and we aren't living it.

Posted by: Robert Mitchell Jr. at April 29, 2006 11:04 AM

Bill: Wage growth has been stagnant, mostly because of the exploding value of tax-free benefits. Wages and salary are now only about 70% of total compensation, which is about the historical low. Overall compensation, including benefits, has been growing strongly, although it slowed in year ended March '06.

Total civilian compensation grew by 3.9%, 3.8%, 3.8%, 3.7%, 3.6% and 2.8% in the years ending March 2001-2006. The cost of benefits in those same years grew by 4.7%, 4.5%, 5.9%, 6.7%, 5.9% and 3.4%.

Posted by: David Cohen at April 29, 2006 12:29 PM

Already people like "Bill in Chicago" have turned the Dems slogan into "Had Enough Herber Hoover? Vote Democrat."

And even then they run the risk of losing to a dead man. (Who, like Mayor Daley the Elder, is probably still voting Dem in Chicago...)

Posted by: Raoul Ortega at April 29, 2006 2:59 PM

Look, I'm no socialist, but the argument that Bill is making is an important one, and your replies so far have been completely non-responsive to his point, which is that 80% of the country is seeing zero percent of the benefit from current economic growth.

For example, Mr. Mitchell's argument that we all have big TV's and money to travel is so anecdotal as to be irrelevant, and Mr. Cohen's use of aggregate numbers to respond to a point made about a specific subset of the population is statistically invalid, as it includes the goodies accruing to the top 20%, who are unquestionably doing so well that their prosperity is skewing the overall results. Also, the idea that the distribution of benefits is somehow trending in the opposite direction from wages is, to put it mildly, an improbable hypothesis.

So wages and benefits are going to the wealthiest 20%. This would be OK if the lower 80% were still gaining, even if in a reduced fashion, but Bill's numbers, among others, show that they are not, even though, ironically, their overall productivity is what is really driving the continuing strength of the economy.

Poor people are disproportionately experiencing the impact of higher energy prices, stagnant wages, periodic economic displacement, and shrinking benefits packages (higher insurance premiums, cancellation of pension plans, etc. etc.). Telling them to suck it up and start saving for their own darned retirement, and that they should be happy because the rest of us are getting richer faster, isn't likely to win many political converts.

I don't know many people in the 80% category myself, but I do feel for them and would like to see some constructive proposals for helping them out. And I know that they each get one vote, just like the rest of us. To deny the reality of their plight, when they clearly show in poll after poll that they are annoyed, is to court electoral disaster.

You are free to do so, of course, but if and when they show up at the polls and vote for a bunch of wacko Democrats, Bill will certainly be justified in telling you "I told you so."


Posted by: HT at April 29, 2006 3:08 PM

HT:

That's just silly. Everyone is working and spending the excess money you claim they don't have.

Posted by: oj at April 29, 2006 3:30 PM

They're "non-responsive" only if you consider empty and emotional slogans worthy of a response.

The real problem is that the Dems are trying to pursuade people that their own lives are an aberation, and that what's happening to the bottom 10% is really the case for everyone but "the rich". Someone is always at the bottom, except in Leftist fantasies where everyone is "above average."

Theirs is an argument devoid of intellecual content, based on false premises and emotion. Premises designed to make responses all but impossible and portray those who do attempt it to look as bad as possible. The only way to not lose that game is to not play it. Something about not wrestling with pigs applies equally to Dems and their trolls.

That's just silly. Everyone is working and spending the excess money you claim they don't have.

Some of us are spending excess money we don't have. Because we know we will have it next month and are tired of waiting for the collapse that the Dems keep promising but never deliver.

Posted by: Raoul Ortega at April 29, 2006 4:20 PM

"an economic boom", what economic boom? The problem is a lot of people don't know there is a boom going on. The White House seldom mentions it, the stupid Republicans distance themselves from it. The Democrats and the MSM twist and spin about it. Is there a boom when nobody acknowledges it?

Posted by: ic at April 29, 2006 5:22 PM

Look, I'm no socialist, but the argument that Bill is making is an important one, and your replies so far have been completely non-responsive to his point, which is that 80% of the country is seeing zero percent of the benefit from current economic growth.

Because his point is untrue. Hourly wage excludes benefits. Benefits are an increasing portion of compensation-- something eager promoted by the New York Times, which always pushes for laws requiring more benefits. In the real world, when you require more benefits, companies respond by slowing wage growth to compensate. The Times is complaining about a problem which all their supported policies make worse.

If you look at total compensation, the 80% argument completely disappears. It's utterly, utterly wrong.

Posted by: John Thacker at April 29, 2006 5:33 PM

Also, the idea that the distribution of benefits is somehow trending in the opposite direction from wages is, to put it mildly, an improbable hypothesis.

The idea that when companies never substitute benefits for wages, especially when legally forced to offer benefits or when tax breaks make it cheaper for both the company and the employee for compensation to be paid in benefits instead of wages, is, to put it mildly, incredibly stupid.

It's blatantly false and contradictory to all the data to claim that benefits are decreasing. Much of the cost of benefits are increasing, as they have for some time. But people always want the latest and greatest just invented health care without having to pay any more than they did before it was invented.

Posted by: John Thacker at April 29, 2006 5:40 PM

ic:

There's a boom when you have a job and your 401k statement is rising. Since that's true for everyone it will be how they vote.

Posted by: oj at April 29, 2006 5:44 PM

In the past 3 or 4 years, Goldman Sachs, Bear Stearns, Lehman Bros., etc. have gone up probably 175%, if not more. Now, the NYT might decry that sort of economic engine, but these firms are investing in businesses all around the world. They are not the button-down, stiff collars they were 30 or 40 years ago.

Even Morgan Stanley is up about 20% from its low of last year, when the CEO and part of the board were tossed out.

Other types of financial firms are doing very well also - Bank of America is climbing after its purchase of MBNA; regional banks are doing well, even with interest rates going up; and firms like Legg Mason are at new highs.

The media will never report this, because they hate Bush, they think Hoobert Heever is always ready to spring from the grave, and their businesses are in terrible shape. Just last week, Morgan Stanley voted its shares against the NYT board of directors, because the stock is down 52% in the past 3 (or 4) years, and all signs are for continued decline. The Sulzberger family has special shares that are insulated from such plebian attack, but they can't hold out forever. The LA Times is in real trouble as well. And TimeWarner stock is still languishing below $18, last time I checked. NBC is 4th in many major markets (and timeslots).

It will be interesting to see if Lou Dobbs ever examines the fall of CNN. He should.

Posted by: ratbert at April 29, 2006 7:31 PM

HT: We don't have to guess. For years ended March 2001-2006, total compensation for Union workers increased 3.5%, 4.5%, 4.4%, 5.6%, 3.6% and 2.7% due to increases in the costs of benefits of 3.2%, 5.1%, 6.7%, 10.6%[!], 5.6% and 2.9%.

Over the last 8 quarters, blue collar workers, as a group, have had total compensation increases of 1.7%, 1.0%, 1.3%, .8%, .6%, .8%, .6% and .1, for year on year gains of approximately 5% and 2%.

Since 2000, the number of employees with access to various benefits has increased for almost all types of benefits. For non-public employees, those with access to either defined benefit or defined contribution plans have increased from 55% to 63%. Health insurance coverage has stayed flat, 52% to 52%, although the percentage of employees required to contribute to their health insurance has increased. Short term disability coverage has increased from 34% to 39% and employer sponsored childcare has increased from 6% of the workforce to 14%.

Finally, if you look at total compensation for blue collar workers with Level 1 skills -- the lowest level -- you see that average total compensation has gone from $8.02 an hour in July 2000 to $8.97 in July 2004, a 12% increase in 4 years. Total compensation for Level 2 workers increased by 17% over the same period. Total compensation for all workers increased by 14% during the same period. Total compensation for white collar workers with Level 15 skills (i.e., the highest skilled workers with the greatest responsibilities) went from $60.58 in July 2000 to $67.25 in July 2004, an increase of 11%.

In other words, from July 2000 through July 2004, the total compensation for the least skilled workers increased at a rate about as high, or a little higher, than the average employee, and more than the most skilled employees.

(For those who care, go to bls.gov and run series NCU0099572300001, NCU0099572300002, NCU0099570000000 and NCU0099570200015 in the National Compensantion Survey.)

Posted by: David Cohen at April 29, 2006 8:55 PM

You can't be 30878 serious?!?

Posted by: Max Ballstein at June 15, 2006 7:21 PM
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