IF THE ELECTION IS OVER THE ECONOMY MUST BE GREAT AGAIN:

A mostly winning economy: Bush and Congress are in a comfortable enough position to focus on long-term economic policy. (LA Times, January 4, 2007)

The economy enters the new year riding a couple of winning streaks. The U.S. gross domestic product has been growing for a record 20 consecutive quarters, and blue-chip companies in the Standard & Poor's 500 have racked up 18 straight quarters of 10% or greater increases in profits. [...]

Housing sales crept upward at the end of the year. Moreover, with the decline in homebuilding, the price of materials has fallen, helping other construction sectors. At the same time, low interest rates, reduced energy prices and strength in other parts of the economy have led most forecasters to predict continued GDP growth in 2007.

Boosting the industrial sector is a harder task. Some Democrats on Capitol Hill, along with some liberal think tanks and advocacy groups, have raised the specter of protectionist trade policies and new rules to limit offshoring. When combined with higher barriers to immigration, they say, these policies would also help narrow the gap between the wealthiest Americans and everybody else. Such steps would be misguided, particularly at a time when the tightening labor market has finally started to drive up real wages.

In the long term, the best ways to improve wages are to create more highly skilled workers and provide a larger market for their talents.

Ray Fair wept.

Posted by Orrin Judd at January 4, 2007 9:02 AM