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View Full Version : The bush economic boom begins to affect the rest of the world


dude1394
04-07-2004, 11:44 PM
Bush Boom (http:// http://quote.bloomberg.com/apps/news?pid=10000080&sid=aaexQkhEtbHA&refer=asia#)


Dollar May Rise in Asia; U.S. Jobless Claims May Have Declined

April 8 (Bloomberg) -- The dollar may strengthen in Asia on expectations a government report will show U.S. jobless claims declined close to a three-year low, stoking speculation the Federal Reserve is moving closer to raising interest rates.

The report comes after the government said Friday the U.S. economy created the most jobs since April 2000. Inflation will probably accelerate and the jobless rate will fall this year as the economy grows by 4.6 percent, the fastest since 1984, according to a Bloomberg News survey of 74 economists.

``I see no particular reason to sell dollars,'' said Tsutomu Soma, a Tokyo-based trader of currencies and derivatives at Okasan Securities Co. ``There's growing optimism that job recovery is taking hold in the U.S.''

Against the euro, the dollar was $1.2159 at 8:28 a.m. in Tokyo from $1.2174 late yesterday in New York. It was at 105.27 yen from 105.24.

The number of Americans filing initial claims for jobless benefits may have dropped to 340,000 last week, a survey of economists showed.

Unemployment claims fell to 342,000 the previous week, according to the Labor Department in Washington. Filings reached 333,000 in the week ended March 13, the fewest since January 2001, and have averaged 351,000 this year, down from 402,000 in 2003. The projected total for last week is based on the median of 42 estimates in a Bloomberg News survey of economists.

Mavdog
04-08-2004, 09:18 AM
Yes, an appreciating dollar will negatively affect most of the economies of the world as the price of their goods (exports) will increase to the american consumer, suppressing demand.

madape
04-08-2004, 09:51 AM
Originally posted by: Mavdog
Yes, an appreciating dollar will negatively affect most of the economies of the world as the price of their goods (exports) will increase to the american consumer, suppressing demand.

Actually, the dollar has been DECLINING for the past year or so. This has lead to dollar denominated goods sold overseas to be more attractive to foreign currency holders. THIS is what increases demand for U.S. goods and services. In fact, Asia (Japan in particular) has been buying dollars from their currency reserves in an effort to keep the price of the dollar UP and save their export businesses. They only recently gave up that fight, as the dollar appears to be stregthening worldwide based on the booming US economy.

Max Power
04-08-2004, 09:54 AM
Originally posted by: Mavdog
Yes, an appreciating dollar will negatively affect most of the economies of the world as the price of their goods (exports) will increase to the american consumer, suppressing demand.

Everything is doom and gloom with you, isn't it?

Mavdog
04-08-2004, 10:37 AM
Originally posted by: Max Power
[quote]
Originally posted by: Mavdog
Yes, an appreciating dollar will negatively affect most of the economies of the world as the price of their goods (exports) will increase to the american consumer, suppressing demand.

Everything is doom and gloom with you, isn't it?

no no no, I am not expressing ANY "doom and gloom", just that the original title suggests that the recent growth in our economy was producing positive news for "the rest of the world". While it is positive for the world's economy to have a growing and healthy American economy, there are ramifications of a stronger dollar that can be very negative to other country's economy and their growth.

madape
04-08-2004, 12:13 PM
Mavdog, you've got it backwards. A strong dollar is GOOD for foreign exporters. See above explanation.

madape
04-08-2004, 01:11 PM
BOOM BOOM BOOOOOOOOOOOOOOOOOOOOOOOM (http://quote.bloomberg.com/apps/news?pid=10000006&sid=alzDyBKF6thI&refer=home)

U.S. Economy: Jobless Claims Fall, Inventories Rise (Update1)
April 8 (Bloomberg) -- The number of Americans filing initial claims for jobless benefits fell to the lowest in more than three years last week and wholesalers built inventories at the fastest pace since 1999 in February, evidence that companies are growing more confident in the U.S. economic expansion.

Initial claims dropped to 328,000 from 342,000 the week before, the Labor Department said in Washington. Last week's filings were the fewest since the week ended Jan. 13, 2001, before President George W. Bush took office. Inventories rose 1.2 percent in February, the Commerce Department said.

Profits are rising and the economy may expand at the fastest pace in two decades this year, prompting companies such as glassmaker Corning Inc. to hire. Payrolls rose 308,000 last month, the biggest jump in almost four years. Wholesalers' sales rose 1.3 percent in February, more than inventories, keeping the stockpiles on hand at a record-low 1.17 months' worth.

``Companies are hiring and starting to rebuild inventories and that is a sign of confidence,'' said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. ``The implication from claims is that the trend in payrolls is still accelerating.''

Optimism among U.S. manufacturing executives in March about their prospects for the next three to six months reached a record in the first quarter, the Arlington, the Virginia-based Manufacturers Alliance/MAPI said today. Its quarterly index of future business activity registered 78 for the first three months of 2004, the highest since the survey began in 1972. The previous high was 77, set in the last quarter of 2003.

Labor Outlook

UBS estimates payrolls will expand an average of 175,000 a month for the rest of the year, O'Sullivan said, adding that today's report ``suggests there might be some upside risk to that number.'' Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said he predicts gains averaging 175,000 to 200,000 jobs a month for the rest of the year.

madape
04-08-2004, 01:13 PM
Funny, if you were to listen to Mavdog, you wouldn't know that we are in the midst of the greatest period of US economic expansion since Nixon was president.

Mavdog
04-08-2004, 01:21 PM
Originally posted by: madape
Funny, if you were to listen to Mavdog, you wouldn't know that we are in the midst of the greatest period of US economic expansion since Nixon was president.

Remember that the amount of growth being reported today is based on comparing to the prior year's level. The fact that we were in the midst of a recession means that the current improvement is compared to poor numbers of a year ago.

There were better economic times in the 1995-2000 time period than we are seeing today. This is not "the greatest economic expansion since Nixon" as that was a period of greater employment gains as well as HH income growth.

Mavdog
04-08-2004, 01:23 PM
Originally posted by: madape
Mavdog, you've got it backwards. A strong dollar is GOOD for foreign exporters. See above explanation.

not for the countries that peg their currency to the Dollar.

madape
04-08-2004, 01:36 PM
Remember that the amount of growth being reported today is based on comparing to the prior year's level. The fact that we were in the midst of a recession means that the current improvement is compared to poor numbers of a year ago.

There were better economic times in the 1995-2000 time period than we are seeing today. This is not "the greatest economic expansion since Nixon" as that was a period of greater employment gains as well as HH income growth.

So are you saying this is not an expansion because last year was a bad year??! Can we not expand out of a recession? Would you say the same thing about Clinton's growth numbers? Remember, he took over in the midst of a recession, too (he also left the country with a pretty nasty recession when he was done). I don't think that the defition of the word "expansion" contains the clause "unless last year was really bad, then it's not expansion." I knew the dimmies preferred revisionist history, but I never knew they had the power to change the popular lexicon.

madape
04-08-2004, 01:48 PM
Originally posted by: Mavdog

Originally posted by: madape
Mavdog, you've got it backwards. A strong dollar is GOOD for foreign exporters. See above explanation.

not for the countries that peg their currency to the Dollar.

In the short term, that's true (although I could certainly make a point that pegging currencies is inherrently a bad idea).

But wasn't your original contention that the rising(falling?) dollar was BAD for the world economy? Perhaps you could explain how a strong(weak) dollar is BAD for countries that peg their currency to the dollar, while at the same time it is NOT GOOD for those countries when the dollar falls(rises). I really don't get your overall point here. Do you mean to suggest that all countries should peg their currency to the dollar to avoid the risk of exchange rate fluctuation? What else could you be arguing here? I don't get it.

Mavdog
04-08-2004, 01:59 PM
Originally posted by: madape
[quote]
Remember that the amount of growth being reported today is based on comparing to the prior year's level. The fact that we were in the midst of a recession means that the current improvement is compared to poor numbers of a year ago.

There were better economic times in the 1995-2000 time period than we are seeing today. This is not "the greatest economic expansion since Nixon" as that was a period of greater employment gains as well as HH income growth.

So are you saying this is not an expansion because last year was a bad year??!

No, it is an expansion from prior years level of business activity. One nees to look at the base that is being compared to when there is "growth".
It is like same store sales in retail stores, and I'll use Gap as an example. For about 15 straight qtrs Gap had decreasing SSS, now they are reporting that their stores SSS have increased by 8%. The problem is that is SSS compared to lower sales levels of a year ago, it's not an 8% increase from their best sales levels of say 5 years ago when they had higher sales volumes. The sales volumes of their last qtr are still 20% lower than their peak.


Can we not expand out of a recession? Would you say the same thing about Clinton's growth numbers?

Yes, the only way out of a recession is growth (or further down into depression, but let's not go there). The first year of the Clinton era of economic growth would be the same as I alluded to above, but not the second, third or fourth year when the growth was being compared on already good prior year numbers.


Remember, he took over in the midst of a recession, too (he also left the country with a pretty nasty recession when he was done). I don't think that the defition of the word "expansion" contains the clause "unless last year was really bad, then it's not expansion." I knew the dimmies preferred revisionist history, but I never knew they had the power to change the popular lexicon.

no, no "revisionism" here, you'll need to get Ann Coulter for that i/expressions/face-icon-small-smile.gif

I hope that you see the meaning of my post with the discussion above, there is true expansion occurring today, and that IS good news, Let's not get carried away tho with talk that this is "the greatest period of US economic expansion since Nixon was president" as that just is not the case when looked at thru job creation and HH income growth. You are focused on percent growth, and percentages reflect the base they are being compared to.

madape
04-08-2004, 02:06 PM
Sorry, I thought we were talking about GROWTH. Apparently, you are talking about some completely different concept in which the rate of accelleration is based on something OTHER than what my physics and mathmatics books taught me.

growth = change in y / change in x

Am I missing something?

Mavdog
04-08-2004, 02:06 PM
Originally posted by: madape

Originally posted by: Mavdog

Originally posted by: madape
Mavdog, you've got it backwards. A strong dollar is GOOD for foreign exporters. See above explanation.

not for the countries that peg their currency to the Dollar.

In the short term, that's true.

But wasn't your original contention that the rising(falling?) dollar was BAD for the world economy? Perhaps you could explain how a strong(weak) dollar is BAD for countries that peg their currency to the dollar, while at the same time it is NOT GOOD for those countries when the dollar falls(rises). I really don't get your overall point here. Do you mean to suggest that all countries should peg their currency to the dollar to avoid the risk of exchange rate fluctuation? What else could you be arguing here? I don't get it.

The current dollar is cheap compared to other currencies, and that has helped American exports. Countries that peg their currency to the dollar (China for example) have benefitted from the relative value by making them competitive in exports. A stronger dollar will decrease intl trade as these exports (both US and others pegged) will rise in cost, decreasing demand.

I agree that we should have a stronger dollar, although I realize it will provide a push to inflation, which is not a good thing. China is benefitting too much from the weak dollar, they are an exporting dynamo capturing too much of the world's manufacturing product. A stronger dollar will force them to unpeg or see their cost advantage disappear.

Mavdog
04-08-2004, 02:10 PM
Originally posted by: madape
Sorry, I thought we were talking about GROWTH. Apparently, you are talking about some completely different concept in which the rate of accelleration is based on something OTHER than what my physics and mathmatics books taught me.

growth = change in y / change in x

Am I missing something?

Clearly you are. growth (increase)=current level of x/prior year level of x being a positive number, if it is a negative number there is no growth (decrease).

madape
04-08-2004, 02:19 PM
The current dollar is cheap compared to other currencies, and that has helped American exports. Countries that peg their currency to the dollar (China for example) have benefitted from the relative value by making them competitive in exports. A stronger dollar will decrease intl trade as these exports (both US and others pegged) will rise in cost, decreasing demand.

I agree that we should have a stronger dollar, although I realize it will provide a push to inflation, which is not a good thing. China is benefitting too much from the weak dollar, they are an exporting dynamo capturing too much of the world's manufacturing product. A stronger dollar will force them to unpeg or see their cost advantage disappear.


What?!? How will a strong dollar decrease trade with countries who have their currencies pegged to the dollar? Please explain. I thought you said earlier that a strong dollar WOULDN'T have an effect on pegged currencies. I guess I need to brush up on these left "nuances", because it looks to me like you are arguing on both sides of the issue again.

As for China, it is my opinion that a stronger dollar will further influence China to KEEP the peg. They are experiencing a massive influx of dollars right now thanks to their artificially high exchange rate with the dollar. If the trend of dollar influx were to continue, the money supply issue would evenutally cause an asset bubble, forcing them to either remove their peg and let the exchange rates normalize, or face an enormous market crash and asset devaluation in the future. A rising dollar would just cool a growing monitary crisis in China.

Mavdog
04-08-2004, 02:31 PM
[i]Originally posted by: madape What?!? How will a strong dollar decrease trade with countries who have their currencies pegged to the dollar? Please explain. I thought you said earlier that a strong dollar WOULDN'T have an effect on pegged currencies. I guess I need to brush up on these left "nuances", because it looks to me like you are arguing on both sides of the issue again.

First of all, what economic "left nuances" have I posted?
Countries that have their currency pegged to the $ will see their end prices increase to non-pegged currency consumers as the dollar imcreases in value.


As for China, it is my opinion that a stronger dollar will further influence China to KEEP the peg. They are experiencing a massive influx of dollars right now thanks to their artificially high exchange rate with the dollar. If the trend of dollar influx were to continue, the money supply issue would evenutally cause an asset bubble, forcing them to either remove their peg and let the exchange rates normalize, or face an enormous market crash and asset devaluation in the future. A rising dollar would just cool a growing monitary crisis in China.

You understimate the bank lending controls in China. They have already pressured bank lending downward to cool the market and inflation. With the US their primary export market, a stronger dollar (if the yuan is left pegged) won't cool the money supply as you suggest.

madape
04-08-2004, 02:35 PM
Originally posted by: Mavdog

Originally posted by: madape
Sorry, I thought we were talking about GROWTH. Apparently, you are talking about some completely different concept in which the rate of accelleration is based on something OTHER than what my physics and mathmatics books taught me.

growth = change in y / change in x

Am I missing something?

Clearly you are. growth (increase)=current level of x/prior year level of x being a positive number, if it is a negative number there is no growth (decrease).

Did we have negative GDP last year? Did we have negative employement? Did we have negative first time jobless claims? What the hell are you talking about?

We aren't comparing net gains and losses year over year, we are comparing the actual numbers.

for example, 2004 GDP growth is calculated as: (2004 GDP - 2003 GDP) / (2004 - 2003)

For example: 308,000 jobs were ADDED last month... GDP ROSE by 8.2% in the fourth quarter last year, initial jobless claims FELL by 14,000 last week.. you know, the normal calculations. I don't know what kind of math you are using where you compare net change in one period with net change in another. I'm not sure what call that, but I agree with you, it's not growth.

Poly Sci major? I can tell.

Mavdog
04-08-2004, 02:40 PM
edit

madape
04-08-2004, 02:57 PM
First of all, what economic "left nuances" have I posted?
Countries that have their currency pegged to the $ will see their end prices increase to non-pegged currency consumers as the dollar imcreases in value.

Using that logic, wouldn't the end prices decrease if the dollar falls? Didn't you say that a falling dollar wouldn't help countries that had their currencies pegged to the dollar? At I think that's what you said eight posts ago. You also said that a rising dollar was BAD for foreign exporters, so I really wouldn't be suprised if you changed your tune on this issue, too.


You understimate the bank lending controls in China. They have already pressured bank lending downward to cool the market and inflation. With the US their primary export market, a stronger dollar (if the yuan is left pegged) won't cool the money supply as you suggest.

Perhaps I do underestimate the lending controls. If the Chinese can keep the money supply problem at bay for years when the yuan/dollar exchange rate is artificially kept much higher than the real exchange rate, I will be impressed. It's never been a successful long term tactic in any other developing country. Perhaps China will be the first. As for the effect of the rising dollar, all I can say is that the Chinese central bank is probably breathing a little bit easier now that the dollar looks like it's appreciating.

Mavdog
04-08-2004, 03:42 PM
Originally posted by: madape Sorry, I thought we were talking about GROWTH. Apparently, you are talking about some completely different concept in which the rate of accelleration is based on something OTHER than what my physics and mathmatics books taught me.

growth = change in y / change in x

Am I missing something?

Clearly you are. growth (increase)=current level of x/prior year level of x being a positive number, if it is a negative number there is no growth (decrease).

[quote]
Did we have negative GDP last year?

Not too sure how one has "negative GDP"....guess that is when a country is destroying its product rather than making more.

4th Q 02 GDP = $10,160B ("Y")
4th Q 03 GDP = $10,493B ("X")

That's a positive growth number, x/y is greater than 1. Pretty simple, huh?


Did we have negative employement?

employment peaked in March 01 at 137.7M workers. It was at 136.3M in April '02 and 137.0 in Feb '03. So yes there was growth compared to the year before, but no growth when compared to the '01 numbers (see, 02 was not a good year for employment)


Did we have negative first time jobless claims?

In Feb there were 8.17M unemployed, in March there were 8.35M unemployed. That's an increase BTW. An additional 328,000 workers filed jobless claims, down 14,000 from the earlier period.


What the hell are you talking about?

going over your head?


We aren't comparing net gains and losses year over year, we are comparing the actual numbers.

for example, 2004 GDP growth is calculated as: (2004 GDP - 2003 GDP) / (2004 - 2003)

For example: 308,000 jobs were ADDED last month... GDP ROSE by 8.2% in the fourth quarter last year, initial jobless claims FELL by 14,000 last week.. you know, the normal calculations.

yes, 308,000 jobs added from year ago levels, also there were 328,000 new unemployed from year before levels. Remember that 03 total people employed was still less than the 2001 total people employed, so we are just now getting back to the 01 numbers. Initial jobless claims did fall, but they are still additional unemployed people.

Yes GDP rose from the prior period.


I don't know what kind of math you are using where you compare net change in one period with net change in another. I'm not sure what call that, but I agree with you, it's not growth.

Poly Sci major? I can tell.

"net change in one period with net change in another"??? What the heck are you talking about??

It is simply comparing the stats. You're trying to apply a formula of "change in y/change in x" that has no bearing. It isn't about "change" it is the data itself that is compared.

You were a Phys ed major, right?

Usually Lurkin
04-08-2004, 03:56 PM
Originally posted by: Mavdog

It is simply comparing the stats. You're trying to apply a formula of "change in y/change in x" that has no bearing. It isn't about "change" it is the data itself that is compared.

I'm not following half this economics stuff, but this is the absolute best example of double-speak I've ever read. Two guys trying to define "growth", and one says it's not about change. Beautiful.

Mavdog
04-08-2004, 04:09 PM
Originally posted by: Usually Lurkin

Originally posted by: Mavdog

It is simply comparing the stats. You're trying to apply a formula of "change in y/change in x" that has no bearing. It isn't about "change" it is the data itself that is compared.

I'm not following half this economics stuff, but this is the absolute best example of double-speak I've ever read. Two guys trying to define "growth", and one says it's not about change. Beautiful.

"Change in y/change in x" would mean "8.9%/4.5%"...it doesn't make sense. It is the data of one period compared with another, or "40,400/39,500=1.02" for growth, or "39,500/40,400=.97", for no growth.

Get it?

Usually Lurkin
04-08-2004, 04:14 PM
Originally posted by: Mavdog

"Change in y/change in x" would mean "8.9%/4.5%"...it doesn't make sense. It is the data of one period compared with another, or "40,400/39,500=1.02" for growth, or "39,500/40,400=.97", for no growth.

Get it?

what does 40,400 represent?

madape
04-08-2004, 04:21 PM
"net change in one period with net change in another"??? What the heck are you talking about??

It is simply comparing the stats. You're trying to apply a formula of "change in y/change in x" that has no bearing. It isn't about "change" it is the data itself that is compared.

You were a Phys ed major, right?

Hey man, I'm just trying to keep up with your train of thought. You were the one who was trying to compare a net loss in one year to a net gain in another year. ( You remember, the negative number vs the positive number argument).

I think you are confusing me making fun of your bizarre calculations with the point I was actually making about growth. In the process, it seems you've gained a some rudementary understanding of what economic growth actually means... at least if I'm decyphering your latest ramblings correctly. If that's the case, congratulations... You just passed third grade math.

Drbio
04-08-2004, 04:21 PM
I officially love madape. Yes...I said it. I love madape.

madape
04-08-2004, 04:21 PM
x = GDP
y = time

moron

Mavdog
04-08-2004, 05:16 PM
Originally posted by: madape
Hey man, I'm just trying to keep up with your train of thought. You were the one who was trying to compare a net loss in one year to a net gain in another year. ( You remember, the negative number vs the positive number argument).

man, you are ALL over the map.

You made the point "you wouldn't know that we are in the midst of the greatest period of US economic expansion since Nixon was president" which I challenged, as we are NOT experiencing as much a) emplyment growth in raw numbers, or b) household income growth in raw numbers. Still waiting for your justification for that statement...


I think you are confusing me making fun of your bizarre calculations with the point I was actually making about growth. In the process, it seems you've gained a some rudementary understanding of what economic growth actually means... at least if I'm decyphering your latest ramblings correctly. If that's the case, congratulations... You just passed third grade math.

If you cannot understand (or "decyphering") this data, or if it "is confusing" you it is you who have failed "third grade math":

employment peaked in March 01 at 137.7M workers. It was at 136.3M in April '02 and 137.0 in Feb '03. So yes there was growth compared to the year before, but no growth when compared to the '01 numbers (see, 02 was not a good year for employment)

In Feb there were 8.17M unemployed, in March there were 8.35M unemployed. <u>That's an increase BTW</u>. An additional 328,000 workers filed jobless claims, down 14,000 from the earlier period

and that is "the greatest period of economic expansion since Nixon"????? Patently false. Funny but not once have you contradicted any of my data.


x = GDP
y = time

moron

Yes you are a moron if you cannot grasp the data I have provided.

madape
04-08-2004, 06:25 PM
I feel like I'm talking to a two year old.

We have added 308,000 jobs in one month.

In that month, jobs GREW by 308,000

(# of Jobs at the end of March) - ( # of jobs at the end of Feb) / ( 1 month) = 308,000 jobs per month

308,000 JOBS PER MONTH. THAT'S THE RATE OF JOB GROWTH WE ARE TALKING ABOTU!!!!!! 380,000 in one month. Is that so fucking hard to understand? Two months ago, we might have been growing at a rate of 100,000 jobs per month, But in March, we grew at a rate of 308,000 per month. This number has nothing to do with how many jobs existed in 2001, 1999, or even 20,000BC. In March, we added at 308,000 jobs! That means we grew at a rate of 308,000 jobs a month, or 3.7 million jobs a year. It's not a hard concept!!!!

It may also be accurate to say that we have grown at a much slower rate over the past year, three years, or 50,000 years. But that does not impact the speed at which we grew in the last month. If you want, you can change the formula to

(# of jobs at the end of March, 2004) - (# of jobs at the end of March, 1999) / ( 5 years)

That will give you the rate of growth in a five year period. If you want to paint the economic picture black by including the Clinton recession in your overall growth numbers, fine. But we are out of that recession now. We have emerged from the "jobless recovery". I don't know about you, but I think that when talking about the recovery, it is worthwhile to look at the economic growth in more recent time periods... like the last month, or the last three months. According to the index referenced in the Bloomberg article, business activity hasn't growth THIS fast in a three month period since NIXON was president. Sorry if that confuses you, or rains on your doom-and-gloom parade.

Mavdog
04-08-2004, 07:57 PM
gee ape, when you say "the greatest...since Nixon" it is necessary to look at a period of time, not ONE month. Hey, let's look at a friggin' DAY and make some claim about it...yesterday was "the worst job growth since Hoover" or "the lowest increase in unemployment since Kennedy". ridiculous...

To calm it all down, let's recap:

Good month for the economy, a good quarter as a matter of fact.
Job growth positive.
Unemployment still high, increases in unemployed job seekers moderating.
GDP growth good.
Value of dollar to increase, could hurt exports.
HH income not increasing.

mavsman
04-08-2004, 08:07 PM
I didn't quite grasp the concept. Four years ago (in April 2000, after 8 years of Clinton) 1 EUR was worth US$ 0.95. Now it's worth 1.21. How would that be good for foreign exporters?

madape
04-08-2004, 09:19 PM
It's not. A declining dollar HURTS foreign exporters.

madape
04-09-2004, 10:34 AM
Pictures of the recovery

http://64.78.48.77/worththousandwords.GIF

http://64.78.48.77/PAYEMS_5yrs3.GIF

Mavdog
04-09-2004, 11:22 AM
Originally posted by: mavsman
I didn't quite grasp the concept. Four years ago (in April 2000, after 8 years of Clinton) 1 EUR was worth US$ 0.95. Now it's worth 1.21. How would that be good for foreign exporters?

Foreign companies exporting to the US market will see the US prices of their products decrease, becoming more price competitive, as the dollar increases in value to their currency. If their currency is "pegged" (at a set exchage rate) this will not happen, the US price of their goods will be static but their products will increase in price to the non-pegged currencies/countries.

US cos. products that are exported will increase in cost in foreign markets. This will make US exports less price competitive in international markets. The pegged countries will also see the costs of their exports increase to countries whose currency is declining in value relative to the dollar, import prices from those countries decrease, which is not always a good thing for a lesser developed/less diversified economy.

It is plausible that the US government has supported the weaker dollar to help domestic manufacturing be price competitive in exports. From the stats the US manufacturing industry is still hurting. Just wait until a stronger dollar hits them...the key to their survival is the high productivity of the American worker. The productivity probably cannot make up the exchange difference tho, so trouble is ahead for US manufacturing.

madape
04-09-2004, 12:18 PM
Originally posted by: Mavdog

Originally posted by: mavsman
I didn't quite grasp the concept. Four years ago (in April 2000, after 8 years of Clinton) 1 EUR was worth US$ 0.95. Now it's worth 1.21. How would that be good for foreign exporters?

Foreign companies exporting to the US market will see the US prices of their products decrease, becoming more price competitive, as the dollar increases in value to their currency. If their currency is "pegged" (at a set exchage rate) this will not happen, the US price of their goods will be static but their products will increase in price to the non-pegged currencies/countries.

Mavsman was asking how foreign exporters are helped by a falling dollar. They aren't! The price of Euro demoninated goods RISES relative to the dollar when the dollar falls. ($100 buys you 82 one-euro widgets today, versus 105 one-euro widgets in 2000). While what you are saying is true, it is not the answer to the question mavsman asked. He was asking about the impact of a falling dollar. Don't confuse the man!


It is plausible that the US government has supported the weaker dollar to help domestic manufacturing be price competitive in exports.

Brilliant isn't it?


From the stats the US manufacturing industry is still hurting.

uuuuuuuuh... what stats are you talking about? The Institute for Supply Management's factory index for March rose to 62.5, close to a two-decade high of 63.6 in January, from 61.4. The index has now exceeded 50, signaling expansion, for 11 months. Those in the mainstream (you know, the guys who aren't blinded by liberal idiology) think that what we are seeing out the manufacturing industry right now is downright incredible! "Plain and simple, the manufacturing sector is smoking,'' said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. `"The breadth of the expansion as well as its speed is breathtaking.''

So what "statistic" sre you talking about ? Jobs? If so, your next point makes no sense.


the key to their survival is the high productivity of the American worker. The productivity probably cannot make up the exchange difference tho, so trouble is ahead for US manufacturing.

Do you even know what productivity is? It seems to me that the industry is now increasing output at a record pace, while keeping it's labor costs low. That's productivity brotha'. Unless you are a socialist, marxist, or union butt-licker, you have to acknowledge how absolutely red-hot the manufacturing industry is right now in America. I doubt very highly that a slowly rising dollar is going to bring the industry to it's knees. But thanks anyway for some more of your misguided doom. It always puts a smile to my face.

Mavdog
04-09-2004, 01:40 PM
Originally posted by: madape

Originally posted by: Mavdog
[quote]
Originally posted by: mavsman
I didn't quite grasp the concept. Four years ago (in April 2000, after 8 years of Clinton) 1 EUR was worth US$ 0.95. Now it's worth 1.21. How would that be good for foreign exporters?

Foreign companies exporting to the US market will see the US prices of their products decrease, becoming more price competitive, as the dollar increases in value to their currency. If their currency is "pegged" (at a set exchage rate) this will not happen, the US price of their goods will be static but their products will increase in price to the non-pegged currencies/countries.

Mavsman was asking how foreign exporters are helped by a falling dollar. They aren't! The price of Euro demoninated goods RISES relative to the dollar when the dollar falls. ($100 buys you 82 one-euro widgets today, versus 105 one-euro widgets in 2000). While what you are saying is true, it is not the answer to the question mavsman asked. He was asking about the impact of a falling dollar. Don't confuse the man!

your failure to understand perspective is amazing. Only Mavsman can say what he was asking...one man's export is another man's import. A simplistic answer like "A declining dollar HURTS foreign exporters" isn't the case if those "foreign exporters" are American cos exporting their products, it's correct if it is non-US cos. exporting to the US.


It is plausible that the US government has supported the weaker dollar to help domestic manufacturing be price competitive in exports.

Brilliant isn't it?

Not really. Our balance of payments is still upside down, the manufacturing sector has not benefitted, there are too many dollars held outside the country, and when the dollar starts to rise in value we will see strong inflationary pressure.


From the stats the US manufacturing industry is still hurting.

uuuuuuuuh... what stats are you talking about? The Institute for Supply Management's factory index for March rose to 62.5, close to a two-decade high of 63.6 in January, from 61.4. The index has now exceeded 50, signaling expansion, for 11 months. Those in the mainstream (you know, the guys who aren't blinded by liberal idiology) think that what we are seeing out the manufacturing industry right now is downright incredible! "Plain and simple, the manufacturing sector is smoking,'' said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. `"The breadth of the expansion as well as its speed is breathtaking.''

Don't understand that the "two decade high of 63.6" is an index of factory utilization do you? Fewer factories are on line and fewer workers are employed in that industry. They've "downsized", which will produce higher earnings for the corporations (what the economist refers to as "smoking" as higher earnings=higher stock prices) but not greater employment.

I know that data is hard for you to follow, but try to understand this: In Jan 2000 11.6 M workers were employed in production occupations. That number is 9.5M in March 04. Unemployment of manufacturing workers totaled 734,000 in Jan 2000, in Marxh 2004 that figure is 1,083,000 unemployed. The unemployment rate in Jan 2000 for manufacturing workers was 3.6%, in March 2004 that unemployment rate was 6.3% (higher than the natl avg). That may be "smoking" and "breathtaking" but only in a negative sense!


So what "statistic" sre you talking about ? Jobs? If so, your next point makes no sense.

the key to their survival is the high productivity of the American worker. The productivity probably cannot make up the exchange difference tho, so trouble is ahead for US manufacturing.

Do you even know what productivity is? It seems to me that the industry is now increasing output at a record pace, while keeping it's labor costs low. That's productivity brotha'. Unless you are a socialist, marxist, or union butt-licker, you have to acknowledge how absolutely red-hot the manufacturing industry is right now in America. I doubt very highly that a slowly rising dollar is going to bring the industry to it's knees. But thanks anyway for some more of your misguided doom. It always puts a smile to my face.

As they say, ignorance is bliss, and your ignorance must be producing that smile on your face.
Productivity is not based on labor costs.
Productivity is the relationship between the output of an industry and the labor hours expended on that output.

And that "absolutely re-hot..manufacturing industry...right here in America"? In March 2003 there were 14.65M employees, in August 2003 there were 14.34M manufacturing employees, in March 2004 that number of workers employed in manufacturing DECLINED to 14.31M
Only in your mind would a 340,000 DECREASE in employment be considered "red hot"...

As far as "bring[ing] the [manufacturing] industry to its knees", no, a rising value of the dollar won't do that, It also won't aid in reversing the declining employment in the manufacturing industry either.

dude1394
04-09-2004, 01:52 PM
Geezz... Mavdog are you a luddite or something? do you think we should still be stamping out metal by hand? Productivity decreases jobs doing one thing so they can do something else. You know that but you are just playing the democrat tune because it's the only song they know right now. The bush boom continues to make liberals long for the old days.

It has been shocking to me how the democrats have now become the party of the status quo. don't change social security. don't change medicare. don't change schools. don't change anything except tax rates which need to be raised.

Really discouraging for a party that thinks of themselves as progressive. Really distressing to me is that compared to the latest crop of democratic leaders Clintoon was a MODERATE!!!

Mavdog
04-09-2004, 02:43 PM
Originally posted by: dude1394
Geezz... Mavdog are you a luddite or something? do you think we should still be stamping out metal by hand? Productivity decreases jobs doing one thing so they can do something else.

That's why the GDP from the manufacturing industry peaked in 2000 and has been declining since?

Of course, those former manufacturing workers could get a job at WalMart paying about 50% of their former wage, with very little benefits...now THAT"S sound economic policy dude!

Speaking of being a "luddite"...

madape
04-09-2004, 02:49 PM
Mavdog- I thought you said that productivity was the key to the survival of the manufacturing industry. Well, you can't exactly optimize productivity by hiring workers you don't need. Part of being productive is decreasing the amount of cost spent on labor. This means producing more with less headcount, which is precisely what the manufacturers are doing right now. I know the Marxists in your party would like to force these companies to take on unneeded workers for the good of the proletariat, but in a capitalist society, business are allowed make a profit. Those displaced factory workers will get new jobs, just like all the cotton pickers, rum-distillers, arrowsmiths, scribes, etc.. did after technology rendered THEIR jobs somewhat obsolete... and we will be a better and more productive country because of it. I don't think you can argue that the cotton industry in America was brought to it's knees because Eli Whitney showed us how to produce cotton with one-hundreth of the manpower previously needed. In fact, the cotton gin turned cotton into the economic locomotive of the south! What's going on in the manufacturing industry is called innovation, man. This is a GOOD thing.

A couple of days ago, you wanted me to cite one instance in which you argued against capitalism.. Well this sad lament for the worker victimized by the greedy manufacturing corportations is straight out of the Communist Manifesto.

Mavdog
04-09-2004, 03:17 PM
Originally posted by: madape
Mavdog- I thought you said that productivity was the key to the survival of the manufacturing industry. Well, you can't exactly optimize productivity by hiring workers you don't need.

Ape, it was YOUR posting that "manufacturing industry right now is downright incredible!" that I was responding to. You were inaccurate as it is not.

Workers are hired to produce and satisfy demand for their product. As demand rises workers are hired to produce. Demand falls and workers are dismissed. The key to US manufacturing hiring is price competitiveness.


Part of being productive is decreasing the amount of cost spent on labor. This means producing more with less headcount, which is precisely what the manufacturers are doing right now.

Insert the word "profitable" instead of "productive" and the statement is correct. As I showed with the declining GDP from manufacturing industry, they are NOT "producing more with less headcount", they are producing less with less headcount. They might be more profitable producing less, but that's not the point.


I know the Marxists would like to force these companies to take on unneeded workers for the good of the proletariat, but in a capitalist society, business are allowed make a profit. It's called innovation.

Innovation? It's called fitting your business model to the market. Nobody is proposing to "force these companies to take on unneeded workers". I am only showing the points you made to be wrong.


Those displaced factory workers will get new jobs, just like all the cotton pickers, rum-distillers, arrowsmiths, scribes, etc.. did after technology rendered THEIR jobs somewhat obsolete... and we will be a better and more productive country because of it. I don't think you can argue that the cotton industry in America was brought to it's knees because the cotton gin allowed us to produce cotton with one-hundreth of the manpower previously needed. It's called innovation, man. The manufaturing industry is able to produce more with less people. This is a GOOD thing.

Technology is a good thing...but as I have shown, the manufacturing industry is producing LESS not more. Remember your "the manufacturing industry right now is downright incredible" comment? It's wrong.


A couple of days ago, you wanted me to cite one instance in which you argued against capitalism.. Well your whines in this thread about "all the profit earnings going to the corporation" are straight out of the Communist Manifesto.

Trying to not talk about your inaccurate comments eh?
I have said nothing in any of these posts in which I "argued against capitalism". Show me where they are...typical right wing response of calling someone a "marxist" or "straight out of the Communist Manifesto" when shown you are wrong.
How childish.

madape
04-09-2004, 04:27 PM
Sorry man, but you have been misinformed about productivity.

The government defines labor productivity as "output per hour of labor". http://www.bls.gov/bls/productivity.htm

Meaning that if output stays the same, and labor hours go down, there will be a resulting rise in productivity. As it does if output goes up, and labor hours stay the same. It's really not a hard concept to understand. Any child should be able to grasp the concept.

Sure, a drop in demand can cause output to fall. You claim to have "shown" that manufacturing levels have declined, but I can't find such proof anywhere in this thread. I propose that once again you are talking out your ass. I was curious, so I looked it up. After a dip in 2002, manufacturing output actually ROSE last year by 0.1%. In fact, in the fourth quarter of 2003, manufacturing output rose 6.1%, one of the highest quarterly rises in years!!!!! Over the past three decades, manufacturing employement has dropped almost every single year. It is now as low as it has been since the 1950s. Yet output has grown in almost every single year. How can output rise while the labor force drops??!!?!? If it's not productivity, please explain to me what is causing this unusual phenomenon.

The truth, as nasty as it may be to the democrats, is that the manufacturing industry is producing more goods using less workers. In other words, it is becoming more productive. In fact, 2003 was its most "productive" year ever.

Here's a graph from the Beureau of Labor Statistics that just might make you look stupid:
Measure: Output Per Hour
Sector: Manufacturing
http://data.bls.gov/labjava/servlets/graphics/generated_graphs/PRS30006092_67772_1081540297156.gif

Notice that productivity growth has been positive every single year. Also notice that it rose more in 2002 and 2003 than it has during any year included in this graph. In other words, productivity under Bush is skyrocketing.

Of course, if you have a better metric for productivity than the BLS has, please let me know, I'd love to hear it.

The reason I called you a socialist is because you measured the strength of the manufacturing industry by it's ability to employ workers. You decried the evils of the greedy manufacturing industry for soaking up all the earnings while all the worker got was a pink slip. That is the kind of thinking is what lead to the Bolshevik revolution. It's similar to the social views held by Lenin and Marx. The struggle of the working men against the evils of industry is the overwhelming theme of the Communist Manifesto. You know, the whole "workers of the world unite", "power to the working class", kind of bullshit ideals that have proven to be poisonous to every society that has adopted them. Apparently you, and your left leaning friends haven't learned from history.

Mavdog
04-09-2004, 06:14 PM
Originally posted by: madape
Sorry man, but you have been misinformed about productivity.

The government defines labor productivity as "output per hour of labor". http://www.bls.gov/bls/productivity.htm

Meaning that if output stays the same, and labor hours go down, there will be a resulting rise in productivity. As it does if output goes up, and labor hours stay the same. It's really not a hard concept to understand. Any child should be able to grasp the concept.

well, I guess you are a "child" for not seeing this statement on the very page you gave a link to (the same definition as I stated in an earlier post BTW):
Labor productivity measures output per hour of labor
Nothing in that definition about wages, huh? You were including wages in your definition of productivity, and that isn't correct.


Sure, a drop in demand can cause output to fall.

No, a drop in demand will cause inventories to rise, which should produce reduced output. There is a lag time.


You claim to have "shown" that manufacturing levels have declined, but I can't find such proof anywhere in this thread. I propose that once again you are talking out your ass. I was curious, so I looked it up. After a dip in 2002, manufacturing output actually ROSE last year by 0.1%. In fact, in the fourth quarter of 2003, manufacturing output rose 6.1%, one of the highest quarterly rises in years!!!!!

Still don't understand "percent increase/decrease" do you? yes, manufacturing output rose IN RELATION TO THE PERIOD IT IS COMPARED TO, which was lower than the year before that. SO GDP of manufacturing is STILL not at the level it was in 2000. That is still a DECREASE from the 2000 levels. Hard concept for you... to grasp it seems


Over the past three decades, manufacturing employement has dropped almost every single year. It is now as low as it has been since the 1950s. Yet output has grown in almost every single year. How can output rise while the labor force drops??!!?!? If it's not productivity, please explain to me what is causing this unusual phenomenon.

GDP from manufacturing has NOT grown "almost every single year". Check it out...

For some inexplicable reason you are of the opinion I am saying that productivity isn't increasing. Sorry, but I never said that...nice try tho.


The truth, as nasty as it may be to the democrats, is that the manufacturing industry is producing more goods using less workers. In other words, it is becoming more productive. In fact, 2003 was its most "productive" year ever.

2003 stats? Please show them. The latest stast at the BEA is from 2002.

EDIT: Here's the GDP for 1999: $1.48T 2000: $1.52T 2001: $1.42T


Here's a graph from the Beureau of Labor Statistics that just might make you look stupid:
Measure: Output Per Hour
Sector: Manufacturing
http://data.bls.gov/labjava/servlets/graphics/generated_graphs/PRS30006092_67772_1081540297156.gif

Notice that productivity growth has been positive every single year. Also notice that it rose more in 2002 and 2003 than it has during any year included in this graph. In other words, productivity under Bush is skyrocketing.

You're attempt to put some words in my mouth on productivity is failing. I never said productivity is falling, I said GDP of manufacturing industry has decreased, and employment in manufacturing industries has decreased. You seem obsessed with productivity when that isn't an issue, except that you incorrectly included wages in its definition.

Nice graph BTW.

So you want to give GWBush credit for an industry's increase in productivity? Amazing...and Gore was made fun of for the internet statement. This is just as inane.


Of course, if you have a better metric for productivity than the BLS has, please let me know, I'd love to hear it.

yawn. What the heck do you keep talking about productivity? Because the employment data is so bad? Because the GDP of manufacturing is down?


The reason I called you a socialist is because you measured the strength of the manufacturing industry by it's ability to employ workers.

So you have made a new definition of "socialist"? That certainly isn't one ai have ever heard of...does it go like this:
"A Socialist is a person who believes that a countries manufacturing strength is measured by its manufacturing industry employment" hahaha, that's a good joke...


You decried the evils of the greedy manufacturing industry for soaking up all the earnings while all the worker got was a pink slip. That is the kind of thinking is what lead to the Bolshevik revolution. It's similar to the social views held by Lenin and Marx. The struggle of the working men against the evils of industry is the overwhelming theme of the Communist Manifesto. You know, the whole "workers of the world unite", "power to the working class", kind of bullshit ideals that have proven to be poisonous to every society that has adopted them. Apparently you, and your left leaning friends haven't learned from history.

Funny, I never criticized industry and certainly never wrote the word "greedy" or any word like it. I did say that their earnings are increasing, do you believe that is criticism? what a leap...
Marxism actually doesn't include "pink slip" in its theory, as it sees the owners of industry in a continual abuse of its workers. How can they be abused if they aren't employed? man, you do make me laugh out loud...
Perhaps a good political theory course would help you with your incorrect assumptions.

dude1394
05-05-2004, 08:59 PM
And of course the deficit continues to accelerate downward. Just like under Reagan...Tax Cuts = More Economic Growth= More Tax Revenue. Go bush!!

Bush Boom Trims the Deficit Too - Tastes Great AND Less Filling (http://www.investors.com/editorial/issues.asp?v=5/5)

Deficit: The budget news just keeps getting better or worse, from the opposition's point of view. The tax cuts are working and the red-ink tide isn't so high after all.

It was an item of faith during the Democratic primaries that President Bush's fiscal policies were taking the country into a bleak future of deficits as far as the eye could see.

Nowadays, such rhetoric rings false, if one hears it at all. The doomsday deficit scenario, along with its political implications, has run into a problem with the economy, which refuses to roll over and play dead.

The federal deficit is doing what any unbought economist would predict at a time of robust growth. It's shrinking fast. It's not going to hit zero anytime soon, but it appears to be closing much more quickly than the Bush administration had predicted. (more) (http://www.investors.com/editorial/issues.asp?v=5/5)

dude1394
05-10-2004, 07:30 PM
DAAAAAMMNNNNNNNN 288,000 new jobs in April and 337,000 in March. Unemployment rate drops to 5.6%.

1.1 MILLIOONNNNNNN Jobs created in the last 8 months.

Democrats cry big crocodile tears.

reeds
05-12-2004, 01:50 PM
Far Far under the number of jobs Bush has promised....

LRB
05-12-2004, 02:41 PM
Originally posted by: reeds
Far Far under the number of jobs Bush has promised....

Wow, that's got to be come back of the year material. i/expressions/rolleye.gif

madape
05-12-2004, 03:18 PM
And as usual, it's complete bullshit.

The White House estimated that at the end of 2004, we would drop to 5.6% unemployment and that the payroll survey would be at 132.7M jobs (2004 Economic Report to the President, p98)

Currently, we are at 5.5% and 130.9M jobs.

If we average 225,000 jobs over the next eith months, we'll match Bush's forecast. After adding 337,000 jobs in March and 288,000 jobs in April, this is starting to look like a conservative estimate.

dude1394
06-05-2004, 11:32 AM
The bush BOOM BOOM BOOM continues and kerry continues to sputter non-sensical.


Best of all, Americans have been enjoying soaring take-home pay, thanks to President Bush's tax cuts.

That last factor, of course, is of critical import: Tax cuts have "led the expansion," says Heritage Foundation economist William Beech. And he's right.

Meanwhile, John Kerry sensing that voters strongly distrust his ability to conduct the War on Terror and keep America safe has hoped the public would rally to him on economic issues.

"America is still in the worst job recovery since the Great Depression," his campaign said Friday, nonsensically, following release of the strong job numbers.

But "pessimism" as a new Bush ad puts it "never created a job." The president, it would seem, has created plenty.

Good show.

BOOM!!!!!!! (http://www.washingtontimes.com/business/20040604-095524-2352r.htm)

http://images.washtimes.com/photos/web/20040604-103144-4229.jpg