Thursday | January 30, 2003
Latest results of Bush's War on the Economy
The markets got hammered today, in part because of the disaster that is AOL-Time Warner, but also because the economy continues to suck.
The fourth quarter of 2002 clocked in at a barely perceptible 0.7 percent, most of that growth coming from defense spending. Consumer spending, which has single-handedly propped up the economy this past recession, grew only 1 percent -- the smallest percent increase since 1993. Consumer spending had remained strong even during the 2002 contraction.
We have now had five straight quarters of growth, but it remains a jobless expansion. New jobless claims in January came in at 397,000. Remember, that's new claims. At least one economists in this NYT piece expects the unemployment rate to reach 6.4 percent.
And given the anemic growth in the 4th quarter -- the Christmas quarter no less, there's a lot of fretting over a double-dip recession. Of course, in Bush's world this is further evidence that a tax cut is necessary. But given the $400 billion deficit we may be facing by the end of the year, Bush's hasn't given himself much breathing room.
The markets, having taken a look at the data, are betting the economy will continue to lag. I am not an economist, so I won't predict one way or another. But one thing is pretty clear -- that war or no war, this will be a rough year.
Here's hoping that all of us make it through the year without becoming casualties of Bush's War on the Economy.Posted January 30, 2003 04:48 PM | Comments (19)