Bush Recovery Rolls On
Stocks rallied today based on Federal Reserve Chairman Ben Bernanke’s testimony. First, here’s what Reuters reported on the Dow record close:
Stocks soared on Wednesday, sending the Dow Jones industrial average to an all-time high, as investors drew confidence from Federal Reserve Chairman Ben Bernanke’s comments that inflation is poised to ease while the economy grows moderately.
Based on the latest available data, the Dow Jones industrial average gained 86.53 points, or 0.68 percent, to unofficially end at 12,741.38, a record closing high. The Standard & Poor’s 500 Index rose 11.02 points, or 0.76 percent, to finish unofficially at 1,455.28, a fresh six-year high. The Nasdaq Composite Index was up 28.50 points, or 1.16 percent, to close unofficially at 2,488.38.
Here’s what Reuters reported on Bernanke’s testimony:
Bernanke, delivering the Fed’s first economic report for 2007 to Capitol Hill, offered a mostly upbeat assessment of the economy’s outlook. Besides improvements on the inflation front, the Fed chief also cited some signs of stabilization in the ailing housing market.
“Overall, the U.S. economy seems likely to expand at a moderate pace this year and next, with growth strengthening somewhat as the drag from housing diminishes,” the Fed chief said in prepared remarks to the Senate Banking Committee. Currently, interest rates are at a level that is “likely to foster sustainable economic growth and a gradual ebbing of core inflation,” he added.
Larry Kudlow of Kudlow & Company opened his show by saying that Bernanke had embraced Goldilocks and we might be looking at a “runaway bull market”, something that Bob Pisani agreed with in his report from the NYSE floor. With the deficit shrinking with each new forecast even while we’re fighting an expensive war, and with forecasts predicting a balanced budget by 2012, a case can be made that the Bush recovery, spurred in large part by the Bush tax cuts, is a sturdier, more sustainable economy than was the Clinton economy.
Another thing that will eventually happen is that we’ll secure Iraq, which will allow us to bring our troops home and dramatically reduce our military expenditures. The bottom line is that the sooner we clean up Iraq, the sooner we’ll run surpluses. After all, Bernanke said that we should see sustainable growth for the rest of Bush’s administration.
Meanwhile, this week’s news should scare Democrats. We’re getting conflicting reports on whether al-Sadr left Iraq with it being most likely that he left for Iran. That means that there’s a strong chance of eliminating most of the sectarian violence, especially in Baghdad. We have the economy running strong. Then you factor in a rapidly shrinking deficit with sizable surpluses in the near future and you’ve got a difficult terrain for Hillary to navigate.
Imagine the implications. Hillary’s shrill stump speeches where she’s advocating a return to Clintonomics, aka major tax increases, while caving to her anti-war base, won’t make for an appealing message. That isn’t to say that she won’t be a formidable opponent but it likely means that she’ll have to alter her scripted plans, which might mean disaster. As we’ve seen, she isn’t good at ad-libbing.
Technorati Tags: Economy, President Bush, Tax Cuts, Economic Growth, Election 2008, Hillary, Bill Clinton
Cross-posted at LetFreedomRingBlog
February 14th, 2007 at 4:26 pm
[...] Cross-posted at California Conservative Categories: Presidential Elections, Iraq, President Bush, Economy, Hillary, Taxes, Democrats, Election 2008 | [...]
February 14th, 2007 at 4:35 pm
[...] Original post by Gary Gross and software by Elliott Back [...]
February 14th, 2007 at 6:24 pm
Fed: Economy To Grow Modestly In ‘07…
Federal Reserve Chairman Ben Bernanke told Congress the economy should grow modestly this year and i…
February 14th, 2007 at 8:02 pm
Well, when you borrow your way out of a hole, things do look good… in the short term. But when you look at the long term, a different pictures emerges:
-the national debt has increased by 50% since Sept. 2001;
-real wages have barely increased in 7 years, with the average person taking home only $10 a week more than in 2001;
-the trade deficit has ballooned to more than $800 billion dollars, double what it was in 2001;
-foreign investment is increasing at an alarming rate (nearly double in 5 years), mostly as a result of our trade deficit;
-the airlines continue to bleed money, with Delta alone accounting for a $6.2 billion dollar loss;
-Chrysler announces a layoff of 13,000 manufacturing jobs; Ford is not making it, and GM is slipping in market share faster than you can say “hybrid”;
-and finally, retail sales are stagnant year-to-year.
Meanwhile, despite the escalation and promises of stability with a whack-a-mole al Sadr, 6 more soldiers die today, and even some Republicans come to their senses, saying of the surge: “the benefits were temporary, the body bags were permanent” (Rep. Ric Keller, R-FL).
Thanks, I’ll take more of that Clintonian peace and prosperity, a balanced and in-surplus budget, and real, sustainable growth. Imagine what Rudy/Mittens/Walnuts are going to campaign on as the war drags on, the economy falters, and the bills for Bush’s wild spending come due (but, hey, that’s for future presidents to solve).
February 14th, 2007 at 8:46 pm
Yeah, I can’t wait for the good old Dems to raise my taxes back up to pre 2000 levels. I make too much money any way and Im sure the federal government would spend it much more wisely than I would.
February 14th, 2007 at 9:01 pm
Someone’s got to pay for all that spending. Might as well be you and not your children or grandchildren.
February 14th, 2007 at 9:50 pm
zachary when you tell us what Clinton actually did to the economy then I will give you credit. Until then you are blowing hot air.
“real wages have barely increased in 7 years” …that is because there are more $99 cent stores with a new produce isle.
The raise in wages in California have sparked laying-off people who would have not been laid-off ( LA TIMES); and this means that people that use to make some money now make none. This is because of the incompassionate Liberals who love to see people get laid-off because it makes them wet.
February 14th, 2007 at 11:15 pm
Very simply: balanced the budget and left a surplus (which Bush squandered), with low inflation and unemployment despite the bursting of the tech sector bubble, a strong housing market, lower crime rates, a strong military… I could go on, but suffice it to say peace and prosperity.
What I can’t let stand is your assertion that liberals are not compassionate, which is an outright fabrication. Normally, conservatives whine (what they do best, by the way) about how touchy-feely we are, caring for the homeless, the infirm and the elderly, you know, the old bleeding-heart liberal. My rationale for pointing out the longest peacetime expansion in our history in this context is merely to state the obvious: a rising tide lifts all boats (if that’s what zawako meant by “makes them wet”). What is more compassionate than to include everyone in our national prosperity?
February 15th, 2007 at 9:29 am
“Someone’s got to pay for all that spending. Might as well be you and not your children or grandchildren.”
I’m still paying for the great “War on Poverty” which apparently didnt do jack given the size of the Social Services Department and the number of manic depressive bums stoned on prozac at our expense still wondering around.
I’d much rather leave my kids an estate free of other wealth redistribution schemes, and let them decide where and how to spend it.
February 15th, 2007 at 9:39 am
Mr. Gray, if you think all that money in the last six years went to something useful, I have a bridge to sell you.;-) Yes, I know, the Dems are not immune to pork spending but for a party I used to trust to at least be fiscally conservative, the last couple of years have been more than a tad disappointing.
February 15th, 2007 at 12:51 pm
Indeed they have, and that took the votes of both parties as I recall. Neither party would be immune from prosecution if fiscal irresponsibilty was a crime.
Irrerspective of Congressonal or executive addiction to pissing away money, I should think you would at least admit that the economy does not turn on the very second a new administration comes to Washington. Clinton’s prosperity was built partly on the residual effect of Reagans policies, just as the Bush administration spent the first 3 years digging out from the delayed effects of Clinton’s overtaxing. I seem to remember a bit of whining from your side about where were the jobs, during Bush’s first 3 years.
Yes, increasing taxes does create more revenues to a point; however, it eventually drives costs and layoffs higher, just as lowering taxes inreases disposable income, private spending and investments which eventually lead to higher revunue from a growing economy. A point, regrettably, which has yet to be allowed to happen, given your sides apparent inability, or perhaps unwillingness, to fully comprehend.
February 15th, 2007 at 1:43 pm
Mr Gray,
Actually, pinning my down to ‘my side’ is a bit difficult since I did vote for Reagan twice and for Bush 41 as well. I always look at *all* the candidates as possibilities. Sometimes, the Dems scare me, sometimes the Republicans, sometimes the balance of power needs to simply be adjusted to keep things from getting to the point where one parties ideologues dominates the discourse/decision making processs. But those are just my personal preferences in a nutshell. I could expound but don’t feel the need.
You are correct in that each president inherits and economy from his predecessor.
At some point, however, if you feel that a president somehow effects the economy, that president has to take responsibility for how things are going. You can’t, on one hand, say Reagan’s legacies were responsible for the remarkable performance of the market during Clinton’s administration (they weren’t in my view) yet say that Clinton’s tax policies were tremendously bad for the economy. For example, its much easier to explain the Clinton economy via a combination of reduced military spending (frees up of resources to the general economy) and ridiculously cheap oil (something he had not much control over).
To me, it seems each president has little effect on the economy since it largely seems to ignore their wishes. Probably their largest effect is through controlling the money supply and simply the budget. It’s tough to get new taxes and certainly no one wants them but the piper must be paid eventually. You can’t keep living on credit. Anyway, there are much more salient analyses of the economy and taxation out there for me to bother with in a comment section. ;-)
February 15th, 2007 at 6:23 pm
Matter of fact I do think Clinton’s tax policies, while not disastrous, were certainly not helpful. He might have just as well accomplished the same result by keeping income taxes where they were, eliminating the marriage penalty, and encouraging private investment and small business by cutting capital gains and interest taxes, and allowing credits for venture capital, startups etc.
Neither am I, perhaps, as open minded as you. Aside from axes, I trust neither party with much of any anything at the moment. I simply distrust Republicns less than Democrats.