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After a twenty-eight years in which interest rates dropped from 18 percent to 4%, the stock market increased at 12 percent a year and home values increased at 5% a year, we do have a problem.

The stock market has not incrased at all in the last four years. Home values are collapsing and interest rates are going up.

Why?

In 1931, the democrats increased the maximum tax rate from 24% to 63% causing a difficult recession to catapult into the great depression, a little know historical fact.

If Barak Obama wins (the gamblers rate this a two to one outcome) and enacts his plan, from 1988 to now, the democrats will have increased the maximum tax rate from 26% to 52%.

The economy is already reflecting these depression economics.

We are in trouble. We now have a European economy. The Reagan economy is over.


Easterbrook is correct on the dangers of nostalgia and I certainly would trust more in the medical care I would receive now then say 40 years ago, as long as I actually had a good health insurance plan. He is also correct that people get a negative view of certain issues because of the media coverage, however he overlooks the fact that most people get there news primarily from local news which focuses on crime and disasters not on economic or environmental issues.

What Easterbrook also misses is that people expect things to be continually improving so when people see their wages stagnate this creates unease. Also, he poo-poos serious things like the large consumer debt and the housing bubble which are certainly not "at the margins" of the economy.

Also, people are often somewhat aware that the US has fallen behind in several areas compared to other countries so the issue is not just comparison to the past in the US.

It is worth noting that in some areas, such as unemployment, simply comparing today's numbers to the past is not adequate. For instance, starting under Reagan and finishing under Clinton there was a continuous redefinition of unemployment which minimized the issue. Also the CPI and poverty levels have been continuously altered to paint more optimistic pictures.

Finally, he mentions the affect of the occupation of Iraq or as he puts it the fact that "bloody and costly war being fought for no clear purpose depresses the national mood" but clearly does not seem to understand the extent that this is causing a great deal of negativity in the nation - both because the war is continuing but also because most people want us out but no one in Washington is doing a damn thing about it.

The idea that if you ask people about their personal experience they say that it is good is a relative experience.

If you ask the people at my work who got pink slips the last month, what they think about the economy, they would tell you that it is the pits.

If you ask my neighbors about the declining housing values in the community, they will tell you it sucks.

If you ask me about the $4 gas I will tell you it is a rip off.

All politcs is local.

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