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Politics : Impeach George W. Bush -- Ignore unavailable to you. Want to Upgrade?

To: TigerPaw who wrote (1606)	2/5/2001 2:45:58 PM
From: Mephisto	Read Replies (1) \| Respond to of 93284

TP, I am not surprised. Bush lacks Mr. Clinton's knowledge and he cannot concentrate on details the way Mr. Clinton could do. There is a story that Mr. Clinton called a policy meeting on a Sunday morning. I forget what it was about but the people who made the presentation were put out that they had to go to the White House on Sunday morning, and while they made their presentation Mr. Clinton worked on The NYTimes Sunday crossword. This went on for about 20 minutes b4 Mr. Clinton looked up and asked a question that no one in the group had thought about! (g) It is not a secret that Mr. Bush has never had an interest in what goes on around him. "According to Democrats in the room, Bush stumbled as he answered the last of a series of nine questions by House Democrats. "He was boxed into a corner," said Rep. Allen Boyd, D-Florida. Others said the president seemed uncomfortable, with one noting, "He turned bright red." "

To: TigerPaw who wrote (1606)	2/5/2001 11:33:09 PM
From: Mephisto	Read Replies (1) \| Respond to of 93284

Good take on recession: February 4, 2001 The Mystery of Economic Recessions By ROBERT J. SHILLER N EW HAVEN — A great embarrassment for modern macroeconomic theory is that it has never achieved any consensus on the basic questions of what makes the stock market rise or fall and what ultimately causes recessions. Today, there is great debate over whether a recession is in the offing — and if there is a recession, how long it will last. Already, signs of an economic downturn are all around — a depressed stock market, layoffs in several business sectors. That's why many Americans looked with relief toward Alan Greenspan and the Federal Reserve Board, which last week cut the benchmark interest rate by half a percentage point for the second time in a month. But will the Fed's action prevent a recession? It's difficult to tell. Economists know what economic indicators correlate with recessions — stock market declines often precede them, for example. And we know that most movements in the stock market haven't made any straightforward sense as a rational response to interest rates or to news about future profits or dividends. But we have not been able to pinpoint what ultimately causes recessions — probably because the causes are psychological and thus intangible. The renowned British economist A. C. Pigou wrote in 1929 that psychological factors account for about half of fluctuations in industrial production: he spoke of "psychological interdependence," "sympathetic or epidemic excitement" and "mutual suggestion." His judgment seems about as good today as in 1929 — and the factors he described are still not easily measured. Absent any scientific consensus about the ultimate source of economic fluctuations, oversimplified theories abound. Today's example is the popular theory that the Fed controls everything — that the raising or lowering of interest rates alone causes the economy's ups and downs. The record 14 percent one-day increase in the Nasdaq index on Jan. 3, after the Federal Reserve Board made its first half-point cut in interest rates this year, suggests how strongly some investors buy into this theory. Of course, the Fed's management of interest rates does have an important role in the way recessions play out, but it would appear unlikely that anything the Fed actively chooses to do will actually disrupt the economy. Something else is driving the periodic recessions. A recession is generally related to a decline in confidence, a decline that makes consumers less willing to spend and businesses less willing to invest and to employ workers. Eventually we see layoffs and rises in unemployment. The recent string of layoffs and the January decline in manufacturing employment are ultimately due to a decline in confidence. There are some efforts to measure confidence systematically, notably the Consumer Confidence Index published by the Conference Board. It is based on answers to just five survey questions, about respondents' assessments of business and employment conditions, now and in six months, and of the likely family income in six months. Surely many respondents to these surveys are reflecting what they hear on the evening news, rather than probing their inner psyches. The index, as simple as it is, however, has been shown in a number of studies to contain valuable information for forecasters. A decline in confidence is a useful predictor that consumer spending will drop. And in the past few months, the index has had its greatest decline since the recession in 1990 and 1991. This suggests some trouble ahead. Part of our confidence in the past few years has been an exaggerated national faith in Alan Greenspan. This faith may have grown up in part because of the success of the interest rate cuts that he undertook to support the stock market just after the Oct. 19, 1987, crash. It may also stem from the 1998 interest-rate cuts after the Long Term Capital Management debacle, in which the failure of a big hedge fund threatened to cause a chain reaction of bankruptcies. Mr. Greenspan has come to symbolize support for the new economy, and he is an essential part of the current story. But public confidence based on belief in the acumen of one 74-year-old man cannot be secure. Many critics, in fact, are now going far in the other direction, viewing Mr. Greenspan as the principal cause of the current downturn because of the Fed's persistence in raising interest rates until well into 2000. Solid confidence is ultimately based on knowledge, on an understanding of underlying mechanisms and a mental accounting of the reasons for security. The problem today is that the economy is in such a cockeyed and unusual situation that it is easy to imagine that confidence could soon erode a great deal. After 1982, the Nasdaq stock price index moved in a smooth upward arc, rising at a higher and higher clip, until March of last year, and since then it has fallen roughly in half — as classic a bubble-and-burst pattern as there ever was. Broader stock-price indexes have followed a similar, though less dramatic, ascending arc since 1982, and real estate prices are also inflated. There have been no bursts yet, but these situations, too, look so much like bubbles that it is hard to imagine how confidence could be secure going forward now. So are we likely to have a recession? Some factors suggest that we might. Our economic expansion of the past 10 years has been fueled by some trends that may not be sustainable. One is a historic decline in the average rate of personal savings, from more than 8 percent of income saved each year in 1991 to no saving at all in December 2000 — in fact, to households' spending more a year than their income. Another is high borrowing. The debt burden of the average American household (especially mortgage debt) has risen to record levels. The problem for forecasters is that we are, by these measures, largely out of the range of our historical experience. When we are out of range, past examples cannot be reliable guides to the future. Lacking an established theory of the ultimate causes of economic fluctuations, forecasters tend to rely on simple extrapolation of trends or on assumptions that past patterns will repeat themselves. But we are in a moment when confidence and market psychology are changing fast. Surprises — perhaps a serious recession — could be in store for us. Robert J. Shiller is an economics professor at Yale and author of "Irrational Exuberance." nytimes.com