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To: LindyBill who wrote (38934)4/11/2004 5:26:49 AM
From: LindyBill  Respond to of 793955
 
The Dangerfield Economy
This recovery can't get no respect.
WSJ.com
Sunday, April 11, 2004 12:01 a.m.

The report of roaring job numbers for March, along with the sharp upward revisions for the previous two months, was good news that even the chattering classes couldn't deny. Then again, give them a day or two and they'll have us back in Hooverville. Like Rodney Dangerfield, this is the recovery that can't get no respect.
By nearly every objective measure, the U.S. economy is strong and getting stronger. Just look at the Misery Index, the measure created by the late economist Arthur Okun adding the rates of unemployment and inflation. This may not be the most sophisticated of metrics, but it does capture the two greatest threats to household wealth and security. And it's indicating that, comparisons to the 1990s' bubble years excepted, the U.S. economy is doing very well.

Today's unemployment rate of 5.7% is close to the level Bill Clinton boasted about as he sought re-election in 1996. Meanwhile, inflation has fallen by a full percentage point over the past eight years. As the nearby table shows, the economy compares favorably by re-election standards and President Bush's policies should be enjoying at least a modicum of respect.

Instead, the media have done a terrific job of convincing everybody that these are the worst of times. A poll conducted by the American Research Group in mid-March found that 44% of Americans believed that the country was still in a recession. That's passing strange when you consider that the last recession ended way back in November of 2001, and for the last two quarters of 2003 the U.S. economy grew at an annualized rate of 6.1%, the fastest in 20 years. Even more remarkable, the percentage of gloomsters was higher in March, when we now know 308,000 new jobs were being created, than over the previous three months.
The angst is also hard to fathom given that Americans are richer than they've ever been before. Household wealth recently hit $44.4 trillion, an all-time high. A big part of that is due to the stock market's 35% recovery last year, as well as rising property prices. OK, not everyone is convinced that the real estate market will hold up, and we're also concerned that price signals are warning that Federal Reserve policy has been too accommodating. Nevertheless, when a record 68.6% of households own their own homes, that should at least create a feeling of security.

And it's not just asset prices that are rising. Household income is up 4.1% year on year, driving even bigger gains in disposable income and consumption. Corporate profits also hit a record level in the fourth quarter of last year, and are expected to rise at a more than 15% clip in the first quarter of this year.

So why are Americans feeling so peevish? One possible explanation is that globalization has brought on increased job turnover, and the experience of losing a job, even if another one is found, can be profoundly unsettling. The only problem with this theory is that the "churn rate," the process of creative destruction by which declining industries shed workers and rising ones snap them up, has been falling since the middle of 2001.

Les Miserables
The "misery index" (inflation plus unemployment) in Presidential re-election years

Year Inf. Unemp. Misery
index
1976
Ford 5.8% 7.7% 13.5%
1980
Carter 13.5% 7.1% 20.6%
1984
Reagan 4.3% 7.5% 11.8%
1992
Bush I 3.0% 7.5% 10.5%
1996
Clinton 3.0% 5.4% 8.4%
2004
Bush II 2.0% 5.7%* 7.7%

*Unemployment rate in March 2004

Source: Club for Growth




That leaves the inescapable conclusion that the problem is perception. This pessimism is understandably fed by Democrats who want to retake the White House. But it's also flogged by a media that can't seem to admit that the real news of the past three years is how well the U.S. economy has weathered the shocks of a huge stock-market blowoff, September 11, business scandals and the long prelude to war in Iraq.

Contrast this to 2000, when nearly all economic coverage portrayed only sunshine even though the stock market plunge had begun in April of that year. The National Bureau of Economic Research now fixes the onset of recession at March 2001, meaning that the economy was heading down long before the Bush Administration took office.

This year's favorite bad news story has been the job market, especially outsourcing. Yet few bother to report that government data show that the U.S. is actually a net recipient of outsourcing jobs, and this surplus is widening. The growing trade in services helps the economy because American companies are market leaders in many high value-added niches.
For those who fear that the U.S. will somehow be stripped of high-paying jobs, consider how manufacturing, which was also supposedly in terminal decline in the 1980s, is again coming back. Early this month, an important factory index showed a high level of hiring, and output is at 20-year highs. High productivity growth has kept American manufacturers competitive, even in the face of low-wage competition.

Speaking of productivity growth, it's worth noting how little positive coverage this is attracting. Throughout the Reagan years when job creation was strong, the critics complained that productivity was lagging. Now that productivity is surging but employment has taken longer to bounce back than in other recoveries, the good news is again lost in the noise of lamentations.

Still and all, by November the American people will have had ample time to figure out the good news behind this smokescreen of negativity. Sooner or later, the Dangerfield economy is going to command some respect.

Copyright © 2004 Dow Jones & Company, Inc. All Rights Reserved.



To: LindyBill who wrote (38934)4/11/2004 11:54:20 AM
From: KLP  Respond to of 793955
 
MEMO PUTS SPY AGENCY, NOT BUSH ON THE SPOT

By DEBORAH ORIN
nypost.com

April 11, 2004 -- ANALYSIS

The CIA's Aug. 6, 2001 memo for President Bush should pose serious new credibility problems for the nation's spy agency, not for Bush.

Democrats such as 9/11 commissioner Richard Ben-Veniste have sought to paint the memo as a CIA warning that Bush ignored a month before the terror attacks - but it turns out to be nothing of the sort.

Far from sounding the alarm about an imminent risk that al Qaeda would hijack airplanes, the CIA pooh-poohed the idea as a "sensational" claim that couldn't be verified.

"We have not been able to corroborate some of the more sensational threat reporting such as that from a [foreign intelligence] service in 1998 saying that [Osama] bin Laden wanted to hijack a U.S. aircraft to gain the release of "Blind Sheik" [Omar Abdel-Rahman] and other U.S. extremists," the CIA wrote.

That foreign intelligence report came in while Bill Clinton was president, but three years later the CIA had found nothing to back it up and thus seemed to downplay it - the very opposite of issuing a red-alert to Bush.

In cataloging potential risks from al Qaeda at Bush's request, the CIA made no mention at all of the threat that planes could be turned into flying bombs, although we now know that idea wasn't a total novelty.



The CIA also reassured Bush that the FBI was conducting "70 full field investigations" across America into al Qaeda and that the CIA and FBI were checking out two recent warnings.

The CIA's bottom-line message to Bush was that yes, bin Laden was out to get America as he'd been for years but all known threats were being checked out and the FBI and CIA were on the case. The CIA didn't urge further action.

Particularly after the CIA's intelligence failures on Iraq's weapons of mass destruction, this memo should spark very tough questions from the 9/11 commission to both the CIA and the FBI.



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Copyright 2003 NYP Holdings, Inc. All rights reserved.


Sen. Bob Graham (D.-Fla.), chairman of the Senate Intelligence Committee, told HUMAN EVENTS May 21 that his committee had received all the same terrorism intelligence prior to September 11 as the Bush administration.

"Yes, we had seen all the information," said Graham. "But we didn't see it on a single piece of paper, the way the President did."

Graham added that threats of hijacking in an August 6 memo to President Bush were based on very old intelligence that the committee had seen earlier. "The particular report that was in the President's Daily Briefing that day was about three years old," Graham said. "It was not a contemporary piece of information."

Graham's comments contradicted combative statements made recently by the Democratic congressional leadership, and confirmed White House assertions that the only specific threats of al Qaeda hijackings known to the President before September 11 came from a memo dating back to the Clinton Administration.

'Not Surprised'

A leak to CBS News of some pre-September-11 warnings given to the President in August occasioned fierce political attacks on Bush beginning May 15--even though the basic content of the leaks had long been known. As early as September 18, CNN had already reported that administration officials admitted to being aware of vague threats against U.S. targets before September 11. Also, a publicly available 1995 government report had even warned that terrorists could use airplanes in suicide attacks.

Still, Senate Majority Leader Tom Daschle (D.-S.D.) and House Minority Leader Dick Gephardt (D.-Mo.) both made public statements attempting to stoke a scandal on the supposition that Bush withheld vital intelligence from Congress both before and after September 11. Both Democrats strongly implied that Bush sat on information that could possibly have been used to prevent the terrorist attacks of September 11.

"I'm gravely concerned that the President received a warning in August about the threat of hijackers by Osama bin Laden and his organization," said Daschle. "Why was it not provided to us, and why was it not shared with the general public for the last eight months?"

Daschle also asserted that Congress did not have the same information as the White House--implying that the White House alone was to blame for not acting on the information. "I think it is important to emphasize we did not have identical information," he said in a May 16 news conference, in clear contradiction with Graham's statements to HUMAN EVENTS.

On May 22, Daschle again accused Bush of hoarding information, even trying to blame him for the FBI's intelligence failure of September 11. "There is an increasing pattern that I find in this administration that reflects an unwillingness to share information not only with us but within their own administration," he told reporters.

Gephardt also implied that the administration was blameworthy for its handling of the intelligence reports. "The reports are disturbing that we are finding this out now," he said. Invoking language of the Watergate era, he continued, "I think what we have to do now is to find out what the President, what the White House knew about the events leading up to 9-11, when they knew it and, most importantly, what was done about it at that time." Gephardt also stated that Congress had not received the same intelligence as the White House.

Asked by HUMAN EVENTS on May 22 whether Sen. Graham's statement changed his view, Gephardt responded with a simple "No" before retreating into the House chamber. Again, the following day, Kori Bernards, a spokeswoman for Gephardt, declined to comment for the record on Graham's statement.

Other Democrats sensed a political opportunity and went on the attack. Sen. Hillary Clinton (D.-N.Y.) addressed the Senate waving a copy of the New York Post with a characteristically large and sensational headline, "Bush Knew." "The President knew what?" she asked.

Others, including Sen. Dick Durbin (D.-Ill.), Rep. Jerrold Nadler (D.-N.Y.) and Rep. Robert Wexler (D.-Fla.) strongly denounced the President's conduct in public spoken or written statements.

But as early as May 16, it had already emerged that most of the information in Bush's August 6 Presidential Daily Briefing--an official intelligence document--had in fact been given to the congressional committees in the form of the Senior Executive Intelligence Digest (SEID), a more widely published classified document.

"Mr. Gephardt said that we didn't have information," said Rep. Porter Goss (R.-Fla.), chairman of the House Intelligence Committee, on May 16. "In fact we do have it. And it's just apparently that Mr. Gephardt didn't know about it."

At that point, Democrats claimed that Bush's intelligence report had information warning of possible hijackings by Osama bin Laden's al Qaeda network, and that Congress did not receive that particular information.

But the Democrats' criticism appeared to be further undercut by Graham's confirmation to HUMAN EVENTS that the committee did have the same intelligence. Administration officials had earlier said the hijack warnings in Bush's August 6 briefing were merely an analysis based on old intelligence from 1998.

The committees were indeed aware before September 11 that a major attack could come soon, so much so, that Sen. Graham told CNN's Kate Snow…quot; on the afternoon of September 11…quot; that he was not suprised.

"I was not surprised that there was an attack, was surprised at the specificity of this one," Graham said in the interview, hours after the attacks.

Expected Backlash

As Democrats appeared to back away from the attacks on Bush over the weekend, Republicans went on the offensive to capitalize on an expected backlash. The Republican Study Committee, a group of about 75 conservative Republicans, released a memo detailing House Democrats' overwhelming opposition to intelligence funding since 1996. According to the memo, 154 House Democrats voted to cut the U.S. intelligence budget in 1996, while 158 Democrats did the same in 1997. Although fewer Democrats voted to cut the intelligence budget in 1999 (only 61), almost all opposition to intelligence spending came from Democrats.

The memo also quotes several Democrats opposing intelligence spending, including Rep. Maxine Waters (D.-Calif.), who advocated the abolition of the CIA on the House floor in March 1997.

In addition, a HUMAN EVENTS survey of lawmakers found that few--even among Republicans--would have been willing to act decisively on threats of hijacking by Muslim extremists. Not one Democrat surveyed would countenance the idea that President Bush, upon learning of the al Qaeda hijacking threat, should have suspended the visas of young men visiting from nations that are al Qaeda hotbeds--even though this measure would likely have prevented the attacks of September 11.

Few support that action even now, after September 11, when new warnings of attacks by al Qaeda have been issued by FBI director Robert Mueller and Vice President Cheney.

--------------------------------------------------------------------------------

Copyright © 2003 HUMAN EVENTS. All Rights Reserved.