A professor explains. Unsurprisingly it's (you guessed it!) biased and lousy reporting.

Inflation during the Bush administration has been much like it was during the Clinton administration. Even so, back then, we liked the economy. Now we hate it. So, what exactly is the problem? The "record setting" budget deficits, perhaps? Not really. Stagnant wages? Maybe, but I doubt it. I'll take a look at these a bit later, but for now, my point is that any story you read about some aspect of the economy ought to include simple charts like these. Those two stories about budget deficits and stagnant wages -- like almost all stories about the state of economy -- don't do that. You can learn more from a few informative charts than you can from reading the words of a reporter who has an agenda that is advanced, not by showing you the actual numbers, but by using bumper-sticker slogans to create the impression that things are "spiraling out of control." Oh wait, that's the phrase reporters use to characterize Iraq. Well, they don't use charts for that purpose, either (and for the same reason).

As the first commentor pointed out, Presidents get far to much blame and credit for current economies.

Although I do recognize the issues which lead up to some of the numbers in the early part of the Bush Administration, the charts do show that Bush started out with a lousy economy that is now looking good. However, inflation rose before it declined and unemployment rose before it began its recent decline. I think the latter is very important, because unemployment (real or exaggerated) kept wages lower. At least in my sector, wages have not kept up with a higher energy cost or general inflation. The future certainly looks good, but the immediate past was no cakewalk.

Speaking of which, I recently wrote a short paper (as an excersize) that shows why the "top 1%" earners show such a higher earning growth rate than everyone else. The short version is that as long as productivity is distributed in some kind of Poisson distribution (easily verifiable and unchangeable) and income is linked to productivity (I think most people would prefer to live under such a system, and our system is demonstratably very close), this result is unavoidable (it comes directly from population growth).

Think about it - any distribution of any feature of humanity has a long tail. Ya know, the weirdos. That means that the more people you have, the farther out the exceptions are. The tallest person in China is taller than the tallest person in the US. Similarly, the tallest 1% of China is taller than the tallest 1% of the US. Translated to income, the more people you have, the farther out you can go in the tail before you get only half a person per bin - so the more people you have, the higher the highest income. A 1% population growth rate perfectly describes the top 1% income average grwoth rate... nothing sinister is needed.

Anyway, it is far easier to describe using graphs, etc. What would you do with such a paper?

The article cited by Rand dismisses the Budget deficit
without making any case for this claim.

Either we clean up the budget or we ultimately
fail as a society.

if people ar eunhappy, it's probably the negative savings rate.

A society built on credit cards is no more stable then an
empire built on borrowed chinese money