The Good Word

When the Heathens rage and forces of Evil and Ignorance gather, it's time to to look to the heavens for guidance. And no one can testify like Brother Krauthammer:

The fact is that Presidents have very little effect on the state of the economy. Sure, they can affect trade policy, regulation, the environment and, of course, foreign policy. But the economy? With globalization, trillions of dollars flow daily in and out of financial markets. One dollar in 10 is now involved in foreign trade. All advanced economies are subject to huge outside forces beyond a President's control. Moreover, U.S. Presidents have even less economic control than most other democratic leaders. The President does not control the money supply; the Federal Reserve does. Presidents cannot dictate their own budgets (as Prime Ministers can in parliamentary systems like Britain's); here, Congress has the ultimate say. Even worse, more than half the federal budget goes to entitlements and "transfer payments" like Social Security, where government is merely a conveyor belt transferring money from younger workers to older folks. What is left, "discretionary" spending, is a mere 8% of the $11 trillion economy Presidents are reputed to control.

All of which makes American presidential elections a competition in mythmaking. What exactly did the first George Bush do that made him responsible for the mild recession of 1991 that cost him the election of 1992? Today the Democratic mantra is that the second George Bush has cost the economy nearly 3 million jobs. (The numbers keep changing. It is now down to 1.8 million jobs lost.) However, 94% of net job losses to date occurred during the first year of the Bush Administration. Can anyone seriously argue that an Administration that had barely come into office and whose economic plan had barely been enacted caused those job losses? If they are to be attributed to anyone it should be to Clinton, who had "run" the economy for the previous eight years. But that too would be unfair and irrational. The losses were a result of autonomous economic forces — the Inter-net bust and the subsequent recession — followed by autonomous political events like 9/11 and the war on terrorism.

Deacon Purple, being likewise strong in the Word, sent me this message from On High, and it seemed likewise marvelous unto mine eyes:

Tax-cut opponents may call the economic slide of 2001 “the Bush recession,” but the Federal Reserve was worried about recessionary indicators as far back as 1998, more than two years before President George W. Bush took office.

According to 1,065 pages of Federal Open Market Committee transcripts released in late April (after a five-year embargo), Fed chairman Alan Greenspan worried privately about deteriorating economic conditions well prior to Bush’s election or candidacy, with FOMC members repeatedly expressing concerns about the manufacturing sector.

“The economy has been holding up,” Greenspan said in a Sept. 21, 1998, teleconference, “but it is now showing clear signs of deterioration, including anecdotal indications of some softening that we are now picking up at an increasing pace.” This September meeting was called to discuss the first of three consecutive monthly reductions in the federal funds interest rate. The last time the Fed took such action was in late 1991, the year the last recession ended.

The transcripts supplement economic data that show serious problems in the private manufacturing sector well in advance of the recession, which lasted from March to November 2001.

Manufacturing employment, an important indicator, peaked in March 1998. Fed bank presidents representing districts in industrial states (Michigan, Ohio, Wisconsin, and Pennsylvania) are quoted in the 1998 transcripts discussing manufacturing problems in those regions.

At the Aug. 18, 1998, FOMC meeting, Chicago’s Michael Moskow referred to “weakness” in durable-goods manufacturing employment. Anecdotal evidence of such weakness was discussed at two FOMC meetings the following month.

“While the economy is operating at a relatively high level,” said Philadelphia’s Ed Boehne on Sept. 21, “I have sensed a notable change of sentiment in recent weeks. It had been largely in the manufacturing area, but it now appears to have spilled out into broader sectors of the economy.”

On Sept. 29, Fed economist David Stockton noted “pronounced weakness” in factory employment, explaining that reports “seem to be pointing to a continued sluggish manufacturing performance.”

And so, my Brothers and Sisters, when the Ungodly come unto you, ranting and raving of Presidents and their Ruinous Effects on Economies, and lost jobs, and starving children working in sweatshops and wandring barefoot in the streets, listen not unto them for they know not whereof they speak. For verily I say unto you, it is Congress which is the Great Whore of Babylon that sits astride the Hideous Beast Deficit.

For What Doth the Good Book Say About Lying Signs and Wonders?

Even him, whose coming is after the working of Satan
With all power and signs and lying wonders,
And with all deceivableness of unrighteousness in them that perish;
Because they received not the love of the truth, that they might be saved.
And for this cause God shall send them strong delusion, that they should believe a lie."

Update: Brother Prather hath some further words on this subject over at Insults Unpunished.

- Sister Cassandra