The dog wags back!

A sometimes funny, somtimes angry, but mostly progressive, blog on the politics and issues of Pittsburgh, Pennsylvania and America.

Tuesday, October 26, 2004

So what

I hate to say it, but a President really doesn't make a difference in the performance of the economy. In the United States, GDP in the US has consistently increased regardless of who has held the White House.

OK, now back to reality. The economy grows no matter what the President does, at least in terms of GDP. Where a President can make a difference is whether growth in GDP gets translated into jobs and income. As we have seen, with the current Administration, there is a disconnect between the growth in corporate profits and GDP and the loss of jobs.

Later we will examine how the economy is performing in terms of the international balance of payments and the import and export of goods and services. Here is one thing to consider, economists often talk about how imports are good for consumers - that is true in the short term because goods become cheaper. It is in the long-run that the full price of these cheap goods come due. When exports are shrinking, and more and more money flows out to pay for imports, there is less money to grow the local economy. In economic terms, the outflow of income to pay for imports is called leakage. The next installment will examine what is happening in terms of imports and exports.