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Thursday, 01 December 2005 12:00 AM

Leave it to The New York Times to rain on the U.S. economic parade - something it rarely did when Bill Clinton was in office.

On Nov. 30, 2005, the newspaper published a page-one story titled "Upbeat Signs Hold Cautions for the Future."

But that was the same day that consumer confidence shot upward and U.S. home sales increased in value. It was also the day before revised government figures showed third-quarter growth climbing to 4.3%.

Publishing a story that omits those positive points is questionable at best, but that's what The Times does, leaving reasonable readers to wonder if the paper is simply ignoring any good economic news that results from George Bush's presidential stewardship.

Under the contentiously titled subhead "Up for Now," The Times surmises that behind every good piece of economic news, there is a compelling story that should temper Americans' enthusiasm for the nation's economic progress.

"For every encouraging sign, there is an explanation," says The Times.

"Consumer confidence is bouncing back from what were arguably some of its worst readings in years. Gasoline prices - the national average is now $2.15, according to the Energy Information Administration - have fallen because higher prices held down demand and Gulf Coast supplies have been slowly restored."

Even the latest data on home prices and manufacturing growth can't be trusted, according to the paper.

"The latest reading on home sales, released yesterday, contradicts most recent measures of housing activity, which generally indicate a slowdown," says the paper. "And, yes, manufacturers' fortunes are on the mend, but few besides airplane makers are celebrating."

Now, a cynic might wonder about good economic news under the Clinton Administration.

In fact, a simple Google search using the terms "Clinton, Economic Boom, and The New York Times" generates a whopping 1,250,000 hits.

Now throw the terms "bull market" or "prosperity" into the mix. When you do, the former produces 1,040,000 hits, while the latter shows 1,050,000 hits.

But that's not stopping The Times from badmouthing the current economic environment.

Says the paper: "It all means the economy is likely to end the year with a splash. But before you splurge on a new car, consider this: Many economists do not expect the party to continue, especially if the Federal Reserve continues taking the punchbowl away and raises interest rates. That could further slow the housing market, damp consumer spending and crimp corporate profits."

Citing government figures showing that GDP growth is expected to slow in 2005 compared to 2004, The Times says the housing market will lose steam and hurt the American economy in 2006.

"The two major concerns are the extent of slowdown in housing and how it can feed into growth and consumer spending," Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., tells The Times.

So the NYT seems to give little credence to any optimistic economic news. Three straight positive economics report are "inconclusive" to the paper. What matters now, it says, is the jobs report due out Friday from the U.S. Department of Labor.

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Conservatives love to mock former President Lyndon Johnson's "Great Society," calling it a typical liberal-government spending spree that solved nothing and merely wasted taxpayer dollars.

But according to the right-leaning Cato Institute, President George W. Bush makes LBJ look like a piker in the wasteful-spending department.

In a report released this week by Cato titled "Bush Beats Johnson: Comparing the Two Presidents," the think tank says that discretionary spending has risen 48.5% during the Bush years, a little bit higher than the 48.3% rate during LBJ's entire term in office.

The Bush numbers are also significantly higher than the 21% jump in spending recorded during the Clinton presidency. Cato cites Ronald Reagan as the thriftiest president, pointing out that he cut non-defense spending by 9.5% during his administration.

But the Bushies don't like the comparison, Cato says.

"Bush administration officials argue that hikes in discretionary spending are needed for the war on terrorism domestically and abroad, including Iraq and Afghanistan," says the report.

"However, this alone does not explain increases in the overall defense budget. In all, this only accounts for 16% of combined defense spending over the past four fiscal years."

Cato adds that the spending spree should accelerate next year when the bulk of the federal aid for Hurricane Katrina victims will be factored into the government spending numbers.

Such assistance could top $200 billion, Cato says.

For the first time in five years, the European Central Bank lifted its benchmark policy rate from 2% to 2.25%.

The news, which was widely expected in financial markets, left the European currency trading slightly lower against an all-around stronger dollar.

The ECB clarified that it made the move because it now expects inflation to miss its self-imposed 2% target during the next two years.

But ECB President Jean Claude Trichet stated afterward that policy would continue to remain accommodative despite the need for this gradual adjustment.

Many European leaders cried foul at the news as the bank lifted rates from a six-decade low. Many politicians claim that the Eurozone economy remains too fragile to handle the move.

The next move higher may not come until March, according to economists.

But all this may not be enough to prevent further currency weakness against the dollar, since the ECB is making plain that yields won't rise too high.


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Leave it to The New York Times to rain on the U.S. economic parade - something it rarely did when Bill Clinton was in office. On Nov. 30, 2005, the newspaper published a page-one story titled "Upbeat Signs Hold Cautions for the Future." But that was the same day that...
Thursday, 01 December 2005 12:00 AM
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