Business

Published — September 23, 2008 Updated — May 19, 2014 at 12:19 pm ET

Defining the “fundamentals of the American economy”

Introduction

On September 15 — the day Lehman Brothers filed for bankruptcy protection, Merrill Lynch was purchased by Bank of America, and AIG faltered — John McCain said in a speech that “the fundamentals of the American economy are strong.” Later in the day he revised that statement, explaining, “We’ve got to fix this economy, which the fundamentals of are at great risk right now . . .”

Then Barack Obama weighed in, saying of McCain: “He doesn’t get what’s happening between the mountain in Sedona where he lives and the corridors of Washington where he works. . . . Why else would he say, today, of all days — just a few hours ago — that the fundamentals of the economy are still strong?” The Obama camp then followed up with an ad titled “Fundamentals.”

Back up a minute. While McCain and Obama are busy drawing political battle lines around the “fundamentals of the American economy,” we’re still wondering what those fundamentals actually are. Can we get a definition?

Looking for answers, PaperTrail called the U.S. Labor Department’s Bureau of Labor Statistics. A spokesperson chuckled when asked whether BLS tracked the “fundamentals of the American economy,” and said that that is “not a term that the BLS uses.” The Bureau does, however, collect a set of data known as Principal Federal Economic Indicators, which are a big helping of alphabet soup:

Consumer Price Index, Employment Cost Index, The Employment Situation (which includes the unemployment rate and payroll employment), Producer Price Indexes, Productivity and Costs, Real Earnings, U.S. Import and Export Price Indexes.

Calling those indicators “strong” might be something of an overstatement. It’s a pretty mixed bag — some are up and some are down, on a month-to-month basis — but compared to this time last year, most are going the wrong direction. The Consumer Price Index, for example, is up 5.4 percent since this time last year, which means that people are paying more for the things they’re buying. Real average earnings rose 0.6 percent in August, but are down 2.5 percent in the last year.

Another phone call to the Commerce Department’s Bureau of Economic Analysis revealed that the BEA also does not have a statistic or set of statistics called “fundamentals of the economy.” A spokesperson suggested looking at the Gross Domestic Product data, which BEA compiles, and which is frequently used as a proxy for the nation’s economic well-being. The closest thing to fundamentals PaperTrail could find at BEA is the “Overview of the U.S. Economy: Perspective from the BEA Accounts,” which includes GDP, personal income, U.S. Balance of Payments, and several other indicators.

Again, the numbers are a mixed bag. Personal income is down. The current-account deficit increased last quarter, which means the United States owes more money than it did a few months ago. GDP was up last quarter by 3.3 percent, but has been on a rocky road.

As the economic upheaval continues and the rhetoric heats up, these statistics, fundamental or not, may be the best snapshot of how the nation is doing.

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install itunes on windows 7Bob FrankstonLinda GordonET69Jello Beyonce Recent comment authors
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sam fetters
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sam fetters

What do AT&T, Verizon and Crown Castle International Corp have in common? The largest institutional shareholders of each includes firms like: Vanguard, BlackRock, State Street (the “Big Three”), Invesco, Fidelity (FMR), JP Morgan, Wellington Management, Geode, T Rowe Price, Bank of America, and other of the largest money-management and investment firms, whom operate collaboratively (even comprising the largest shareholders of each other), forming virtual monopolies amongst the largest “competing” corporations, in most every single industry, via large share holdings. (source = http://investors.morningstar.com/ownership/shareholders-major.html?t=CCI) These are the same firms whom also largely own the third largest telecom, T-Mobile. The own the largest… Read more »

Jello Beyonce
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Jello Beyonce

I’ve a theory that the supposed “Trade Wars” and “sanctions” and political/military strife going on between the U.S., China, Russia, etc. are merely distractions, serving to divert attention away from the growing authoritarianism and Oligarchic control spreading across the globe. “Nationalism” is being used as a propagandist covert means of continued increasing Globalism. As this article states: “A Russian woman stood up to speak at one of these public meetings, and she said that when she lived in Russia, the government slam dunked her and she had no say,” King said. “Now she lives in the United States of America,… Read more »

ET69
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ET69

Marx was right about capitalism . Capital gets more and more concentrated in fewer and fewer hands. There is no way out of this greed. We need socialism!

Linda Gordon
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Linda Gordon

5g is a kill grid. The depployment of this weapon is an act of terroism genocide and ecocide. The marketers need to be jailed as terrorists.

Bob Frankston
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The real issue with 5G is that it’s an attempt to roll back the Internet and return to the telecom of the 1970s when the phone company controlled all.

install itunes on windows 7
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I have read the post and it is really helpful as I have got to know about the 5G wireless cities which are accepting the technology and other cities which are rejecting it.