BusinessWeek reports that our economy is rock solid.
The economy clocked in at a 3.8 percent pace in the final quarter of 2004 -- faster than initially thought -- and is now cruising at that speed or better. That could be good news for jobless people hoping for companies to increase hiring.
In the newest reading on the economy's fitness, the gross domestic product exceeded a previous estimate of a 3.1 percent annual growth rate for the October-to-December quarter, the Commerce Department reported Friday. GDP measures the value of all goods and services produced within the United States.
"We are now at a comfortable cruising altitude," said Lynn Reaser, chief economist at Banc of America Capital Management. "What is significant is that all parts of the economy were pulling their own weight."
What gets the credit for this strong economy? (Sidenote: strong despite the claims of many just a few months ago who said that Bush had ruined the economy, as a Pittsburgh Post-Gazette election editorial shows.)
I mentioned in yesterday's post that a former client called me to work on a project. That client, whom I will not name, last used my services in 2001. They owed me about $7,000 when the project was over, but it was fall and 9/11 had just occurred. Some of their clients were in lower Manhattan, and because they weren't getting paid, I wasn't getting paid. It took about 6 months to collect all of the money due me.
If I asked you to fill in the blank, would you get the right answer? Here's the oft-repeated statement: "Markets hate _______________."
If you said "uncertainty," then you would be right. And 9/11 was a horrendously de-stabilizing force that created uncertainty.
But today, we haven't had a terrorist attack in over 3 years. In fact, we're on the offensive, and we're installing democratic thoughts in the Middle East. Even Lebanon, as told to a journalist for the Washington Post and cited in the Quad City Times.
Over the years, I've often heard him denouncing America and Israel; but these days, in the aftermath of Hariri's death, he's sounding almost like a neoconservative.
He says he's determined to defy the Syrians until their troops leave Lebanon and the Lahoud government is replaced.
"It's strange for me to say it, but this process of change has started because of the American invasion of Iraq," explains Jumblatt. "I was cynical about Iraq. But when I saw the Iraqi people voting three weeks ago, eight million of them, it was the start of a new Arab world."
Jumblatt says this spark of democratic revolt is spreading. "The Syrian people, the Egyptian people, all say that something is changing. The Berlin Wall has fallen. We can see it."
Partially, I give the credit for our strong economy to our country's reaction to 9/11, which is becoming a period of increasing stabilization, especially in the wake of the spread of democracy.
Partially, but not as much, I give the credit to tax cuts.
Partially, I give credit to the Federal Reserve's handling of interest rates post 9/11. Very helpful.
All of this builds confidence, which spurs people to feel safer to spend money, which is why when I took this gig with my former client, I didn't have any concerns about payment. This is a different, and better, time.