Afew things I learned about economics in 1993:
- If you wait around long enough, things will improve. The economy was terrible last winter, anemic last spring, better last summer and much better this fall. President Clinton gets credit, but the same would have happened if George Bush were still president.- During his 1992 race for the presidency, Clinton promised an income tax cut for middle-class families. You can't believe everything you hear in an election year.
- There was much moaning and groaning over a 4.3-cent increase in the federal gasoline tax, but oil and gasoline prices are so low that hardly anyone notices that taxes have gone up.
- When mortgage interest rates fall into the 7 percent range, millions of Americans refinance their home loans. When interest rates rise, sales pick up because buyers figure they'd better buy now.
- Members of Congress come to Washington to spend money, not to save it. That's why the proposal by Rep. Timothy Penny, D-Minn., and Rep. John Kasich, R-Ohio, to trim $90 billion from the federal deficit went down to defeat. Old bulls of both parties warned their younger colleagues that pet projects back home might be canceled if they voted to slash government spending.
- When the economy is doing poorly, everyone argues that interest rates should come down.
- When the economy is booming, it's much harder to find someone who thinks interest rates should go up.
- The stock market has a mind of its own, often unrelated to what's happening in the outside world.
- Anyone who suggests that retirees pay taxes on their Social Security benefits will get nasty letters from little old ladies.
- The best things in life are expensive.
- In the old days, if a company were doing badly, it might eliminate some jobs to save money. Now even the money-making companies are eliminating jobs. If the trend continues, there won't be anyone left to turn out the lights.
- The battle over the North American Free Trade Agreement was a classic example of the gap between opinion leaders and ordinary people. The deal looked great to lobbyists, bureaucrats and editorial writers. It looked like Mexicans stealing American jobs to Joe Sixpack.
- Consumer confidence takes a long time to bounce back from a recession. Stories about corporate profits and capital investment don't cut much ice if your neighbor is out of work.