I’m not sure why John McLaughlin invited CNBC’s Maria Bartiromo to join his gang of pundits. All she seemed to care about was how the stock market was doing. When the Group was talking about the economy, she noted that the market had recently declined but the labor market was still soaring. OK, McLaughlin himself kept talking about how the unemployment rate has held steady but couldn’t someone on the panel noted that the employment to population ratio had slipped from 63.4% as of December to 63.0% in July. Yep – that old labor force participation rate dipped from 66.4% to 66.1%. CNBC touts one of Bartiromo’s shows as a “syndicated business, financial and economic news program” but its host thinks the labor market is soaring?
But to the main topic of this thread will address the Group’s coverage of the Minnesota bridge collapse. Pat Buchanan started off by complaining that we do not spend as much on transportation as we used to. That got me curious so I turned to table 3.16 of the NIPA tables. Government spending on transportation is reported from 1959 to 2003 and our graph shows spending relative to GDP. Now I’m also curious as to why the Bureau of Economic Analysis has not provided data since 2003. But notice something – we used to invest about 1.2% of GDP on transportation back in the 1960’s and the 1970’s and have invested about 1% of GDP since.
The host started blaming the Iraq War for diverting resources away from investing in transportation. Tony Blankley – Newt’s British boy and serial apologist for the Bush Administration – almost had a heart attack over this claim. Blankley noted that the lack of investment in transportation predated this Administration. Good thing I wasn’t invited on the show as I would have suggested that the Reagan tendency to cut taxes as we increased defense spending back in the 1980’s may have been a factor here. Tony certainly would have exploded over the suggestion that tax cuts for the rich may have been responsible for this supposed lack of investment in transportation.
While Buchanan started off strong, he ended with the stupid comment of the show – even more stupid that any of the babbling from Bartiromo. Buchanan had to get in our current account deficit with China somehow so he tried to argue that all those dollars that they are buying has allowed them to invest more in their infrastructure than we do. Let’s review the accounting that Buchanan got backwards. Our current account deficit means our investment exceeds our national savings. China’s current account surplus means their investment is less than their national savings. But then our national savings is rather low thanks in part due to the fiscal irresponsibility of the Bush Administration. Again, it’s a good thing that the show did not have anyone on the panel that gets this as I wouldn’t want Tony Blankley to have that heart attack. But maybe Maria Bartiromo will run a story on how invest in stocks that will benefit from the concern over our bridges.