Or maybe not. From AFP:

OECD hikes US growth forecast, sees UK recession

PARIS (AFP) — The Organisation for Economic Cooperation and Development on Tuesday raised its forecast for US economic growth this year but cut its estimates for Japan and the eurozone, and said Britain faced recession.

The OECD, the Paris-based grouping of 30 developed countries, said the US economy would expand 1.8 percent in 2008, a sharp upward revision from a prediction in June of 1.2 percent.

As the OECD’s news release states, “Weak activity to continue throughout 2008 - Interim economic assessment.” But weak growth IS growth, and with the United States leading the way among the industrialized countries, the relentless downgrading by some of the U.S. economy starts to appear fantastical and damaging and even malicious.

The reliably dispassionate Robert Samuelson took a closer look at the data in his Washington Post column today, “The Real Economic Scorecard.” He observes:

Though echoed by policy wonks, pundits and politicians — last week, Bill Clinton — the conventional wisdom is wrong or, at least, misleading. Here’s a more accurate assessment. For most Americans, living standards are increasing, albeit slowly, over any meaningful period. But rising health spending is eroding take-home pay, and immigrants are boosting both poverty and the lack of health insurance. Unless we control health spending and immigration, the economic report card will continue to disappoint. Unfortunately, neither Obama nor McCain seriously addresses these problems.

So here’s the real situation: The economy grows, mostly, and people are doing better, mostly. And here’s what we know, most definitely: Raising taxes, increasing regulations and sticking it to employers neither spurs growth nor addresses the immigration and health care issues that Samuelson identifies.

Today’s Wall Street Journal includes two letters of merit on the subject of corporation taxation, both responding to an earlier letter by Sen. Byron Dorgan (D-ND), protesting the behavior of the private sector.

We offer the one missive from the NAM’s own Jeff Noah (director of our small- and medium-sized manufacturers department), writing in his personal capacity:

Though Sen. Byron Dorgan insists on separating fact from fiction when it comes to corporate tax rates, neither he nor most policymakers from either major political party acknowledges the most stubborn fact of all: Corporations don’t pay taxes; they pass the cost of taxes, along with all other costs, on to consumers.

Since corporations are nothing more than collections of individuals (workers, executives and investors) who come together by choice in common pursuit of profit; and since those individuals’ profits (wages, salaries, dividends and capital gains) are taxed once already, a truly fact-based analysis might argue for abolishing the politically correct charade of corporate taxation altogether.

Such an abolition would immediately lower consumer prices for goods and services while dramatically boosting investment in American companies on American soil. Lower prices would help working- and middle-class families struggling to make ends meet, and the unprecedented rush of capital into the U.S. from around the globe would drive explosive economic growth, job creation and correspondingly higher tax revenues for federal, state and local governments.

Jeff Noah
Bethesda, Md.

The NAM has released its 11th annual Labor Day Report.  Facing Up To The Challenge: Trade Energy and the Economy focuses on the current state of the American worker.  Sluggish domestic demand, chiefly due to high energy prices and an ongoing housing recession, have caused employment to decline continuously throughout the first seven months of the year.  The construction sector and a number of manufacturing industries have been hit hard. 

Amid these significant challenges, the one bright spot continues to be exports, which have accounted for more than half of total  economic growth during the first half of this year.  The report calls for a comprehensive national energy strategy that both boosts domestic production and exploration of energy resources as well as increases energy efficiency.  The result will be reduced dependence on foreign sources of energy, lower energy prices and higher disposable incomes for American workers. 

The report also calls for policy makers to aid U.S. exports (which are manufacturing jobs) by passing the three Free Trade Agreements (with Colombia, Panama and South Korea) that are awaiting Congressional Approval on Capital Hill.  

Companies, like lobbyists, are an easy target when it comes to political speeches. “Taxing corporations” unfortunately makes for a good soundbite. But, a good policy maker knows that it’s not that simple. That’s why it was disappointing to hear Senator Obama launch an attack on “big corporations, oil companies…and companies that ship jobs overseas.”

The reality is that these very companies that Obama wants to tax are major contributors to our country’s economic growth. American manufacturers provide well-paying jobs for employees, investment opportunities for shareholders and high-quality products and services for consumers. Today, more than ever, manufacturers compete in a fiercely competitive global marketplace. In recent years, our trading partners have lowered their corporate tax rates making it harder for U.S. based companies to compete. Raising taxes on these companies won’t make them more competitive and it certainly won’t create more jobs. At a time when the economy is struggling to recover - we need policies that help companies expand and grow. Lowering - not raising - the corporate rate would be a good first step.

From the liberal The New Republic’s well-done blog, The Plank, a post from Robert Gordon and James Kvaal, “Impossible to Pigeonhole“:

The speech once again demonstrated why Obama is so hard to pigeonhole ideologically.  He forcefully pressed classic Clintonian themes of government reform and personal responsibility, far more effectively than John Kerry ever did.  And he also dipped down to “second-tier issues” like family leave and bankruptcy (especially nice to hear after Joe Biden — who supported bankruptcy reform — joined the ticket), issues where “small” fixes can make a big difference.

But at the same time, Obama also made clear that “now is not the time for small plans.”  He offered a sophisticated defense of government, arguing that “what it should do is that which we cannot do for ourselves.”  And he went on to outline an agenda for health care and energy more ambitious and activist than Democrats have heard from their nominee in years.

The speech also had a serious populist edge.  Based on a quick count, Obama mentioned “companies” and “corporations” eight times – all but once (helping auto companies retool) in a critical tone.  In contrast, Bill Clinton mentioned them only four times in two speeches in 1992 and 1996.

The striking shift over time, not surprisingly, is that energy has replaced education as a top-tier issue.  Education and schools were mentioned 27 times in 1996 and 20 times in 2000, but only eight times in 2004 and 10 times tonight.  At the same time, the words “energy,” “oil,” and “gas” were not mentioned at all in the 1990s and only once in 2000, but they were used six times in 2004 and nine times tonight.

The anti-employer rhetoric has been a consistent and troubling theme throughout the Democratic presidential primaries. So much of the motivation for the raise-taxes rhetoric seems almost punitive, the desire to stick it to jobs-creators because of profits. What’s next? Defining some companies as patriotic, others as unpatriotic? It’s been suggested — more than suggested, endorsed.

According to the Commerce Department’s revised estimate released today, the economy grew at a solid 3.3 percent pace in the second quarter.  This is 74 percent faster than the advanced estimate of 1.9 percent growth released last month.  While consumer spending edged up a little faster, rising at a 1.7 percent annual rate, than initially reported, the bulk of the improvement in the health of the economy came from trade.  Export growth was revised up to 13 percent (compared to 9 percent growth in the advanced report) while imports fell by 7.6 percent (compared to -6.6 percent in the advanced report). 

As a result, net exports (exports-imports) contributed 3.1 percentage points (or 94%) of the total 3.3 percent growth in the second quarter.   This is the single largest quarterly contribution to growth from trade in 28 years (2nd quarter 1980).  Exports alone were responsible for half of GDP growth last quarter.

Thanks to a more-competitive value of the dollar and solid growth overseas, trade winds are propelling the economy forward just at the right time.  Since the housing recession started in the first quarter of 2006, trade has added more to GDP growth than housing (residential investment) has taken away. 

Today’s news should be a wake up call to members of Congress, especially those who are dubious about the benefits of trade and claim that Free Trade Agreements, which work to level the playing field and make U.S. manufacturers more competitive, hurt American workers. 

The trade deficit, which was 5 percent of GDP in the second quarter, is mainly a reflection of our country’s reliance on foreign sources of energy.  By themselves, imports of petroleum made up 69 percent of the entire trade deficit in goods and services last quarter.  A comprehensive national energy strategy focused both on increasing efficiency as well as increasing domestic production will help reduce our reliance on energy imported from abroad.

The trade deficit in manufactured goods with our FTA partners, however, has narrowed over the past few years and through the first six months of this year, has turned into a suplus!  Congress can help manufacturers further by passing the three FTAs (with Colombia, Panama, and South Korea) that are awaiting congressional approval.  Economically, its a no-brainer.  Lets hope that the politicians on Capital Hill can show the political courage, ignore the foes of free trade, support U.S. manufacturers, and pass these agreements.   

 These issues are discussed more fully in this year’s, NAM Labor Day Report, which was just released.  I’ll write more about this tomorrow.

From the U.S. Census:

Real median household income in the United States climbed 1.3 percent between 2006 and 2007, reaching $50,233, according to a report released today by the U.S. Census Bureau. This is the third annual increase in real median household income.

Meanwhile, the nation’s official poverty rate in 2007 was 12.5 percent, not statistically different from 2006. There were 37.3 million people in poverty in 2007, up from 36.5 million in 2006. The number of people without health insurance coverage declined from 47 million (15.8 percent) in 2006 to 45.7 million (15.3 percent) in 2007.*

These findings are contained in the report Income, Poverty, and Health Insurance Coverage in the United States: 2007 [PDF].

Oh, man. What next? Workplace fatalities reach record low?

* The first annual decline in seven years, HealthDay News reports.

Sen. Joe Biden was certainly an interesting pick for Sen. Obama. Right until the very last minute, many thought Obama would pick Hillary Clinton to shore up the remaining Democrats who supported her in the primary and who haven’t warmed to him. Polls right after the Biden selection suggest that a Clinton pick might have brought more unity to the Dem ticket - from one-quarter to one-third of Hillary backers are still saying they won’t support their party’s nominee.

But the Biden pick sends a message that targets another key constituency group - independent and undecided voters who like Obama, but who have been concerned his experience in foreign policy is rather light. Biden brings deep foreign policy credentials and is respected on both sides of the political aisle, and is well-known in foreign capitals. In fact, immediately after the Russia-Georgia conflict erupted, Senate Foreign Relations Committee Chairman Biden traveled to Georgia with an offer to assist.

A few years ago, my office was right across the hall from the Biden office. You get to know the real person when you see them all the time - especially when they are in a hurry to get to a vote or meeting. Joe Biden is the consummate gentleman. He never missed an opportunity to say hello, even though he knew I was a mere staffer in another office. On the floor of the Senate, he is certainly known for being loquacious, but he also has a reputation for being gracious and respectful of his colleagues.

The Biden record on manufacturing issues is not so rosy, unfortunately. Except for one vote in support of the NAM position on energy development (a very important vote to be sure) and another authorizing funding for highways, the Biden record in the last Congress on key manufacturing issues is dismal. Overall, in the last Congress (2005-2006), he only voted to support the NAM agenda 11% of the time.

But the NAM has always found him willing to listen. We hope that continues should he be elected Vice President in November.

In “Obama’s Factory Floor,” the Washington Post’s Harold Meyerson today wrongly asserts that the decline in the dollar has not aided manufacturers. The basis of Mr. Meyerson’s claim is a story that appeared in Monday’s New York Times. As Meyerson writes, “Nonetheless, as the New York Times’ Louis Uchitelle reported Monday, most of the rise in U.S. exports has come in corn, wheat and other agricultural commodities, not in aircraft or machinery”.

This is totally false. It turns out that over half of what Mr. Uchitelle claims in his story are unprocessed commodities are actually manufactured products, like steel, chemicals and processed food products. It is manufactured products, not agricultural commodities, that are the driving force behind U.S. export growth.

During the first half of this year, manufactured products accounted for 81 percent of the rise in overall goods exports compared to the first half of 2007. Agricultural exports, by comparison, accounted for just 15 percent of the increase. In fact, exports of machinery and transportation products like aircraft alone increased a third more than all agricultural exports combined!

Mr. Meyerson goes on to ask “Will America ever get its manufacturing back?” Get it back? Last year, U.S. manufacturing production reached an all-time high! The United States is the largest manufacturing economy in the world, accounting for fully a fifth of world-wide manufacturing production in 2006 (latest data available from the United Nations.) Manufacturing production has slowed in recent quarters, but this is mostly due to spillover effects from the ongoing housing recession and a downturn in purchases of motor vehicles, not a lack of export growth.

Mr. Meyerson then goes on to criticize Senator McCain’s support of free trade agreements stating that “McCain has supported every offshoring, free-trade accord, past or pending, that has decimated the Midwest;”. Again, Mr. Meyerson should check his facts. Through the first six months of 2008, U.S. manufacturers had a trade surplus with our Free Trade Partners.

The next time Mr. Meyerson writes on manufacturing and trade, he should first check out the facts. They may lead him to a different conclusion…although knowing Mr. Meyerson’s writings, probably not.

Good report on the state of the play, or no-play, of the research and development tax credit by Brian Wingfield at Forbes, “No Developments.”

It’s favored by business groups, celebrated by presidential candidates and loved by politicians on both sides of the aisle, yet it can’t grab Washington’s attention.It’s the research and development tax credit, which lawmakers let expire at the end of last year in a partisan dispute over tax issues and how to pay for them. Businesses say that without it, other countries like Canada, Ireland and Australia–which have attractive R&D tax incentives–will lure research jobs away from the U.S.

“It’s a motherhood and apple pie issue,” says Monica McGuire, who’s lobbying for the credit on behalf of the National Association of Manufacturers and the much broader R&D Credit Coalition.

 The website of the R&D Credit Coalition is InvestinAmericasFuture.org.