October 7, 2004

The Bush Economy

Why is the best kept secret in this campaign the strength of the current U.S. economy? That Kerry is getting away with trashing the Bush economic record is the administration's own fault. They really could do a better job of educating voters on the strong upward trend in the economic picture over the last two years. If your record is good, run on it.

James Glassman's TCS column seems optimistic that enough people believe the economy is on the right track for it to be a positive for Bush in the campaign. A lot of people I come across in business and elsewhere don't seem so convinced, though they're still in the minority. It is tough to make a living out there, and businesspeople are working hard for what they earn. But for there to be this persistent belief among so many people that the overall economy is lousy when the traditional indices say otherwise, some part of the explanation has to be big media's negative spin, and their unwillingness to acknowledge the strong recovery and the high-growth economy, much less credit Bush administration policies for them. An excerpt from Glassman:

My guess is that the emotional and cynical appeals that Kerry is making won't work -- for the simple reason that the real economy is alive and well and getting better. "The U.S. will probably grow more in the second half than in the first," says David Malpass, chief economist for Bear Stearns. I agree.

The unemployment rate today is lower than the average of the past three decades. Household wealth has soared to a new record, and 69 percent of Americans own their own homes, the highest proportion ever.

Last week, the final figures for Gross Domestic Product in the second quarter were announced. GDP, the nation's total economic output, grew nearly 5 percent for the year. That's greater than in any 12-month period during the Clinton administration. Personal income is up 5 percent in the past year, and business spending is strong. Inflation is tame, and interest rates are low. Compare the United States with Kerry's paragons abroad. Unemployment in France is 9.9 percent; in Germany, 10.6 percent.

On Friday, statistics on employment will be released. August showed a gain of 144,000 jobs, but, because of the hurricanes, the increase could be smaller for September. But there should be a dramatic upward revision for past months as the Bureau of Labor Statistics reconciles the payroll survey, which shows a net loss of about 800,000 jobs during Bush's term, with the household survey, which shows a gain of 2 million jobs.

Kerry, through distortions and obfuscations, will try mightily to convince Americans that Bush has messed up the economy. If reality counts, he won't get away with it.

George Will is taking on the more fundamental fears of the Democrats about a second Bush term. Some of their most valued benefactors; trial lawyers, organized labor, and teachers unions are threatened by tort reform, privatization, and school choice respectively. What Will calls "the Democratic Party dependency-bureaucracy complex" is under attack by the free market system, and fearful that many of those reforms, and reform of Social Security are supported by majorities of American citizens. Excerpting Will:

Bush is pressing to put hundreds of thousands of federal jobs up for competition with the private sector. Grover Norquist of Americans for Tax Reform says: "The people who cut the Pentagon lawn are government employees. Why?" People listed in the phone book will do it cheaper. How many of the 15 million state and local government jobs could be privatized, with how many billions of dollars in savings?

The public education lobby -- one in 10 delegates to the Democratic convention was a member of a teachers union -- wants government to keep impediments in the way of competition. That means not empowering parents with school choice, including the choice of private schools, which have significantly lower per-pupil costs.

Welfare reform, the largest legislative achievement of the 1990s, diminished the Democratic Party's dependency-bureaucracy complex. That complex consists of wards of government and their government supervisors. And Bush's "ownership society" is another step in the plan to reduce the supply of government by reducing the demand for it.

Will says some of the "Democratic rage" is explainable by Bush's leadership of the movement that threatens this status quo. In other words, it's nothing personal, Mr. Bush. It's naked self-interest talking here.

Posted by dan at October 7, 2004 8:39 PM