Trying to defeat Bush on the economy
Howard Dean, the former Vermont governor, the Democratic presidential hopeful, has given away his party’s dirty little secret: They are praying for an economic downturn between now and November 2004.
They reckon it’s the only circumstance under which they can deny President Bush a second term in the Oval Office, given his favorable standing with the American people.
So, they are attacking the Republican’s economic policies. “If we re-elect this president,” warned Dean, testing out a Democrat campaign theme, “we’ll be in a depression.”
Unfortunately, the economy is not cooperating with Dean and his fellow Democrats. Just this week, in fact, Federal Reserve chairman Alan Greenspan said he sees indications of a “fairly marked turnaround” in the nation’s economy.
Indeed, over the last month, the bulls have returned to Wall Street. The blue-chip Dow Jones industrial average is at its highest level in nearly six months. The broader Standard & Poor’s 500 index is at its highest level in nine months. And the technology-laden Nasdaq Composite index is at its highest level in nearly a year.
Investors have returned to the stock market because they see harbingers of better economic times to come, like the stronger than expected growth for May in the U.S. service sector, which makes up 80 percent of the nation’s economy. It was the second straight month of expansion, according to the Institute for Supply Management’s index of non-manufacturing activity.
The nation’s housing market continues to expand, as sales of new homes rose 1.7 percent in April to a 1.03 million-unit annual rate. That annualized rate is at least the third-highest level ever recorded, according to the Commerce Department.
Meanwhile, the American people are increasingly optimistic about the economy. In fact, the University of Michigan’s closely watched consumer confidence index rose in May to its highest level in nearly a year.
Of course, not all the leading economic indicators are positive.
Most troubling, perhaps, is that the four-week moving average for first-time unemployment claims has remained above the 400,000 mark — the level that signals sluggish growth in the labor market — for the past three and one-half months.
Dean must be absolutely delighted by that news. Because he claims that President Bush has so mismanaged the economy during his watch that 2.5 million jobs have been lost. He also suggests that if the Republican is returned to the White House, the American people should expect the economy to shed a total of “eight million jobs in eight years.”
Yet, there are signs that the longest post-World War II labor-market slump has just about bottomed out. Layoff announcements by U.S. companies fell last month to their lowest level in two and a half years, according to Challenger, Gray & Christmas, the Chicago job placement firm.
The party of Dean is hoping that 2004 will be a repeat of 1992: That a Republican president named Bush sees his wartime popularity wane as the national economy wallows in recession, and that a Democrat rides the bad economy into the White House.
That’s why Dean and his fellow Democrats really oppose the Bush tax cuts. Not because they are so concerned that they will increase the deficit. Not because they are so outraged that the rich supposedly will benefit most. But because they fear that the tax cuts truly will produce the strong economic growth President Bush promises.
(Joseph Perkins is a syndicated columnist.)