Once again, it's the economy
By Thomas Oliphant, 4/4/2004
WASHINGTON
THE AFL-CIO is wasting a ton of money this weekend running a television commercial whose tag line urges viewers: Tell President Bush: No Jobs. No Recovery.
For the audience in 11 so-called swing states, perhaps the labor federation could run a commercial next weekend that begins: On the other hand . . .
The overdue but welcome news that the economy is beginning to produce jobs on a decent scale should instruct Democrats and John Kerry that those who live by one direction in the economic statistics are just as likely to die by the other direction.
The economic issue, after all, is not numbers, it is people.
For those who accept the notion that we live in a political economy, facing the people part of the equation has been a hard sell.
A year ago, Democrats and Kerry were bemoaning the economy's "stagnation," that economic growth had barely resumed by early 2003 after its brief contraction in 2001. Some of them were pushing ideas to stimulate the economy, including Kerry's embrace of the idea of boosting consumer spending by giving ordinary wage earners a temporary break from Social Security taxes.
This fixation on economic growth as measured by the gross domestic product neglected the elemental fact that after a pause or a recession, the business cycle has a history of starting up again. Sure enough, by the fall, the GDP recovered smartly, including a third quarter performance that was the best in 20 years -- back when another incumbent Republican president, Ronald Reagan, rode a snappy recovery from a much worse recession to a landslide reelection victory.
However, the return to growth in output was of no political consequence, for a reason that should have been obvious, namely that GDP improvement involves production, not income or standard of living or even employment.
That became the second line of complaint for many progressives, Kerry included, as the date of the Iowa caucuses in January neared. For reasons that are still not sufficiently understood by the geniuses who follow such matters, payrolls did not quickly respond to the better business environment. Some cited higher worker productivity, others cited investment uncertainties related to war and terrorism, still others cited the increasing corporate investment in service and production facilities in low-wage countries. The reasons, of course, were not important politically; what counted politically was that the payroll number from the Labor Department remained flat.
As with the GDP, however, the fixation on one number on the first Friday of every month was as misleading economically as it was politically. With output having begun to recover, it was only a matter of time before employment began to do the same.
Sure enough, that is not only what the Labor Department says happened in March, it is what the government says had been happening for a couple of months, now that it has had a chance to revise its data on the basis of fresher information. Someone should have shouted louder at the Democrats last winter that their favored expression -- "jobless recovery" -- was a contradiction in terms and that either there were going to be a lot of new jobs or there wasn't going to be a recovery.
The Democrats' mistakes, however, are now about to be repeated by President Bush and his political people from the opposite perspective. Cheerleading in the face of a deeper adversity in the country is not the same as confidence or optimism. The Bush administration is entitled to a few days of celebrating the end of a bad, frustrating stretch, but by pushing the absurd notion that the economy is healthy for those who live off their paychecks and pension checks, the president's people will be painting a large target on his campaign.
That target is the economic and financial condition of working families. The squeeze on incomes from the median on down -- from higher state and local taxes, soaring health insurance premiums, higher college tuition, snail's pace wage growth, debt, pint-sized federal tax cuts, and now ridiculous gasoline prices -- is intense. A broader Kerry message that focuses on these kitchen table topics (the kind he and John Edwards used to break out of the back in Iowa in January) and points the way with specifics to a different future will resonate powerfully.
In the Los Angeles Times's national poll last week -- showing, like the latest CBS and Pew Center polls, a tiny Kerry lead -- voters picked Kerry over Bush to protect the average family's financial security by 47-34 percent; among independents the gap was 49-26 percent for Kerry.
The lesson is that it's not the GDP, stupid, or the payroll totals; it's the economy.
Thomas Oliphant's e-mail address is oliphant@globe.com.
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