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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (44739)	10/2/2003 4:00:02 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

James K. Galbraith ponders the possibility that the Bush White House actually likes a slow-growth, high-unemployment economy. The key paragraphs: Why not? It may be that economic stagnation is to their taste. They don't want a new recession, obviously, and they look set to avoid that. But do they really want full employment and strong labor unions and rising wages? Probably not. The oil, mining, defense, media, and pharmaceutical firms who form the core of their constituency rely on monopoly power, patents, and the control of public resources for their profits. They do not depend, very much, on strong consumer demand. As for the election, there are no Bush Democrats. The Nixon Democrats in the South long ago turned Republican, while the Reagan Democrats up North seem to have largely returned to the fold. (Michigan, for instance, went comfortably for Gore.) In a weaker economy, too, it may be that turnout will decline, helping Bush. The calculation is therefore plain: A strong economy won't help that much, and a weak economy won't hurt that much, either. And if it does, the effect can be drowned in a sea of grateful campaign money--or perhaps by some new national security crisis. Stagnation, moreover, helps to justify more tax cuts. The Administration's core policy objective in this area is to shield financial wealth from all taxation. I read things differently. In my view, the key decision makers in the Bush White House don't believe that their economists know anything, or that administration economic policies have any affect on anything. (Save, of course, for tax cuts for the rich--which are good by definition.) If their economists did know something, after all, they would have to feel guilty about the steel tariff, the agricultural subsidies, the unbalancing of the long-run budget of the United States with the biggest forecast deficits in American history, and the failure to enact effective economic stimulus programs. I find Galbraith's story implausible because I find his judgment that "a weak economy won't hurt [Bush] that much" implausible. High unemployment rates, falling employment numbers, and large budget deficits are important not just for their effects on people's lives but important as indicators of governmental competence. The press corps can build an entire story line of "the Bush government is incompetent at domestic policy" on bad economic numbers. And that can hurt a great deal. MORE...