| Topic: |
Politics > Politics-USA |
| User: |
"Harry Hope" |
| Date: |
08 Aug 2003 10:45:27 AM |
| Object: |
The fruits of Bushonomics |
From The Boston Globe, 8/6/03:
http://www.boston.com/dailyglobe2/218/oped/The_fruits_of_Bushonomics+.shtml
The fruits of Bushonomics
By Robert Kuttner
GEORGE W. BUSH faces a race between the ill-advised economic policies
sown in the first half of his term and the bitter fruit that those
policies are starting to bear.
If the sour effects of his economic policies are evident by mid-2004,
he is in deep political trouble.
For now, at least, Bush can say that the economic news is mixed.
The unemployment rate went up to 6.4 percent in May.
It dropped slightly, to 6.2 percent, in June -- but only because more
and more people have dropped out of the labor force entirely as
payrolls continued to shrink.
Economic growth came in at 2.4 percent for the second quarter of 2003.
That was better than expected, but it needs to hit 4 percent or higher
to reduce unemployment.
Bush's cheerleaders say that will happen, in well-choreographed
fashion, in the election year.
But will it?
Timing is everything.
George Bush the first missed his rendezvous with prosperity in 1992.
And the policies of Bush I were not as damaging as those of Bush II.
Consider these several danger signs:
----- Deficits and interest rates.
Long-term interest rates have gone up a full point in a month.
Mortgages, which could be had at a bargain-basement 5 percent in late
June, are back to 6 percent.
The refinancing boom is slowing.
The bond market is swooning.
Bush optimists contend that interest rates are going up because
investors, sniffing a recovery, are shifting to stocks, leaving less
demand for bonds.
Dream on.
Skeptics correctly point to the immense deficits resulting from Bush's
three tax cuts.
If unsustainable deficits loom, the money markets eventually push up
interest rates.
Higher interest rates, of course, are bad for the recovery.
If investors sense the risk of inflation down the road, that undercuts
the Federal Reserve's ability to stimulate the economy with lower
short-term rates now.
Most serious of all, if long-term interest rates are impervious to the
Fed's policy of cutting short-term rates, then Alan Greenspan's
sorcery has lost its power.
(And deservedly so. Greenspan should have used his prestige as a
central banker to discourage the Bush tax cuts instead of taking a
dive as a good partisan.)
Will the true effects of the Bush deficits stay obscured until
November 2004 while the Fed tries to keep growth on track?
That looks less and less likely.
----- Trade.
Like his military policy, Bush's trade policy has been a blunt
instrument.
Bush and his economic appointees have been pushing for more
international trade with few conditions attached.
In theory this is good for everyone.
In practice, global trade with few ground rules has exported more jobs
than it has imported.
In their recent road trip, top Bush economic officials heard that
China's absorption of American jobs is killing local economies.
America's trade deficit with the rest of the world continues to widen.
The Democrats may be divided on some issues, but on trade most
Democrats favor conditioning trade with labor and other regulatory
standards so that its benefits truly flow both ways.
In an election year with a soft economy, Bush-style free trade is
likely to be an ever harder sell.
----- Vanishing services.
Ordinary Americans are saving a few bucks in their federal income
taxes.
Most of the breaks went to the top.
But as Bush and company cut federal aid while adding costly federal
mandates, local services are deteriorating.
Meanwhile, many states are having to raise property and sales taxes.
Normally in this kind of downturn, Washington helps the states.
This time Bush put tax cutting ahead of aid to states and communities.
Congress grudgingly included an emergency $20 billion only because
Democrats insisted on it.
Even so, that sum is a small fraction of the state budget shortfall.
Ordinary people are also losing private health benefits and retirement
income.
The connection between some of these economic woes and Bush's policies
are direct.
In others, such as dwindling health security, the connection is more
indirect; it reflects what the administration failed to do.
But it almost doesn't matter how well voters explicitly connect the
dots.
A bad economy spells bad news for an incumbent president.
A lot of this is implicitly about class and the tiny elite that Bush
has helped. In good times Americans don't want to hear about class.
Everyone expects to be Bill Gates someday.
But in tough times, regular people become far more alert to who is
getting most of the cookies.
Bush is accountable for that, too.
_______________________________________________________
The intentions of this industry-controlled fraudulent administration
are to rape this country, destroy its treasures, walk away with the
loot, and turn the wreckage and the blame over to the opposition.
Harry
.
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