As sun sets on Bush, it rises on the economy ON POLITICS

JACK GERMOND & JULES WITCOVER

December 02, 1992|By JACK GERMOND & JULES WITCOVER

WASHINGTON -- Thirty-two years ago around this time President-elect John F. Kennedy was getting ready to take office after having narrowly defeated Republican Vice President Richard M. Nixon on, among other things, his warning of a severe "missile gap" facing the United States vis-a-vis the Soviet Union. Kennedy shortly learned from intelligence sources that there was no such gap at all -- too late to help the hapless Nixon.

Now, as President-elect Bill Clinton prepares to take over the White House, defeated President Bush is confronted with somewhat the same situation -- the economy that Clinton said was going to hell in a handbasket seems to have been in recovery before the election, as Bush claimed all along.

That is a conclusion that can be fairly drawn, at least by Republicans who like to punish themselves with what-ifs, from the latest economic statistics just released by the Commerce Department.

The Index of Leading Indicators, which assesses levels of economic growth in order to forecast economic activity for six to nine months, went up 0.4 percent in October after having dropped in three of the previous four months.

Orders for new cars and other durable goods went up, along with wages and salaries, in October, and the country experienced the strongest third-quarter expansion in the production of goods and services in nearly four years.

These latest numbers come on top of last week's Commerce Department report that the gross domestic product -- what the country produced -- in the third quarter of 1992 went up at an annual rate of 3.9 percent, the strongest quarterly growth since the fourth quarter of 1988, the last of the Reagan tenure.

Of 11 indicators that go into the index, Commerce reported that six went up. The most notable was a 13.7 percent drop in average weekly claims for jobless benefits, the largest monthly falloff in nearly 10 years. Others included a rise in building permits and orders for consumer goods.

Unfortunately for Bush, these signs all came too late to make his case credible that the recovery was already under way before the election.

One reason was that the statistic that seems to have the most political resonance is the monthly unemployment rate, and while that too has been dropping slightly -- from an eight-year high of 7.8 percent in June to 7.4 percent in October -- it was unacceptably high through the fall campaign. When Bush took office in January 1989, unemployment was 5.4 percent.

Bush may have more reason to torture himself with what-ifs on Friday, when the November unemployment figures are released. They are expected to show a sizable increase in non-farm employment and another drop in the unemployment rate.

While the state of the economy clearly was foremost in voters' minds when they cast their ballots on Nov. 3, it is far from certain that, had these positive economic numbers been known at the time, the election result would have been any different.

What Bush suffered from, beyond weak economic recovery statistics, was a severe loss of credibility going back more than a year, when he steadfastly denied the country had slipped into recession.

During the New Hampshire primary last February, the president kept insisting first that there was no recession and then that it was about to be over.

That optimism did not go over well in a state that some said was approaching depression conditions, particularly because Bush took so long getting up to New Hampshire to see for himself and try to convince voters that he cared what was happening to them.

As the recession hung on through the year, and Bush continued to drag his feet on offering an economic package to deal with it, his credibility as someone who knew what he was talking about regarding the economy withered on the vine.

Like a reverse Chicken Little, he kept saying that there might be a cloud or two, but the sky was securely in place.

Now, if the signals of economic recovery can be believed and the sky is not falling, Bush will be able to say I told you so -- small consolation on his way out the door.

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