A dose of humbug

December 23, 2003

AT THE Columbia Mall on Saturday night, the shopping center's vast parking lot was jam-packed with cars until well after 10.

Across the country, retailers aren't predicting a blockbuster Christmas, but on the other hand, who hasn't encountered big - at times remarkably big - crowds this season?

That's perhaps to be expected. The national economy is showing signs of recovery (and of course Maryland weathered this last recession relatively well). Business investment is picking up, helping consumers who have carried the American economy the last two years, even it meant going further into hock. The stock market is joining housing prices in bubbling up. And unemployment claims are falling.

So it's also not surprising that in an Associated Press poll last week, a majority of American voters (55 percent) approved of President Bush's handling of the economy for the first time in a year. After all, if you've retained your job, salary and benefits during this downturn, you're probably working longer and harder but you've got plenty for which to give thanks.

Beyond Christmas cheer, however, it's hard to laud Mr. Bush for his economic policies, which boil down to the buy-now-pay-later stimuli of deficit spending, tax cuts for the wealthy, low interest rates and a falling dollar. And that calls for a sizable dose of humbug, because the boost from all that liquidity is running out, and these taps can't be kept so wide open much longer.

Already, Mr. Bush's three tax cuts will contribute heavily to a projected federal budget deficit of a half-trillion dollars next fiscal year. If the economy does gain steam, interest rates are bound to rise, threatening to prick the housing bubble and its heady effect on consumers. While the dollar's fall to date has lowered import prices for shoppers, if the mounting national debt weighs down the dollar much more, foreign investors could ditch American securities - a potential economic catastrophe. Meanwhile, workers' wage growth has been almost flat, and the nation still has 2 million fewer jobs than when the president took office, a record unmatched since Herbert Hoover.

Give Mr. Bush credit for furiously priming the nation's pump, thereby filling mall parking lots. But he hasn't offered anything resembling sustainable economic policies, only the unproven supply-side fantasy of tax cuts spurring so much economic growth that the nation's massive budget deficits would somehow evaporate.

In 2004, significant growth in jobs - jobs that don't represent steps backward for workers - should be Americans' test for Mr. Bush's economic policies. What has he done on this front? Scapegoat China's growing production? Put up politically driven, counterproductive tariffs on steel and textiles? This nation needs advanced industrial policies aimed at training workers for cutting-edge industries that can compete globally. Instead, Americans have mainly received presidential encouragement to spend themselves and this nation deeper into debt.

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