It's the economy ...

October 25, 2004

IN THE 1992 presidential election, with the nation struggling through its first jobless recovery, Bill Clinton prevailed in part because his handlers realized early on, "It's the economy, stupid." Twelve years later, with household incomes falling during President Bush's first term, personal debt rising, family net worth sinking and America trying to break free of its second jobless recovery, that almost trite political logic should also be holding sway.

Instead, the tight race between President Bush and Sen. John Kerry seems most about two sharply opposed views of America's role in the world, the Republicans' more imperialist stance vs. the Democrats' more internationalist posture. Even on economic matters, some of the campaign's most fractious issues - involving the movement off-shore of American investment, jobs and profits - are also global.

For a nation often prone to paying little attention beyond its borders, this shift is quite notable. Of course, it's a natural result of the 9/11 attacks, the war on terror and the war in Iraq. It's also the product of an economy undergoing a rapid transition as a result of global influences. And last, some voters in this election may be giving Mr. Bush a questionable pass on the economy by the logic that the president can't finely control the economy and, after all, he inherited a hangover from the '90s boom and then came corporate scandals, 9/11 and two wars.

There's truth to that, but Mr. Bush could have done a lot more to aid middle- and low-income Americans. With the large share of his tax cuts that went to the very well-off, he could have created jobs by supporting a 2003 plan to give state and local governments $40 billion in one-time aid, but did not. He could have pushed for extending unemployment benefits for millions of workers this year, instead of letting them lapse. And he could have backed his campaign rhetoric about boosting job training with a record of increased funding, not cuts.

In any case, even the president's most ardent apologists must find it hard to defend his economic record. From 2000 to 2003 - with incomes falling against inflation, tax cuts and rising health care costs - the after-tax income of a typical middle-class married couple with two children (making an average of about $67,000 in 2003) actually dropped by 1.3 percent, according to a study by the Economic Policy Institute.

In polls, Mr. Bush fares better on security issues than on the economy. But it now may be that Mr. Bush's policies abroad are the biggest impediment to the economy improving for most Americans. Even as the economy has been showing signs of picking up and corporations reportedly are rolling in profits, job creation is stalled - reflective of deep insecurities that have sent corporate investment relative to profits plummeting to the lowest levels in 40 years.

If national security concerns have now trumped economic matters for many voters, then the nation's current economic problems still serve to provide more firm evidence of the failures of Mr. Bush's pre-emptive stance abroad.

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