Economic Policy

GOVERNMENTS usually get far too much credit for "managing" the economy when things go well. But the accolades being showered on retiring U.S. Treasury Secretary Robert E. Rubin, the chief architect of the Clinton administration's economic policy for the past six years, are mostly deserved, not so much for what he did as for what he symbolized.Rubin inherited a quarter-century of almost malignly incompetent economic policy-making by a succession of presidents of both parties. Lyndon B. Johnson chose inflation over taxation to finance his unpopular war in Vietnam.

NEW YORK -- As the campaign leading to next year's elections intensifies, the Republican Party finds itself deprived of a crucial weapon -- economic policy.This is unprecedented in recent U.S. history, as the economy has been the Republicans' strong suit, and they have usually been able to best the Democrats on the issue of fiscal management.This situation is all the more extraordinary because conservative economists should find plenty to criticize in the Clinton economic boom.In the early 1990s, the Demo-crats appropriated many key ideas previously advocated by conservatives: fiscal discipline, low taxes, reduced regulatory oversight, individual choice and small government.

NEW YORK -- Economists like to emphasize the importance of economic policy. They are quick to give credit to sound policies in periods of prosperity and look for policy mistakes whenever things go wrong.But they tend to disregard the enormous role played by demographics. There is, for example, a heated debate in this country over which policies created the current economic boom.Yet, with all due respect for various economic ideologies, it could merely be that the baby boom generation is responsible.

WASHINGTON -- Even as Bob Dole and Bill Clinton promise to put more cash in consumer pockets, two new studies suggest the American family is working harder and earning less, and the treadmill they're on isn't likely to slow any time soon.American families are "running in place," economically, squeezed by lower wages and having to work harder to make ends meet, according to studies commissioned by the Competitiveness Policy Council, a bipartisan federal advisory group set up by Congress.Despite a strong economy, average hourly wages, after accounting for inflation, are still $1.20 below their peak of $8.50 in 1973, the group says.

WHEN scientists' models of reality stop working, first they check their math.Then they check reality.Astronomer Percival Lowell deduced the existence of Pluto by observing the crooked orbit of Neptune. A similarly small anomaly, this one in the economic universe, may be telling us something equally portentous about the country's future.The unexplained phenomenon is a bulge in federal tax collections.The theoretical, unseen object behind it is economic growth -- growth that surpasses the official figures, growth that is beyond statisticians' telescopes.

The nation's manufacturers, restless that weak demand is restricting production and profits, declared yesterday that the United States is capable of much greater economic growth -- without a sharp increase in inflation -- than the Clinton administration, the Federal Reserve and Wall Street believe is possible.The manufacturers' declaration, in a resolution adopted unanimously by more than 100 directors of the National Association of Manufacturers, is their bluntest, strongest statement on the issue.

Hobart RowenPost columnistHobart Rowen, a Washington Post columnist who wrote about business and the nation's economic policy for five decades, died of cancer yesterday. He was 76."Bart taught a generation of business journalists here and around the country how to cover economic policy in a more sophisticated way," said David Ignatius, the Post's assistant managing editor for business.A passionate advocate of free trade, Mr. Rowen emphasized that the United States was part of a global economy, and his columns pushed financial reporters and government leaders to look at the larger picture.

WASHINGTON -- In a major speech on economic policy in Chicago, Kansas Sen. Bob Dole set aside his long-held concerns about the deficit and embraced the major tenets of supply-side policy: a "flatter tax system," abolition of the Internal Revenue Service and a constitutional amendment requiring a super-majority in Congress to raise taxes.The speech marks a milestone for Mr. Dole, for years derided by supply-siders, in a put-down made famous by Rep. Newt Gingrich, as the "tax collector for the welfare state."

WASHINGTON -- The speaker of the House has recommended that Rep. Kweisi Mfume be elected chairman of the Joint Economic Committee, a plum that would broaden the Baltimore Democrat's congressional resume while making him the first black to control the influential panel.The Joint Economic Committee does not handle legislation, but it employs a staff of economists charged with making an annual economic report to Congress. The panel also conducts monthly hearings, at which the Bureau of Labor Statistics unveils national unemployment figures, and serves as a kind of economic think tank for Congress.

Robert E. Rubin, chairman of the National Economic Council, was much too quick in denying that Federal Reserve Board chairman Alan Greenspan has been "a senior adviser, almost a teacher to [President] Clinton" -- a description appearing in a new book by journalist Bob Woodward of Watergate fame. In asserting that the president "relates to Alan Greenspan the way he relates to" other economic policy advisers, Mr. Rubin turned the usual White House spin into quite a stretch.The fact is that no president relates to the Fed chairman of the moment as though he were just another adviser.

As President Barack Obama announced his decision to renominate Federal Reserve Chairman Ben Bernanke for a second term Tuesday, both men presented a message of stability in the face of a persisting recession. "The Federal Reserve, like other economic policy makers, has been challenged by the unprecedented economic events of the last few years. ... We have been bold," Bernanke said after the announcement. "If confirmed by the Senate, I will work to the utmost of my abilities ... to help find a solid foundation for growth and stability."

WASHINGTON - -The government report Thursday that the nation's unemployment picture took an unexpectedly sharp turn for the worse after four straight months of moderately encouraging news was a sobering jolt to hopes that the economy might gradually be getting back on track. The overall unemployment rate edged up just a notch, to a 26-year high of 9.5 percent in June, but the loss of 467,000 payroll jobs made it clear that the worst economic crisis since the Great Depression was far from over - at least for American workers.

If you think President Bush's abysmal public approval is strictly a function of his mismanagement of the Iraq war, think again: While Mr. Bush's overall approval, depending on the poll, hovers near 30 percent, his approval for handling the economy is not much better. A June national poll by the American Research Group, in fact, pegged Mr. Bush's overall approval at 27 percent and his handling of the economy just 2 points higher, at 29 percent. Given that the war has eaten most of the president's national agenda, is it any surprise that he gets low marks for policies that have nothing to do with Iraq?

CHICAGO -- President Bill Clinton once said his Treasury secretary, Robert E. Rubin, was the greatest since Alexander Hamilton. When President Bush announced the departure Monday of his Treasury secretary, John W. Snow, neither Mr. Bush nor anyone was tempted to compare him to any of his more revered predecessors. When Mr. Snow leaves Washington, will anyone notice? The Treasury post used to be among the most powerful in Washington - filled by such weighty figures as John B. Connally, George P. Shultz, James A. Baker III and Lloyd Bentsen.

AS A YOUNG and enthusiastic voter, I have listened intently to both political parties have told me that for myself and other young voters, this is the most important election in our history. But in my brief term as a politically conscious citizen, it seems that for all the talk of importance, this election has been so poorly covered and inadequately presented by the media that its relevance is veiled by a lack of substance. This election will not be remembered as the passionate struggle between two sharply different plans for America.

Economic indicators have come to resemble that old chestnut about the weather - if you don't like the latest one, just wait 15 minutes and something different will come along. The United States economy - by definition in a recovery mode for over two years now - continues to confound. It is making a lot of money but not many jobs. Even as it gets more productive, the wages it pays remain flat. Its schizophrenic nature seems on display almost every day, when some new figure comes out. Jobs are created like gangbusters one month, hardly at all the next.

BOSTON - Bored and sitting in a folding chair in a gymnasium at Roxbury Community College, seven miles from Boston's FleetCenter, Job Corps member Lashonda Jackson can't muster excitement for John Kerry. The 18-year-old hasn't registered to vote and - despite the best efforts of Congressional Black Caucus Chairman Elijah E. Cummings, leading a panel of political experts in the front of the room who weigh in on the urgency of black voters going to the polls on Nov. 2 - she remains ambivalent about taking part in this year's elections.

SAN FRANCISCO - Six million people will lose their right to be paid overtime under new federal regulations scheduled to go into effect in August, according to a new report by a liberal research group. Nearly 2 million workers who are "team leaders" will be ineligible for overtime pay under the new rules, along with about 920,000 workers without college degrees who will be reclassified as "learned professionals," according to the Economic Policy Institute report. Among the 3 million additional workers who will become ineligible are some who earn more than $100,000 a year as well as some teachers, computer programmers and supervisors, the report contends.

DID PRESIDENT Bush lie to the American people in his State of the Union address when he said: "The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa"? Technically, no. Why? Because "the statement that he made was indeed accurate," said National Security Adviser Condoleezza Rice on July 13. "The British government did say that." Ms. Rice speaks the literal truth, just as her boss does, to distort what is meaningful. Outright lying is not the administration's modus operandi; willful deception is. Like the bank robber who leaves a distinctive mark at the scene of the crime, Mr. Bush's statement on Iraq shows his telltale MO. Moreover, duping the nation into war is only one case of the pattern of calculated deception that has gone on since the outset of his administration.

WASHINGTON -- With the impending departure of Mitchell E. Daniels Jr., the famously frugal White House budget chief, President Bush will be taking on a struggling economy and soaring federal deficits with virtually a brand-new economic policy team. Daniels' exit will deprive Bush of his fiercest advocate for spending restraint at the very time that the administration is trying to persuade Congress to pass a large package of new tax cuts that will take an even deeper bite out of the federal budget.