Economic Policy

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 -- With only faint wisps of economic trouble on the horizon, much of President Clinton's economic team is heading for the exits this summer, leaving White House aides with the delicate task of finding replacements who can keep the good times rolling -- at least through the 2000 election cycle.Treasury Secretary Robert E. Rubin will be stepping down soon, as will the president's three-member Council of Economic Advisers, including its chairman, University of California economist Janet Yellen.

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.

MEXICO CITY -- The faithful here are eager, and the secular -- especially government officials -- are worried.That's because during John Paul II's fourth papal visit to this most populous Spanish-speaking country this weekend, he is expected to inveigh against economic policies that aren't heedful of their social consequences. His call for Mexicans and others to work for economic and social justice will come in public, perhaps in his meeting tomorrow with President Ernesto Zedillo.The words of the head of the Roman Catholic Church carry weight with many Mexicans, but few observers claim to be sure how they may react.

BEIJING -- One of the biggest guessing games here ended yesterday when the Chinese Communist Party announced that it would open its most important meeting in years Sept. 12.In most countries, such information would have been a matter of public record months, if not years, ahead of the event. But until yesterday, the timing of China's 15th Party Congress was something of a state secret.The congress -- which is part convention, part national election -- is the first since the death of paramount leader Deng Xiaoping.

WASHINGTON -- Democrats and Republicans lauded themselves for this week's budget compromise -- and there seemed to be enough credit to go around: From House Speaker Newt Gingrich and the GOP come a $500 child tax credit and capital gains cuts designed to spur new businesses. From President Clinton and the Democrats come deductions for college expenses and guaranteed health care for the children of the working poor."The American people spoke when they elected a Democratic president and a Republican Congress," proclaimed Senate Majority Leader Trent Lott.

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.

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."