Jewish World Review June 6, 2003 / 6 Sivan, 5763
It's the economy, genius!http://www.NewsAndOpinion.com | The Democratic Party is on life support. There is inner conflict about the firing of a number of black staff members (not to mention ideological clashes), and a Hispanic group is complaining the party is ignoring its issues. Polls indicate the soccer moms who voted for Bill Clinton are now primarily concerned about security. They are pledging their allegiance to President Bush, who in their view is better able to protect America than any Democratic presidential candidate. Some female pundits have even observed how "hot" Bush looks in a flight suit. Who knew that sexiness could work for a Republican?
Then there is the ultimate issue: the economy. While Democrats have tried to talk down the post-9/11 economic recovery, the facts are getting in their way. The Wall Street Journal reports that, between Oct. 9, 2002, and May 9, 2003 (Oct. 9 being the market's low), the Dow Jones Industrial Average jumped 18.1 percent. If that pace continues, the Dow will be up 31 percent for that 12-month period. The S&P 500 Stock Index went up 20.1 percent since last Oct. 9, an annualized return of 34.4 percent. Even the NASDAQ, the home of those once highflying technology stocks, is up 36.4 percent since Oct. 9, an incredible annualized rate of return of 62.5 percent.
Financial advisor and analyst Ric Edelman tells me (full disclosure, he's also my personal financial advisor), "If you're thinking the stock market is in the doldrums, you haven't been paying attention. The truth is that the stock market has been turning around, and it's looking much better than it has at any time in the past three years."
In an interview, Secretary of the Treasury John Snow predicted an economic upturn will be visible "by the fourth quarter of this year." He said there will be a "little lag" while the tax cuts kick in. "We're now in the implementation phase of changing the withholding tables and preparing to send out to 25 million families the checks for child credits. Lower tax rates will be in effect by next month. And when people have more of their money to spend, they'll do something with it, and it will be good for the economy."
To the critics - moderate Republicans and liberal Democrats - who charge that the tax cuts are a boon to the rich and do nothing for the poor, Snow responded, "That's creative and inventive, but wrong economics. What the tax plan does is create a bigger and stronger economy. This bill will help everyone in the American economy."
Snow said we are "already in a recovery, but it's too slow and not robust enough." He believes that as people have more disposable income, more of the unemployed will go back to work. He said the deficit "doesn't concern me terribly now. Longer term we may need to worry more about Social Security and Medicare, but right now the deficit is manageable and modest. The real deficit is the deficit in growth rates and job creation, and that's what this (tax) bill addresses."
Snow predicted growth rates "in the high 3s, maybe over 4 (percent), and when you do that you put a lot of people back to work and you begin to address the deficit the right way. "
Confirming a personal prejudice of mine, Snow said, "We don't have a revenue problem. The government gets plenty of revenue. What's wrong is that the government spends too much money. The president has made it clear he wants to rein in that spending." Snow said Congress "should limit discretionary spending to the size of the increase in the typical family budget. That's 4 percent. We ought to try to limit the government's appetite to 4 percent at the most."
If the administration's economic forecasts come true, George W. Bush will be unbeatable in 2004. That's what worries his opponents, who have nothing new to say about the economy, or anything else, other than their standard class-warfare rhetoric. This administration's successes could produce a 40-plus state electoral blowout and add to Republican congressional majorities, which might approach Ronald Reagan's 1984 reelection in which he captured 97 percent of the electoral votes.
If you're a Democrat, you should be worried.
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