A Political Reality Check On The Economy

Analysis: The Economy Matters To Voters But Not In The Way It Used To

(US News)  This analysis was written by U.S. News and World Report columnist Michael Barone.

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"It's the economy, stupid," James Carville famously said during the 1992 campaign, when a young Bill Clinton was running against the other President Bush. The same could be said during this presidential campaign. The headlines are full of economic bad news - mortgage foreclosures, the collapse of an investment bank, higher gas and food prices, lower home prices. Voters routinely list the economy as their chief concern, and consumer confidence has sunk to low levels.

Yet at the same time the economic numbers are not so bad. A recession is defined as two quarters of contraction. But we haven't had one yet. The gross domestic product has grown, albeit by only 0.6 percent, in the past two quarters. As my U.S. News colleague James Pethokoukis blogged after the most recent numbers came in, "Dude, where's my recession?"

By any historic standard, our economic numbers are good, though possibly headed in a negative direction. April's unemployment was 5 percent - a figure that once upon a time was considered full employment. The Consumer Price Index was up 3.9 percent, largely due to price rises in energy and food; core inflation was 2.3 percent. Productivity was up 2.2 percent.

Those are numbers that would have been taken as a sign of very good times when I was growing up. Then we had recessions every four or five years, bad bouts of inflation in the 1940s, 1950s, and 1970s, and unemployment that sometimes surged to 10 percent nationally and to 15 percent in industrial states like Michigan. In contrast, we've had only two mild recessions since 1983, with a third now possible but not yet in view.

In those 25 years, we have had low-inflation economic growth more than 90 percent of the time - something never before achieved in American history. Alan Greenspan titled his memoir The Age of Turbulence, but the story he tells is one of the amazing resilience of the American economy. Hit by one shock after another - a stock market crash in 1987, currency meltdowns in Mexico in 1994 and in Asia in 1997, the collapse of Long-Term Capital Management in 1998, the September 11 attacks, and the Enron collapse in 2001 - our economy has adapted and kept growing.

In the America I grew up in, the political effects of economic issues were clear. Voters, most of whom had vivid memories of the Depression of the 1930s, tended to vote for Democrats when the economy sagged. Political scientists produced formulas for predicting elections that were based largely on macroeconomic indicators: If the economy was growing, the incumbent party's presidential candidate would win; if it was in recession, he'd lose. But those formulas don't work any more. If they did, Al Gore would have been elected by a comfortable margin in 2000.

Today, few voters remember the 1930s; the median-age voter has lived all his adult life in a period when low-inflation economic growth has become the norm. Voters take a good economy for granted and are enraged by any irritation. But who is to blame? The subprime mortgage crisis was brought about by policies encouraging homeownership supported by George W. Bush and members of Congress of both parties. Monetary policy is made by Federal Reserve Chairman Ben Bernanke, who has bipartisan support.

Polls suggest votes are not moving in response to local economic conditions. Recent polls in Michigan, the No. 1 state in unemployment, show John McCain running even with Barack Obama, even though George W. Bush lost the state by 3 percent in 2004. And Obama is running much stronger than John Kerry did in Great Plains and Rocky Mountain states with very low unemployment. But then Obama is advocating fiscal and trade policies - higher taxes on high earners, more protectionism - which are the opposite of John F. Kennedy's and the same as Herbert Hoover's. Yes, the economy matters in politics but not in the way it used to.

[whitepicks2]

No matter who''s the Dem nominee, and no matter their economy policy, Repubs always cry ''Raise your taxes.'' Obama will provide 150 million workers tax relief by cutting the payroll tax by creating a ''Making Work Pay'' tax credit of up to $500 per person, or $1,000 per working class/middle class family. The tax credit will completely eliminate income taxes for 10 million Americans.

Obama has said he would roll back the Bush tax cuts -- a return to year 2000 rates -- for people earning over $250,000 of which comprise 2 percent of all Americans.

I''m amazed at how 98 of 100 Repubs have been trained to defend the other 2 puppetmasters.

[mudrose-2009]

Caliguy55,

well put, the republicon party is completely controlled by the corporatists, they are, or have become,
true fascists,

every vote for a republicon is nothing but anti american treason

Posted by joyous88

Why don''t you socialist junkies go fkk yourselves. Every vote for RamaLamaObama the Effendi Snob-oma, will give us increased taxes and it isn''t big business or the rich. He will increase the social security tax which hits just about every working person in the country, raise capital gains - kiss your 401Ks tata, impose cap and tade policies that is another big fat gain for the Government, impose universal health care that will tax all Americans beyond belief. But you sit there and cry your class warfare against 10% of the population. Oh, and those corporations you hate so much, well hey, keep on taxing them and then wonder why business is crossing the border or going overseas for cheaper labor. Your party panders to Unions, lobbyists - Boxers big energy bill that go voted down becaue it''s the biggest tax hike and government aggrandizement in the history of this country. But you vote Democrats, the party of the peasant and BIG TITTY NANNY GOVERNMENT. bOZOS.

[joyous88]

Caliguy55,

well put, the republicon party is completely controlled by the corporatists, they are, or have become,
true fascists,

every vote for a republicon is nothing but anti american treason

[caliguy55]

This information doesn''t surprise me at all. I knew Bush was a pathological liar given his performance in the campaign for the Presidency in 2000. Time after time, Bush was caught in lies about everything from cocaine abuse to physical altercations with his father on a public street in Washington, D.C. However, I can proudly state that I didn''t vote for Bush in 2000 nor in 2004. My only regret is that I didn''t push harder with what should have been an overwhelming majority of the American People to have Bush impeached as soon as it became obvious that he was leading our country down a path of self-destruction. This time around, I am working hard to see that McSame is not elected. Obama has already opened up a 10 point lead over McSame in the latest Zogby poll. Thus, it appears that the American People are not willing to be lied to by this Bush clone. In fact, all the evidence points to a landslide victory for Democrats in November, which provides us with the only hope of saving this country. I urge every American voter, who truly cares about this country, to vote for a young man and give him super majorities in Congress (it happened before in 1934) so that he can make the changes necessary to save our country. Personally, I consider a vote for senile, old McSame to be an act of treason since he has already made it known that he intends to follow the destructive policies of the Bush Administration.

[wardoglrs]

It dont matter if your a repub or dem there one and the same. You just dont get it when you talk of these things. There the same no differant. Obama has nothing to offer but false hope and delusion of hope.
Never about the real issuses just false hope.

McCain is just another Bush on steriods. You have better choices that the MSM wont tell you much about.
Dr Paul is the best choice of them all. America doesnt see the comming crisis and Obama doesnt see it either. Dr Paul did long ago and there for i am better prepared thanks to DR Paul. Get ready for hell on earth the neo cons are plotting in WV No media coverage nothing about this is being said to the public. If your informed good if not to bad so sad for you.

[joyous88]

omnibuss66,

right on

by the way fuel is over five dollars a gallon here,

and we don not get free health care for our money like they do overseas,

bush and the neo cons are nothing but fascist criminals,

they say government is the problem and government does not work,

BUT THE TRUTH IS THAT ONLY REPUBLICON GOVERNMENT

DOE NOT WORK

AND REPUBLICON GOVERNMENT OF, AND BY, GREED DRIVEN CONSERVATIVES , THAT IS THE PROBLEM

[omnibus66]

*** = j*e*r*k* - o*f*f*

[omnibus66]

"By any historic standard, our economic numbers are good"

Who is paying this *** to write this garbage, and why does anyone print it? Record foreclosures, $4.00 gas, 25% increase in food prices, jumping unemployment.

You know, a lot of stupid people voted for Bush, TWICE, but hopefully at least some of them have realized their mistake by now.

Prove you''re insane, vote for McCain.

[joyous88]

demwatcher,

you are just one more lying republicon, LIAR,

lying filth, lying to the american people should be a

felony, if it were, most of the Bush administration would be in prison right now,

you are a liar,

IF THE DEMOCRATS CONTROLLED THE GOVERNMENT WE WOULD NOT BE WASTING OUR MONEY AND LIVES IN IRAQ RIGHT NOW,

WE WOULD BE OUT OF IRAQ IF THE DEMOCRATS CONTROLLED THE GOVERNMENT,

THEY HAVE A SLIM MAJORITY, THATS ALL, CONTROL MEANS

THAT YOU HAVE SIXTY VOTES IN THE SENATE,

YOU MUST REMEMBER THE REPUBLICONS USING THEIR SIXTY VOTES TO IMPEACH BILL CLINTON, REMEMBER WHITEWATER?

YES WHEN THE REPUBLICONS CONTROLLED THE GOVERNMENT THEY WASTED 200 MILLION DOLLARS INVESTIGATING THE PRESIDENT AND BROUGHT US GW BUSH AND TRILLIONS MORE DOLLARS WASTED IN THEIR NEEDLESS WAR OF CHOICE.

LIAR

[babooph]

The Murdoch, GE&Westinghouse centrally controlled propaganda system has the masses brainwashed.With what the present as news,one needs a gag reflex with more control than a toilet in an aids ward.I envy the brainwashed fools.

[jn122736]

%u201C%u201DIn the year and a half since the Democrats took charge of Congress%u201D%u201D

%u201C%u201DAnd now, they want to control the White House so they can give us a tax increase greater than any in our history. Get your arse lube ready%u201D%u201D.

Posted by DemWatcher at 08:11 PM : Jun 07, 2
~~~~~~~~~~~~~~~~~~~~~~~~~~


DemWatcher,

That tax increase you are so afraid of has already been imposed, by the Bush/republican Borrow and spend police.

It%u2019s the INTEREST on the $9.5 trillion national debt (currently running at $.5 trillion EVERY year).

Taxpayers have had to pay nearly $3 trillion in interest alone, just during this Bush administration.

That%u2019s more money than we have spent on the Iraq fiasco, or most any other single annual expense.

That interest cannot be avoided or delayed (except with additional borrowing) and MUST be paid with our taxes, so it is, indeed, a MASSIVE tax increase

[jn122736]

%u201C%u201DWe%u2019ve had only two mild recessions since 1983, with a third now possible but not yet in view.

In those 25 years, we have had low-inflation economic growth more than 90 percent of the time - something never before achieved in American history.%u201D%u201D
~~~~~~~~~~~~~~~~~~~~~~~~~~~

During those 25 years the republican, borrow and spend, policies have increased the national debt from $1 trillion to $9.4 trillion ($.5 trillion in interest alone).

That%u2019s $8.4 trillion, borrowed to offset and/or reduce recessions.

There is an old saying (clichi) that goes:
Figures (numbers) never lie but liars figure.

They can, and do, use figures to twist facts, to insinuate the opposite of the truth.

[homespunlady]

DemWatcher

Wasn''t it GWB in SAUDI ARABIA (Homeland of OSAMA BIN LADEN) on his KNEES BEGGING his "friends" and PROMISING TO GIVE AWAY our NUKE TECHNOLOGY to them?

Too bad GATES couldn''t FIRE SHRUB for "mismanaging" our NUCLEAR objectives.

Think about it SAUDI sitting on a SEA of OIL, THE WORLD LEADER of OPEN DESERT AND POTENTIAL SOLAR energy -as well as WIND ENERGY and they "need" our NUKE TECHNOLOGY for ENERGY?????

Yeah, right....like those 15 of the 19 TERRORIST HIJACKERS just "happened" by "accident" to BE SAUDI!

and WHO is SITTING ON "production" to JACK UP PRICES according to the G8 Meeting being HELD IN JAPAN this week??

OH, GWB''s "good friends" of course.

International ECONOMIC BLACKMAIL is such a NASTY thing --too bad George and his CRONY "FRIENDS" seem to be IN THE THICK OF IT.

ALL the items you mention have LAG TIME - the economic IMPLOSION WAS planned by the NEOCONS for the NEXT President and came EARLY to BITE them in the backside.

AS USUAL GEORGE "MISINTERPRECALCULATED" or some similar STUPIDLY mangled word meaning totally F-ING UP everything he''s ever had ANYTHING to do with.

[demwatcher]

In the year and a half since the Democrats took charge of Congress:

The price of gas has risen over 25%.

Up to 4% of Americans are either in danger of foreclosure or already have lost their homes.

The National Debt has kept going up.

Consumer confidence is plummeting.

We are still in Iraq.


And now, they want to control the White House so they can give us a tax increase greater than any in our history. Get your arse lube ready.

[greatdrivew]

joyous88:

I don''t think you''re a McCain supporter, but you did a good job answering the question on my last posting.

Are you a mind reader? You answered my post before I even posted it.

Thanks, joyous!!

[greatdrivew]

Obama supporters are drawn to truth, facts and issues. So with this article being about the economy, I thought it would be a good time to compare Obama and McCain.

As I understand it, the Obama economic plan includes the following:
1. middle class tax cuts
2. target domestic investment in energy and other infrastructure
3. reduction in war spending
4. rational monetary policy
5. end tax breaks for companies who ship jobs overseas
6. renogotiate NAFTA to include enforceable labor and environmental standards.
7. assistance for mortgage holders who were duped by unfair lending practices

I''m certain I failed to include an policy plan or two.

But that aside, would any McCain supporters care to elaborate on the McCain economic plan?
.
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.
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***crickets chirping in background***
.
.
Ummm, hello?

[joyous88]

the republicons are the new NAZI party

all they care about is corporate welfare,

they will not spend a dime on any of the disabled

veterans they have created with the republicon war of choice

[samthetvcat]

---"Yet at the same time the economic numbers are not so bad"---

I think the GOP are going to have to comp up with an explanation as to why growth is LESS with normalized trade with China and tax cuts then it was under the Democrats.

Bush indiscriminately cut tax cuts for corporations and US economic growth went down (negatively correlated to our trade deficit) and China economic growth flourished (positively correlated to our trade deficit).

McCain in 1999 said %u201CIf I were president, I would negotiate a free trade agreement with almost any country.%u201D He voted for CAFTA and supports TAFTA . . . and given that it''s the GOP platform to use pursuit of free trade to create "not so bad economic numbers" irregardless of their effect on the standard of living for the average person, just how aggressive does McCain intend to get?

Also, he keeps claiming that Iraq isn''t about length of time it''s about casualties, but isn''t it too about the economy? Like to pay for the surge, hasn''t Bush denied or cut funding for programs such as rural economic development ($39million), technology innovation program ($49million), the ''reading is fundamental'' program ($25million), the ''national veterans business development program'' ($1mil - designed to help veterans start their own businesses), etc

[joyous88]

elz523

Do not forget that the fascist party does not count little things like "food" and "fuel" when they compute inflation,

Inflation is much higher if you do the "HONEST" thing

and factor in "ALL" of the things people need to live

not just the things the republicons need to make them

selves look better

[mcv57]

VOTE RON PAUL FOR PRESIDENT.

Posted by tylenol6

No, I don''t support KKK simpathers.