The Reagan Question: Are You Better Off Than Four Years Ago?
During the 1980 presidential campaign, Ronald Reagan quickly deflated Jimmy Carter’s reelection bid with a simple question, asking the American people, “are you better off today than four years ago?” The answer, at a time of high unemployment, staggering inflation, spiraling energy prices, and hostages in Tehran, was an obvious - and devastating - no.
Now it’s George Bush’s turn to face the Reagan question. And as with Jimmy Carter, the verdict from the American people won’t be kind: the numbers speak for themselves.
Gloomy Unemployment Picture. For this administration, the employment numbers are grim and inescapable. 8.2 million Americans are out of work and the unemployment rate is mired at 5.6%, 30% higher than its level of 4.3% of March 2001. 2.35 million jobs have disappeared during Bush’s presidency. Even with strong GDP growth topping 4%, the economy produced virtually no new jobs in February, with the meager gains of 21,000 jobs completely due to government hiring. In February, workers’ wage growth was the slowest in 18 years; the average duration of unemployment at its greatest in 20. Worse still, 392,000 people essentially gave up on hopes of employment and left the workforce in February, plunging labor force participation to a 15 year low of 65.9%. "It's hard to imagine a more negative reading of the labor market," said Larry Mishel, president of the liberal Economic Policy Institute.
Unfortunately for President Bush, the consensus prognosis from market analysts is equally dark. “The economic recovery is almost three years old, and the economy should be producing 200,000 to 300,000 jobs a month,” noted Wells Fargo chief economist Sung Won Sohn, adding that, “unless the labor market gains some steam and momentum, both real income and confidence of consumers would be hurt.” Stephen Stanley, chief economist for RBS Greenwich Capital, reached the same conclusion, stating, “It's very disappointing…we keep waiting to see growth translate into job gains and its just not happening.” Perhaps the bluntest assessment comes from Carl Tannenbaum, chief economist at Chicago's LeSalle Bank/ABN Amro, “Conditions aren't getting any better and may be getting worse.”
Exploding Federal Budget Deficit. In just three short years, George W. Bush has vaporized a U.S. budget surplus projected when he assumed office to reach $5 trillion by 2010. Even accounting for the war and an economic recession, it was his irresponsible, inequitable, and unjustified tax cuts of 2001 and 2003 which have played a key role in eviscerating the $237 billion surplus he inherited from Bill Clinton. President Bush’s FY 2005 budget, one greeted with “shock and awe” on both sides of the aisle, features a record federal budget deficit of $521. With Bush’s goal of making those tax cuts permanent, his State of the Union promise to halve the deficit by 2009 is sheer fantasy, as the nonpartisan Congressional Budget Office projects.
The President’s mismanagement of the budget presents real dangers to Americans in the years ahead. The Government’s raiding of the Social Security Trust Fund will grow at precisely the time that the Baby Boomers begin the retire. (Even Fed Chairman Alan Greenspan, who carried the President’s water on the 2001 tax cut, made this clear in his congressional testimony.) It comes as the states grapple with their own budget deficits, deficits that threaten critical programs including Medicare and Bush’s own “No Child Left Behind” education program. Worse still, out-of-control government borrowing, largely from foreign lenders, threatens to raise interest rates, choke off private sector investment, and jeopardize the housing market, one of the few bright spots in the Bush economy. George Bush has turned his back on the sound fiscal practices of his Democratic predecessor, to all of our detriment.
Mushrooming Trade Deficit. Under his watch, the U.S. trade deficit has ballooned to record levels, reaching $43.1 billion in January 2004. Imports topped $132 billion, the second highest level on record. China’s trade surplus with the U.S. reached $11 billion, with Japan at $5.3 billion, Canada at $5.2 billion, and Mexico at $3 billion.
In Bush’s defense, these numbers in part do reflect the strength of the U.S. economy relative its trading partners, as well as the impact of the Mad Cow panic on American food and agriculture exports. But with the dollar’s precipitous drop, the trade picture should already be improving as U.S. exports gain from lower prices abroad. And with prices for imported oil and natural gas rising, the dollar’s weakness is hurting Americans at the fuel pump as gasoline prices near all-time highs. As a result, for the first time in 20 years, the specter of inflation looms in the distance.
Building Health Care Crisis. As the Democratic primaries showed, the availability and cost of health care is one the most important issues to voters in 2004. As it should be; the number of Americans without health insurance jumped by 2,000,000 to over 43 million during George Bush’s term. The president’s proposed medical savings accounts (MSAs) and association health plans (AHPs) would do little to expand access or curb rising costs, as insurers merely cherry-pick businesses and individuals who are healthier, younger and in need of less care. Meanwhile, Bush’s Medicare reform jumped in cost by $120 billion within two months of its passage. Designed in essence to privatize the Medicare program starting in 2010, it doesn’t not even begin delivery of its limited prescription drug benefit to seniors until 2006.
In 2004, candidate George Bush is cynically painting a false picture of economic recovery, even running ads casting blame on Bill Clinton for an “inherited” recession. Beyond citing the economy’s few bright spots (GDP gains, strong housing sales, and low interest rates), the Bush team in its Economic Report of the President brazenly forecast that 2.6 million new jobs would be created in 2004, numbers it that it once again knew were false and without foundation. Bush’s own cabinet balked at the fraud, as Commerce Secretary Donald Evans and Treasury Secretary John Snow refused to endorse the job estimates coming from the White House. (By the Sarbanes-Oxley standards of CEO accountability, rather than those of Karl Rove, President Bush would be looking at some time in a different “big house.”)
For most Americans in 2004, the simple answer to Ronald Reagan's simple question is “No.” For George W. Bush, it’s not just the numbers that tell the tale; millions of Americans live the harsh reality those numbers describe every day. And like his father and Jimmy Carter before him, George W. Bush will pay the price and find that he, too, is out of a job.