WASHINGTON – America’s economy is strong. Or it’s in trouble. It just depends on who’s talking.
Trying to retool his message and right his listing presidency, President Bush is speaking out more frequently and forcefully on the economy.
It’s in good shape right now, his advisers say, and they want him to take more credit for it.
The latest reports show healthy increases in economic growth, job creation, home ownership, retail sales and consumer spending. The Dow Jones Industrial Average is at a six-year high.
“This economy is powerful, productive and prosperous and we intend to keep it that way,” Bush says.
Across town, Democrats are peddling a different message: Soaring gasoline and health care costs are burdening ordinary people; mortgage costs and credit card rates are on the rise; jobs are threatened by outsourcing.
As for those tax cuts treasured by Bush, Democrats argue they have benefited mainly the wealthy.
“There’s no sharing in the prosperity that the president likes to herald,” House Democratic leader Nancy Pelosi of California said.
Friday’s unemployment report, showing the jobless rate holding steady at 4.7 percent with a lower-than-expected job-creation rate of 138,000 in April, was seized by both sides to buttress their great-economy/troubled-economy arguments.
Each party accuses the other of “cherry picking” statistics to bolster its case.
Nearly every major national issue – Iraq, energy policy, immigration – already is politically polarized. Thus it’s no surprise the economy is, too.
So much so that Republicans and Democrats depict it in terms that are 180 degrees apart.
“One reason the president can’t get a lot of traction when talking about the good economy is because it’s not good for everyone,” said Mark Zandi, chief economist at Moody’s Economy.com.
“If you’re from a wealthier household, the economy is performing very well. You have a job, your income is rising, your net worth is about as strong as it’s ever been,” Zandi said.
“If you’re a lower or middle-income household, you’re struggling. Your incomes aren’t rising, certainly not as fast as inflation, so your standard of living is falling. You have debt and interest rates are rising,” Zandi said.
Former Sen. John Edwards of North Carolina, the Democratic nominee for vice president in 2004 and a 2008 presidential prospect, talks about “two Americas” – one for the poor, one for the rich. Many economists suggest parallel economies exist as well.
Since former budget director Joshua Bolten took over as Bush’s chief of staff late last month, the president and his lieutenants have been busy emphasizing good economic news.
Bush called a Rose Garden news conference to trumpet the stronger-than-expected 4.8 percent economic growth for the January-March period. He welcomed Friday’s jobs report as more good news. He credits tax cuts passed during his first term for putting $880 billion into the hands of consumers and businesses and fueling a five-year recovery.
While the administration acknowledges that rising energy prices pose a potential drag, officials insist they are moving to ease the pain at the pump.
Bush relaxed environmental standards on gasoline additives; called for a temporary halt in filling the nation’s emergency petroleum reserve; and pushed lawmakers to act to encourage alternative energy supplies. He also ordered a federal investigation into price gouging, although said he has seen no evidence of it.
Even so, a new AP-Ipsos poll shows public approval of Bush’s handling of gas prices at just 23 percent.
Senate Republicans jumped into the act by proposing to send out $100 checks to help defray higher pump prices. That backfired and was widely scorned. It was withdrawn.
Democrats have proposed suspending the federal tax on gasoline, which amounts to 18.4 cents a gallon. That proposal hasn’t generated much enthusiasm, either.
Trying to benefit from Bush’s misfortunes, Democrats are working hard to stamp high oil prices as a proxy for the overall economy.
“If economists have their set of leading economic indicators, so do ordinary citizens. And for ordinary citizens, these are the cost of gas and the cost of health care,” said Mark Mellman, a Democratic pollster and consultant. “When they see health care costs high and gasoline prices through the roof, they think the economy is in trouble.”
Lamented GOP conservative consultant Greg Mueller: “We’ve let the good economy become a discussion about gas prices.”
Economists are concerned that high gasoline prices eventually will take a toll on overall consumer spending. But so far, there have been few signs of a weakening economy.
“The economy’s doing fine. We just don’t know what’s going to happen next,” said David Wyss, chief economist at Standard and Poor’s in New York.
Rising gasoline prices, he said, serve as a constant reminder of potential dangers ahead.
“If I was a Republican, I’d be running a little scared. Either way, you’re going to get blamed – blamed for Iraq, blamed for oil prices which are connected to Iraq in people’s minds,” Wyss said. “People always want to blame someone else when things go wrong and take credit with things go right.”