Over a year ago, we were all warned by those few economists who had not drunk the Administration's tax-cuts-will-save-us-all kool aid that the time would come, probably prior to the 2004 election, when the short-term stimulus of Bush's latest tax-giveaway to the rich would run out.
Despite Alan Greenspan's assertions that June was just a "blip" in the recovery, not a full-fledged economic slowdown, between sagging durable goods orders, new construction, and consumer spending, and skyrocketing oil prices, the US economy has been looking rather shakey lately. So what is an incumbent administration to do, particularly when polls show voters are concerned more about the money missing from their wallets than Osama missing from US custody?
While I appreciate Howard Dean's gumption in calling the Administration's bluff on the recent terror warnings, I wonder if he, and others making similar assertions, got the motivation wrong. Yes, there's a wagging going on, but maybe the dog is not Kerry's increasing poll numbers, but the slumping "recovery".
What would lead me to such a cynical hypothesis? This paragraph from Nell Henderson's piece this morning in the WaPo for starters:
But the strategic attack plans revealed over the weekend did serve to highlight the asterisk in analysts' forecasts of a strengthening U.S. economy heading into the fall. The continued threat of terrorism contributes to an uncertain future that has made businesses reluctant to commit to long-term investments and has kept oil prices high, both serving as drags on the economy.
George W. Bush blamed the 9/11 attacks for the huge job losses under his watch, most of which occurred long after the period most analysts point to as "economic fallout". It now appears the Administration believes it can do the same this summer and fall if the economy continues its rapid braking. "It's not the fault of our failed economic policies: The markets are just skittish because of all those terrah threats!" See, if we elect John Kerry, whose only Achilles' Heel is that he's not viewed (in polling) as capable on terror as Bush, our economy will continue to flail!
If I were to completely pull the tinfoil over my head, I'd say watch for a major drop in oil prices when some top tier terrorist is dragged out in chains from the foothills of Pakistan (Of course, it's really just the House of Saud briefly increasing production to help out an old friend.)
Update just prior to publishing: More bad economic news - personal income dropped 0.4% and personal spending dropped 0.7% in June. Ouch!!!
Posted by MB Williams at August 3, 2004 08:23 AM | TrackBack