- The Washington Times - Sunday, May 6, 2001

George W. Bush is being accused of a terrible sin: "talking down the economy." Sen. Tom Daschle, South Dakota Democrat, recently complained that Mr. Bushs negative vibes are "very harmful to the economy."

Apparently, what we need from Washington now to bring jobs back and rally the stock market is happy talk. When Mr. Bush refers to the slump in the economy or mentions the dreaded "R-word," he is accused of torpedoing the economy for his own political gain. The left is still stewing over a statement made by Dick Cheney right after the elections when he urged passage of the Bush tax cut because "we might be on the verge of recession." Goodness, how reckless of the vice president.

The allegation that the Bush administration has been exaggerating the weakness of the economy is absurd on several fronts. First, the economy is weak. The latest economic news that the gross domestic product grew by 2 percent in the first quarter of 2000 points hopefully to our steering clear of a recession. A recession is technically two consecutive quarters of negative economic growth. But we´re hardly out of the woods yet.

The manufacturing and high-tech sectors have been in recession for at least eight months now. The Federal Reserve Board reported last month that Americans lost some $2 trillion in the stock market in the fourth quarter of 2000. That´s a far cry from prosperity.

In any case, how in the world does George W. benefit from economic pessimism? Let´s assume for a minute Mr. Bush´s critics are right: that Mr. Bush´s mere utterances can cause a crisis in confidence and that a gloomy outlook from the White House can become a self-fulfilling prophecy. If that´s the case, the administration´s incentive is to be as Pollyanish as possible. After all, it´s Republicans, not Democrats, who are going to get thrown out of office en masse in 18 months if the economy continues to tank.

Mr. Bush hasn´t been talking down the economy at all, in fact, if anything he has been too slow to acknowledge the slowdown. He has refused to capitalize on the ailing economy to boost the case for a bigger and faster tax cut. In fact, it´s the Democrats, not the White House, who have proposed an $80 billion tax rebate stimulus this year to get money into the pockets of consumers quickly. What for, if we´re not in recession?

When George W.´s father was president the very same liberal critics skewered Bush Sr. for his failure to acknowledge and respond to the recession. George Bush Sr. was said to be insensitive to the plight of the working man out of touch and unable to "feel the pain" of real America. Now the son is attacked for being overly sensitive to laid-off workers and for paying too close attention to the stream of negative economic news. The Bushes can´t win.

But here´s the most preposterous allegation of all. In an April 13 commentary in the National Journal, titled "The power of negative thinking," reporter John Maggs says George W.´s economic pessimism is nearly unprecedented. He quotes Andy Kohut, director of the Pew Research Center, who says he has never heard a president be so consistently dour about the economy. According to Mr. Kohut: "We´re in new territory here. Presidents usually say 'everything is great, and I´m responsible.´ Now we have one saying 'everything is lousy,´ and 'I´m not responsible.´ "

Mr. Kohut, I would like to introduce you to someone. His name is Bill Clinton. There has arguably never been a president who talked down the economy more persistently for political gain than Mr. Clinton. His mantra as president was that "we have the worst economy in 40 years." When he announced his record tax increase to the American people, he said it was necessary because the budget outlook was "much worse than I thought." This was all utter hogwash. The economy had grown at a brisk pace for a full year before Mr. Clinton became president. The budget outlook did not change much before and after Mr. Clinton´s election.

Mr. Clinton was aided in this canard by a compliant media that throughout the 1992 presidential campaign portrayed the U.S. economy in the most dire terms, even though the recession ended in mid-1991.

One last point. Can presidents successfully steer the economy up and down just through their words of confidence or malaise? Perhaps a bit. Jimmy Carter just exuded doom and gloom, and every time he opened his mouth the country seemed to take a turn for the worse. Ronald Reagan´s optimism and can-do attitude was clearly contagious and buoyed investor confidence.

But let´s face it: There´s only one politician in this new-economy age who can magically move markets with a mere gesture, facial expression or brief utterance. And his name is not George W. Bush. It´s Alan Greenspan.


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