- The Washington Times - Thursday, October 31, 2002

Three veteran Democratic strategists are telling their party's candidates not to play up the economy as an election issue in the final days of the campaign.

The reason? It doesn't help Democrats.

This surprising advice from three Clinton-Gore campaign consultants James Carville, pollster Stanley Greenberg and Robert Shrum has cast a pall of gloom over many Democratic leaders.

It flatly contradicts the central campaign strategy devised by Democratic leaders Richard A. Gephardt and Tom Daschle. Moreover, it apparently rejects polls showing that the economy remains voters' No. 1 concern.

But a detailed memo that Messrs. Carville, Shrum and Greenberg circulated to Democratic officials said, "While the economy is creating the desire for change and impatience with the Republicans, it is not the kind of wedge or unambiguous campaign issue that should become your sole focus in the last week." Statistics from Mr. Greenberg's Oct. 22-24 poll of 1,001 likely voters delivered the bad news: Republicans have a one-point edge over the Democrats on who can best handle the economy. "Today, the country splits evenly on which party to trust on the economy," according to the memo.

The poll gave voters a variety of hypothetical tests to measure what issues triggered the strongest responses for the Democrats.

The surprise finding: When voters are given a choice between "the Republican candidate with their broad message on security, taxes and pro-prescription drugs against a Democrat focused on getting the economy moving and critiquing Republican policies the contrast produces no shift to the Democrats. The economy is what creates the mood for change, but it has not been sufficiently polarized to make this an economy election for your campaigns in the last week," the memo said.

The underlying economic reality behind such findings is that, while the U.S. economy may be anemic (worse in the manufacturing sector), its component problems have not reached anywhere near critical mass.

Unemployment is at 5.6 percent, which for most economists is nearly at full employment. Housing sales are at record levels. Refinancing of home mortgages, at bargain-basement interest rates, has put more money into people's pockets. Consumer spending has held up reasonably well, all things considered. Corporate earnings have improved somewhat. And the stock market has shown bullish signs this month, interrupted by periodic bouts of insecurity and profit-taking.

Manufacturing remains in a slump in large part because of a weakened global economy, especially in Europe, the Pacific Rim and much of South America, which is drifting dangerously leftward. That has hurt U.S. exports, which in turn has forced factory layoffs.

Here at home, though,some deeper political blunders lie at the heart of the Democrats' acknowledged inability to get more voters to trust them on economic policy.

First, it is pretty clear that the Gephardt-Daschle strategy of playing class warfare and soak-the-rich politics is not working. Sen. Zell Miller, Georgia Democrat, denounced his party's leadership on this score in an interview with me last year, and he has proven to be right. It turns off Democratic voters.

Nowhere is this clearer than in Mr. Miller's state, where Democratic Sen. Max Cleland is in the political fight of his life against Republican Rep. Saxby Chambliss, who is campaigning on abolishing the capital gains and death taxes. Mr. Cleland was considered a shoo-in, but this week the race is in a dead heat.

Second, the Democrats have forgotten the old political axiom that "you can't beat something with nothing." They have no economic growth plan of their own, beyond an 11th-hour, patchwork, big-spending proposal that will not create any jobs. And that is hurting them more than anything else especially with the suburban vote, office park dads and many professional working women.

With the rise of the investor class, who make up two-thirds of all likely voters, the American electorate is a lot smarter about economics than it was 10 or 20 years ago. Tax-deferred or tax-free IRAs, Roth IRAs and 401(k) plans (which Democrats once opposed as giveaways to the rich) and the rise of mutual funds have made ordinary Americans the owners of our capitalist economy. And that is changing the political landscape year by year.

Yet, Democratic leaders (not the 12 Democrats in the Senate who voted for President Bush's tax cuts) are still fighting the idea that lower tax rates stimulate investments, jobs, work, savings and growth.

That is why Republicans have a slight edge right now on economic policy, even in an economy that is not performing as well as it should.

Of course, this election could turn on other issues, too, such as war in Iraq, terrorism and homeland defense. But at the end of Stan Greenberg's poll, he asked voters which party they planned to support for Congress. The result was a dead heat: 45 to 45.

No wonder usually cautious Republicans whose turnout is always underestimated in midterm election polls were cheering this week.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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