Like his father before him, George W. Bush is embarking on economic policy that fuels the perception that he is out of touch with financially stressed Americans.
To relate to the common man struggling to make ends meet during recessionary times, the senior Bush made a trip to the grocery store. It was painfully obvious the event was a foreign experience to the president who was as perplexed with the price of milk as he was with the new-to-him scanners in the checkout lines.
His son, who is likewise on the cusp of a recession or smack in the middle of one - depending on your degree of pessimism - is aggressively promoting his stimulus package as the sure-fire way to economic recovery. But his previous tax rebate cure-all for what ails the economy didn't resuscitate it and neither will his stimulus plan.
There was no overriding incentive for confidence-challenged consumers to spend their tax rebates and many didn't. The same applies to the corporate beneficiaries of a proposed tax relief package. Corporations will probably sock the savings away in the absence of any new incentives to invest.
The old “trickle-down” theory has come full circle. It didn't work in the early 1980s and won't dramatically affect the grim economic picture now. And while the President puts all his eggs into one stimulus plan, urging Congress to get it to his desk by the end of this month, the nation continues a slide into recession.
The third quarter of this year showed an economy shrinking by the sharpest rate in more than a decade. Many predict the fourth quarter will exhibit an even deeper drop, officially signaling the start of a recession with two straight quarters of economic downturn.
Business investment is down, unemployment is up, consumer confidence remains depressed, layoffs mount, stocks tumble, and Sept. 11 made everything worse. Fear hasn't exactly caused Main Street to roll up the sidewalks, but uncertainty and apprehension over unpredictable events, both domestic and foreign, has markedly slowed the engine that runs this country.
The good news is that the contraction in the third quarter was lower than widely expected, the sharp drop in business investment in new buildings and equipment was not as bad as the second quarter, and inflation is still in check thanks to an ever-wary, ever-rate cutting Fed.
But the booming 1990s party of stock market stratospheres, record lows in unemployment, and unprecedented budget surpluses is over. When the economy will rebound is anybody's guess but continuing terrorist threats may make the light at the end of the tunnel difficult to spot.
It will take several market factors working to complement each other to avoid a full-fledged economic downturn. A hastily enacted windfall that primarily benefits corporate America won't do the job and suggests the Bush administration, preoccupied with war, doesn't have a grip on the advancing economic battle under way at home.