WASHINGTON - With the hoopla over the war, little notice has been given to the state of the U.S. economy. But when a White House official says it's “bad news,” we're in for trouble.
Jobs are disappearing like bottled water in Umm Qasr. A statue falls in Baghdad and the stock market plummets. Deficits are again a fact of life. Pollsters ask: Are you more worried about the aftermath of the war against Iraq or losing your job?
Secretary General D. Johnston of the international Organization for Economic Cooperation and Development says the global economy will pick up - in 2004. He sounded an especially sobering note when he said restoring order and meeting Iraq's humanitarian needs must be done quickly and that it will be expensive.
Again this month, continuing a trend begun in May, 2002, the OECD's composite leading indicators are down - significantly for the United States.
When White House spokesman Ari Fleischer said that new unemployment figures - 108,000 jobs lost last month alone - and other economic indicators contained bad news, he said Congress must give President Bush his $726 billion tax cut.
The Senate has chopped that to $350 billion, but Mr. Bush thinks the House will force the Senate to ratchet it back up. However, both figures would add to the deficit.
What happened to pay-as-you-go? Deficits matter. They reduce national savings and hurt economic growth. They raise interest rates. They leave families and nations with less financial flexibility.
Meanwhile, three out of four Americans say they approve of Mr. Bush's handling of the war. Even though Osama bin Laden is still on the loose, Americans say they applaud his prosecution of the war on terrorism. But when it comes to the economy, slightly more than four out of 10 say he's handling it well.
One of the cruelest lessons that presidents learn - all presidents - is that if they are credited, usually unfairly, for good economic times, they are lambasted greatly, if also unfairly, for bad economic times.
There is little evidence that the massive tax cut Mr. Bush keeps pressing for will cure the country of its economic ills. But it is something Mr. Bush and those around him believe in, and he can't think of anything else to do. Knowing Congress won't give him the entire $726 billion he seeks, he'll be able to blame lawmakers if the economy stays stagnant.
Mr. Bush certainly is wary of his father's fate. In 1991, after the first Persian Gulf War, the elder Bush had a job-approval rating of 89 percent. In November, 1992, he lost the presidential election, big-time, because people refused to believe the recession was ending. They weren't impressed that he went out to buy socks. The economic figures improved days after the election, too late for Mr. Bush.
Next year - an election year, Bush the son could find himself in the awkward position of having ousted Saddam Hussein, but becoming the first president in more than 50 years to preside over the loss of more jobs than were created. Democrats are afraid to attack him on the wisdom of the war; they will feel no such compunction in talking about a net job loss.
At the moment, the country is in no mood to have an election. Times are tense. Americans feel vulnerable to terrorists. They want a strong commander in chief.
But the ripple effect of job losses could turn into a riptide. Savings are disappearing faster than jobs. Many unemployed workers have stopped looking. Mortgage refinancings have saved a lot of folks; Federal Reserve Chairman Alan Greenspan says that's about to slow down. Forty million people have no health insurance. Most of all, workers receive no loyalty in the workplace and feel expendable because of it.
Mr. Bush is not his father. He's a far more astute politician - the day after Baghdad fell, for example, he met with business leaders to discuss ways to improve the economy.
He is as determined to win a second term as he was to oust Saddam, in part to vindicate the Bush family. He understands we're a changed nation after 9/11, with different priorities. And even though foreign policy usually does not win votes, if the campaign in Iraq is judged a success, Mr. Bush might even get what he wants from Congress, including a prescription drug plan, just in time for the election.
His aim is to ride into the election on the fastest steed in the race. Metaphorically. Even though he's a rancher, Mr. Bush does not ride horses. Too unpredictable.
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