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Will the Economy Save Bush? (June Edition)

Well, it's that time of month again: the new jobs report is out and the usual spate of news stories have ensued, making the pretty good job numbers (248,000 jobs created in May) sound way better than they really are and, of course, speculating that this allegedly torrid pace of job creation will wind up taking the economy issue away from the Democrats.

As I said in the May edition of this post: not likely. And for basically the same reasons that were well-summarized in Paul Krugman's May 25 column on Republicans' "Delusions of Triumph" on the economy. I reproduce key parts of Krugman's column here, merely updating the numbers to take account of the new jobs report. Everything Krugman said in his column remains dead-on, even with this extra month of job growth taken into account:

Let's start with the [1.2 million new jobs] created in the last [five] months. Is that exceptional? Well, during the first [five] months of 2000, the last presidential election year, the economy created [1.4] million new jobs...[1.4] million jobs [have been] created since last August (when job growth finally turned positive). But in [May] 2000, payroll employment was [2.6] million higher than in August 1999.

And that was after seven years of sustained employment growth; rapid job growth is hard to achieve when the economy is already close to full employment. To find a year comparable to 2004, we need to look back to 1994, when the economy was still recovering from the first Bush recession. In the first [five] months of that year, the economy added almost [1.6] million jobs.

The experience of 1994 also gives us some indication of how likely job growth is to "redefine" an election. Between December 1993 and November 1994 the economy gained 3.6 million jobs, a number beyond the Bush administration's fondest dreams. Yet voters, convinced that Bill Clinton was leading the country astray, gave his party a severe defeat in that year's midterm elections. So it's interesting that a new CBS News poll finds that 65 percent of Americans believe that the country is headed in the wrong direction a level not seen since 1994.

He concludes:

And employment is chasing a moving target: it must rise by about 140,000 a month just to keep up with a growing population. In [May], the economy added [248,000] jobs. If you do the math, you discover that President Bush needs about four years of job growth at last month's rate to reach what his own economists consider full employment.

The bottom line, then, is that Mr. Bush's supporters have no right to complain about the public's failure to appreciate his economic leadership. Three years of lousy performance, followed by [three] months of good but not great job growth, is not a record to be proud of.

Well said, Mr. Krugman. And for further explanation of voters' stubbornly non-elated response to these modest economic improvements, let's turn to a May 24 Gallup report on their "Index of Investor Optimism" and how it may be being affected by the Iraq war.

A more plausible explanation [for economic pessimism], however, might simply lie in the unusual nature of the current economic expansion. Although job growth seems to have improved during the past couple of months, we are still experiencing one of the slowest job-growth expansions in history. This has combined with the outsourcing of jobs to foreign countries to produce a great deal of job insecurity for the average working family. In turn, this overall insecurity in the labor market has led to a compression of middle-class wages.

Now, we have an externally generated surge in energy prices and inflation that is creating significant financial hardship for many Americans. For example, 43% of investors say that the surge in gasoline prices has created financial hardship for their households. And, three in four of those experiencing such financial hardship say it is either moderate or severe.

Whether the overall economy is doing well or not, many Americans are experiencing a severe wage-price squeeze. As a result, it is not surprising that they are much less optimistic about the economy and the investment climate than many of their financially better-off counterparts. While Iraq may continue to dominate the headlines in the months ahead, it could be this wage-price squeeze that turns out to be the most important story as the presidential election approaches later this year.

These analyses are consistent with results of an ARG poll, conducted June 1-3, right after this allegedly spectacular month of job creation. The results show no lifting of the economic pessimism that is bedeviling the Bush administration.

Bush receives an economic approval rating of just 42 percent, with 53 percent disapproval, pretty very close to his 43/50 overall approval rating. (Note to horse race fans: the poll also shows Kerry leading Bush by 2 points, 48-46). Moreover, just 19 percent say the national economy is getting better, actually less than 27 percent who said it was getting better at the beginning of May. And only 27 percent say the economy will be better a year from now, a substantial drop from the 45 percent who were optimistic about the economy at the beginning of May.

Conclusion: the economic clouds over the Bush administration are not likely to lift anytime soon. And we're getting very close to the "lock-in" point in the election year where voters' views of the economy and the incumbent administration's handling of it become hard to change in time for election day, no matter how good the economic trends become.

In short, as far as the economy and the Bush administration go, the latest jobs report can reasonably be described as "too little too late", rather than as a harbinger of rebounding voter confidence.

Comments

My bet is the economy is still that the economy's going to be a scoreless tie five months from now. In other words, "Shrub" won't be able to crow that much about the improving situation, but nor will the economy be a potent weapon to Kerry except in isolated pockets such as Ohio.


MARCU$

Bush finally started running positive ads again (after a long break for vicous slander against Kerry). These are going to be about the economy and the new job numbers, etc. I don't think we'll know 100% about the public view on the economy until a month or so after those ads saturate the market.

I think the numbers only speak to the converted at this point. Abstract numbers do not mean a lot to the non-political voter. They care about their situation and the general mood that they see. As far as I can tell, that mood is crappy, and moods take a while to change.
Additionally, job security, and more importantly, wages play probaly the bigger part in this.
Do you fell like you will not be layed off, and do you feel as if your wages have grown more than you expected under Bush? My guess is that the agrregate answer to that question is no.

Let me add, that there is one statistic that may jump out at the non-political -- First President since Hoover to preside over net job loss.

That is the short, irrefutable (there is no time for Bush to recover on this unless we start seeing close to 900K jobs numbers), sound bite that comes to the fore in an election. Of course he will try to blame Clinton (the most popular retiring President in the modern era), but those calls are partisan when he needs swing, and they started to lose theor effectiveness about a year ago. So, to me the question for the Bush campaign is how do you account for net negative jobs while controlling all branches of government? ( and do you really want to say that you did not dip into deficit spending enough?).

Stats are fairly meaningless. Voters go with "feel", and my sense is that things don't "feel" like good times are here again.

One big reason is that Bush has spent four years pushing fear onto the American landscape, that I don't think his acting positive means anything to most voters. For things to get positive, we need change, which doesn't leave Bush in a good position.

My fear is that things will start to "feel" better in September or October just in time to help Bush...

But what do I know, maybe the thought of the next heating energy spike next winter will bother people.

Alan Lichtman in Keys to the Presidency divides the economic question into two, long-term and short term. As it stands now, Bush would resoundingly lose the first, but shakily win the second. This is what Gerald Ford had in '76, which kept him from a blowout loss but defeated him nonetheless. The short-term, however, is the more potent killer, so, for Bush, this rise at least staves off the certainty of defeat.

The odd thing is just how pessimistic the public remains in he face of these on-paper positives. It may be that the redistributive economics of the Bushies have created a perception gap, and those swing middle-class voters are just not getting the share of benefits needed to change their view. I'd guess the country is also in a turn-on-a-dime mode -- if the continuing gas price rise should cause even the hint of a slowdown between here and October, the public could quite quickly decide we're in recession again (a shift that normally takes month to register) and turn against Bush with a vengeance.

My bottom lne: Iraq, the prison and Plame scandals, and the long term economic problems could well be enough to beat Bush anyway. A noticeable short term economic down-swing would leave him in Carter/Bush I territory.

And the more the administraton tells Americans how great the economy is, the greater likelyhood Americans will realize how out of touch Bush really is.

I know this is a little off topic, but I think a post about Reagan's death would be interesting. I found out that Bush is leading Reagan's funeral (talk about politicizing it), instead of someone like H.W. Bush, or Nancy, or Gorbachav.

With respect, Ruy, I think the usefulness of this blog, though substantial, is not primarily what you think it is.

Your careful consideration of the weight of evidence, trend lines in polls, etc will be of considerable value when it comes time to credibly challenge the validity of a stolen election.

I don't think such challenges will succeed, but we must be ready to mount them.

These guys have already shown a willingness to suborn elections and discard democracy. And the stakes this election will be higher than ever.


DIEBOLD IS A VERB.

In re reignman, someone wrote the following under the June 7 post (the first prediction has already been shown to be off the mark. The all-out attempts to portray Bush II not as heir to Bush I but to Reagan have begun long before the Republican convention):

In response to Alleykat's question about how much of a bounce Bush will get from Reagan's death, I don't know. I suspect that to an even greater degree than they would have anyway they will try to wrap Bush in Reagan's flag at their convention. I suspect the swing voters are likely to take a detached view towards the ongoing hagiography.

Will we see the following exchange in one of the fall's Kerry/Bush debates?

Bush: President Ronald Reagan, the greatest American President in American history, understood that we Americans need to stand tall against those who would do us harm as Americans. If we Americans stay the course like Ronald Reagan did, we Americans will prevail.

Kerry: Well, to borrow from the words of another great American, let me tell you something, George. I knew Ronald Reagan. Ronald Reagan was an acquaintance of mine. And let me tell you, George, you're no Ronald Reagan.

If it were at all like the '88 vice presidential debate, then Dubya would have to look like he was about to cry. ;)

So does Ruy ever comment on these things? He STILL hasn't implemented the correction on the previous post.

I know ruy hasn't posted on the new poll numbers yet, but jeez, are we all a bunch of sheep?

one half-assed lackluster speech from bush and the installation of a NEW AND IMPROVED puppet government in iraq and his approval rating climbs 4 pts in the latest zogby poll? that, and support for being in iraq jumps 9 pts?

am I one of the few people who remember the abu ghraib scandal from those long-lost years of last month?

what scares me most about the GOP is they may have stumbled onto the secret formula for running a completely autocratic government: create so much scandal, fear, and distrust that the electorate simply throws up its hands and stops paying attention to details. and then wait for the next news cycle to scrub today's odiousness from voters' minds.

my own mounting anxiety aside, this is a very dangerous turn of the screw. this representative democracy that we're celebrating thru D-Day memorials and upcoming 4th of July events is only as healthy, only as worth fighting for as its citizens are involved in the daily, (frequently) mundane job of self-governance.

democracy requires diligence rather than glamour. and unless voters are committed, thru (an apparently) rapidly dwindling sense of civitas, to actually paying attention, to actually exercising their critical capacities, then we are all living, at best, a farce; at worst, a post-script to self-rule.

You could argue that voters are throwing up their hands because they're so disgusted they don't NEED to know anything more until November because they've already decided nothing can sway them to Bush.

But honestly that's just conjecture.