Sep 1 2004

It’s the Economy, Stupidly

Jobs reporting protects Bush's job

After many months of dismal job creation numbers, three months starting in April produced statistics that George W. Bush could cite positively. With John Kerry having devoted much effort to pointing out the poor economic performance under the Bush administration, the new numbers produced a strong media consensus: The Kerry team would have to change strategy fast.

A headline in the Los Angeles Times (6/15/04) suggested that Kerry was ignoring reality by sticking to his focus: “Kerry Sidesteps Job Growth as He Hits Bush on Economy.” “Kerry’s description of the economic climate ran counter to a substantial pickup in new jobs,” the article asserted.

“As the Recovery Gains Momentum, Democrats Are Forced to Refocus,” declared a front-page Wall Street Journal headline (6/23/04). The economy was “now growing at a rapid clip,” the Journal reported, and therefore the “Democrats are edging away from their charges that President Bush is presiding over a ‘jobless recovery,’ which has been a staple of their campaign rhetoric. That argument is giving way to the line of attack that working America is suffering a ‘middle-class squeeze.'”

This was practically a no-win situation for Kerry: “Certainly the new version of the economic debate is harder for Democrats to win,” the Journal asserted. “Voters are less likely to turn out an incumbent if they see the economy broadly improving, even if they still have some specific pocketbook complaints.” The paper did not elaborate on this distinction between a “broadly improving economy” and “some specific pocketbook complaints.” And to make matters more confusing, the Journal noted that “polls suggest the economy this year remains fertile territory for Mr. Kerry, as many Americans still express skepticism about the recovery,” citing an ABC News/Washington Post poll that showed voters dissatisfied with Bush’s economic performance.

Much of the reporting and commentary suggested that Bush’s economy was on a roll even if the public didn’t seem to think so. The Washington Post (6/10/04) noted that Bush’s approval was not rising, even though “wages have begun to rise.” That was only true, as economist Dean Baker pointed out, if you didn’t include inflation in your calculations of wage growth (Economic Reporting Review , 6/14/04).

But the Post continued this argument (6/19/04), condemning Kerry for “political gloom-mongering” because he had “been telling voters this week that although job creation may have recovered, wages are the real problem.” Contradicting Kerry’s message that wages were going down while prices were heading up, the Post wrote: “Actually, hourly wages for non-supervisory workers have risen this year by 2.2 percent as of May, so they kept pace with consumer price inflation.”

Eventually, the Post ‘s correction box (6/22/04) did acknowledge its error: “On June 19 we wrote that wage increases had kept pace with inflation in the year to May, and criticized Sen. John F. Kerry for suggesting that wages had fallen behind. We were wrong and Mr. Kerry was right: Hourly wages for non-supervisory workers rose 2.2 percent, while the consumer price index rose 3.1 percent.”

But other papers kept on criticizing Kerry for not accepting that happy days were here again: In an editorial headlined “Kerry’s Gloomy Notes About Economy Ring Hollow,” USA Today opined (6/23/04): “Most measures of economic health, while below levels of the booming 1990s, have been heading upward. The economy has added an impressive 1.2 million jobs since January, inflation rose a modest 2 percent over the past year, and wages are picking up.” Again, wages were “picking up” only if you don’t take into account the “modest” inflation.

Opposing visions?

As the job numbers seemingly complicated the campaign storyline, reporters latched on to the idea that the campaigns were simply highlighting different and equally important features of the same economy. “The two candidates are presenting Americans with two diametrically opposed visions of the economy,” said ABC reporter Dan Harris (7/2/04).

“Call it a tale of two economies,” reported CNN ‘s Judy Woodruff (6/15/04). “George W. Bush and John Kerry are painting starkly different pictures of the nation’s fiscal health. The president’s landscape: booming job growth, a reborn manufacturing sector, renewed consumer confidence and a surging real estate market. All fruits of his economic programs with his massive tax cut as the centerpiece.”

And the other side, according to Woodruff? “Not so, says the Democratic insurgent. Kerry says that while employment numbers may be going up, wages are going down. The upticks he talks about deal with rising food, health and childcare costs, a steady increase in the number of personal bankruptcies, and, of course, the climb in gas prices and the effect that has on inflation.”

Woodruff did little to reconcile these visions—an approach that was unfortunately common. “Competing views, dueling data,” was how NBC reporter Norah O’Donnell put it (6/14/04). O’Donnell cited job growth in Bush’s favor, while noting that “the Kerry campaign relies on a different equation to measure what it calls a middle-class squeeze.” Instead of trying to resolve those differences, O’Donnell shifted into an easier–and markedly less helpful–mode: “Beyond the numbers, the debate is a contest of tone. The Bush campaign now repeatedly casts Kerry as a pessimist whenever he criticizes the economy, a tag Kerry rejects. And so now both men are quick to define themselves by seizing yet another label.”

This became a regular theme in the coverage, leaving Kerry little wiggle room to explain that he’s not being pessimistic. As ABC ‘s Harris put it, “The challenge for Kerry is to not seem pessimistic, especially when Americans have just finished celebrating the life of the famous optimist, Ronald Reagan.” Harris’ advice for Bush was much different- be patient and wait for the public to appreciate all the good news: “The challenge for Mr. Bush is to remember that there is often a significant lag between improving economic numbers and improving voter sentiment about the economy.”

On Fox News Channel , this battle between optimism and pessimism was a constant theme. Anchor Brit Hume framed the issue this way (6/15/04): “So who is right: John Kerry with the bad news or Alan Greenspan with the good news?” Fox reporter Carl Cameron (6/17/04) declared, “Fully aware that voters prefer optimism, Mr. Bush derides Kerry’s concerns as a defeatist agenda of gloom and doom.” Fox anchor Brian Wilson (6/4/04) offered a decidedly upbeat assessment of Bush’s upbeat advertising: “In fact, the Bush ads that are running, [that] we heard about earlier in this broadcast, are going to focus on the fact that, you know, pessimism never grew any jobs. And that’s a pretty effective line, I would think.”

Lowering the bar

Though it’s not a stretch to say that improving monthly job numbers could be good for Bush’s campaign, those numbers are rarely placed in any meaningful context. Perhaps the most overlooked aspect of the story is the fact that these job numbers pale in comparison to what the White House predicted when it was advertising its last tax cut package. Those cuts, we were told, would create millions of jobs.

As Investor’s Business Daily reported late last year (12/8/03): “The president’s Council of Economic Advisers said in February the White House’s ‘Jobs and Growth Plan’ would create 5.5 million jobs by the end of 2004. That would be 306,000 new jobs each month, starting in July 2003, when the plan went into effect.” Monthly job growth has met or exceeded this target twice since that starting point–in March and April 2004. In nine out of 14 months, the economy has fallen at least 200,000 jobs short of the mark.

But many in the media seem to have forgotten that job creation was a key rationale for Bush’s tax cuts (whose initial four-year cost was $749 billion, according to estimates by Citizens for Tax Justice). Absent that context, reporters are able to make Bush’s economic performance a potential source of strength. Fox pundit Mort Kondracke (6/4/04) assessed the situation this way: “If the job growth continues at the pace that it is going right now, Bush will end up net even for his term, which is pretty remarkable.”

Pretty remarkable? Remarkably low, actually. Every president since Hoover has had positive growth in jobs, and eight of Bush’s 11 immediate predecessors have seen at least 2 percent annual job growth. If Bush came out “net even,” he would be almost a full percentage point behind Gerald Ford, the post-1929 president with the worst job creation record. But by late summer 2004, with Bush still 900,000 jobs in the red, it seemed likely that Kondracke’s prediction was overly optimistic.

Media hiding good news?

After noticing that a few months of good job growth failed to turn into a political advantage for Bush, some in the media thought they knew who was to blame: the media.

Right-wing pundit Charles Krauthammer explained on Fox News (6/4/04): “Well, I mean it takes time for people to feel within their own lives the change. And secondly, you have the endless media propaganda about how bad the economy is.”

But it wasn’t just Bush partisans in the media making this case. “Here’s a little secret: the nation’s economy is actually doing very well,” explained CNN ‘s Bill Schneider (6/14/04). “President Bush has been trying to spread the word.”

Schneider was vexed that the public didn’t seem willing to share in the good news: “Don’t people believe the good economic statistics? No, they don’t. There’s always a time lag between statistics and perceptions.” If that’s the case, perhaps Schneider, Krauthammer and other media cheerleaders will eventually realize that Bush’s job record is hardly a record to run on.