U.S. Jobs-Politics:
The March report of only 20,000 new jobs created was deeply disappointing to the White House and Republican politicians generally, but the political outlook is not as unfavorable to President Bush as it might seem on the surface.
1) At one level, expectations have been lowered. Future monthly figures of 100,000 are highly likely, and that figure now much better when compared with just 20,000. [Editor's note: The Labor Department today reported that 308,000 jobs were added in March.]
2) Beyond that, the economy's strength is underestimated, even by Republican politicians. For example, the Federal Reserve's new data shows U.S. household net worth at a record $44.4 trillion at the end of 2003, with the value of equities and houses on the rise and little increase in total debt. The "misery index" popular a generation ago - unemployment added to the inflation rate - remains relatively low.
3) Another way of measuring the economy is that over 7.5 million new jobs are created every quarter, but a little less than that number are lost. In other words, the U.S. economy is dynamic with a lot of jobs created and a lot dissolved.
4) The problem for Bush and the Republicans may be poor presentation of the economic outlook. Complaints that there is no effective economic spokesman in the Bush Administration come frequently from Congress.
Offshoring:
President Bush, under a wave of criticism for job loss overseas due to free trade - "outsourcing" or "offshoring" as it is called these days - has stood his ground.
1) This month, Bush and his deputies fired back and called the administration's critics "economic isolationists."
2) In simultaneous comments Tuesday, Bush and United States Trade Representative Robert Zoellick both used the "economic isolationists" phrase to describe those who would use subsidies or tariffs to prevent U.S. companies from turning to cheap overseas labor as a way to save costs.
3) In recent months, offshoring has become a poignant political issue, more because of the press than because of any of Bush's political rivals. The talk of a "jobless recovery," (Gross Domestic Product and the stock market rising at a healthy rate while job creation climbs slowly and uncertainly upward) has opened the door for Democrats to malign corporations who are now faring better without any benefits trickling down to many unemployed workers.
4) Some Democrats and many in the media have turned to offshoring as the explanation - businesses are getting rich by exploiting cheap overseas labor to increase profit margins while the regular American family suffers. This idea worked well into the Sen. John Edwards' (N.C.) presidential bid.
5) Edwards, who opposed all free-trade pacts and spoke of "two Americas," one for the privileged and one for the average man, is still a top consideration for Kerry's running mate. While Kerry is generally a free-trader, it is possible the Democratic ticket will, rhetorically, at least, take an aggressive stance towards those companies who send jobs overseas.
6) The measures Kerry and Edwards would push would likely fall short of actual trade barriers. The Senate, for example, this month passed a bill blocking federal government contracts from going to companies that would carry out the work with foreign labor. Kerry, on the campaign trail, has said he would remove any special tax treatment for companies engaging in offshoring labor.
7) Protectionist talk is generally fairly resonant with voters, especially in a time of relatively high unemployment. However, no protectionist candidate has been elected President since before the Great Depression.
8) The Bush Administration response has so far been clumsy. Top economic advisor Gregory Mankiw spoke callously about the overseas job loss being an economic boon - good economic sense, perhaps, but politically stupid. The coordinated response beginning two weeks back, pointing out how protectionism drives up prices, is the first sign of an intelligent White House rebuttal.
Syria:
Congress is heightening its calls for Syria to pull troops out of Lebanon, and President Bush plans soon to implement sanctions on that Middle Eastern nation.
1) Two lawmakers report that the President is poised to take action against Syria under the "Syria Accountability Act." That law, approved overwhelmingly by the House and Senate last December, calls on the President to impose sanctions against the Arab nation for its dealings with the Hussein regime in Iraq and for Syria's occupation of Lebanon.
