Forty-seven percent of Americans, according to a recent poll, believe the economy is doing “badly.” Or, as a woman I encountered at a party recently put it, “Bush put the economy in the toilet.” Really?
The feds just revised upward — again — the economic performance of the last quarter. From January through March 2006, the economy grew at a rate of 5.6 % — higher than any in the last two-and-a-half years. Despite recent inflation scares, inflation remains low, at a 2.1 % core rate. Unemployment, at 4.6 %, represents a lower rate than the average during the ’60s, ’70s, ’80s and the ’90s. Since August 2003, the economy has created more than 5.3 million jobs.
States report record tax receipts. Sixteen states report revenue growth of more than 10 %, with the strongest — Georgia — showing a 20.5 % increase. Increased tax revenues occur during economic prosperity, with increasing incomes and therefore larger personal and corporate tax payments, as well as increased revenues from sales tax.
The unpopular war in Iraq explains some of this economic pessimism. But many attribute the negativity to high gas prices. And, according to a recent poll, 82 % of Democrats think President George Bush is either entirely or partly responsible for the high price of gasoline. Among Republicans, “only” 29 % think so.
How responsible is Bush for gas prices?
Three months ago, USA Today wrote a “primer” on gas prices. It named the factors causing the uptick in prices: reformulation and additional chemicals required to meet summer clean-air regulations; production worries with ethanol (a substitute for the additive MTBE, now linked to health problems and banned in many states); lowered refining capacity more than half a year after Katrina and Rita damaged oil platforms and major refineries; fears of future hurricanes hurting refining capacity again; and state, federal and local taxes.
Add to that rising crude oil prices — which accounts for 59 % of the price at the pump, versus 47 % in 2004 — due to increased world demand, especially from China and America; a supply of crude tightly matched to demand; and fear that geopolitical risk — particularly with high-producers Iran, Nigeria and Venezuela — could reduce supply and send prices soaring (fears of a shortfall in supply add about $20 to the price of a barrel).
And Congress recently ordered the Federal Trade Commission to once again look into allegations of price-gouging. The commission turned up no evidence of price manipulation or collusion by “Big Oil.”
The same people who blame Bush for higher gas prices resist allowing the president to do the things he can. This includes a suspension or reduction of taxes, permission to drill in Arctic National Wildlife Refuge and the outer continental shelf, and allowance for the construction of nuclear power plants — a source, for example, of 75 % of France’s energy requirements.
Also, the anti-Bush mainstream media certainly help stir up economic pessimism. Economic news under a Republican stewardship gets reported one way, and another way when a Democrat sits in the White House. Media Research Center, a conservative media watchdog, writes, “During the Clinton years, network journalists argued (correctly) that strong economic growth, a rising stock market, low unemployment and low inflation were the benchmark indicators of a good economy. Today, economic growth is a phenomenal 4.8 %, the stock market has been climbing for three straight years, and inflation and unemployment are both low.
“But instead of trumpeting the amazing ‘Bush economy,’ TV news has downplayed this recent good news, while hyping the bad news of rising fuel costs. Indeed, a new Media Research Center study suggests the broadcast networks are not just noting the discontent about prices, but actively stoking public outrage.”
Newspaper headlines help to define and shape views on our economy. Two professors, John Lott, economist and resident scholar at the American Enterprise Institute, and Kevin A. Hassett, the institute’s director of economic policy studies, looked at newspaper articles on the economy. They wrote, “We found that newspaper headlines reporting economic news on unemployment, gross domestic product (GDP), retail sales and durable goods tended to be much more frequently negative when a Republican was in the White House. And this was true even after accounting for the economic numbers on which the stories were based and how those numbers were changing over time.”
So bad economic news becomes less bad economic news with a Democrat sitting in the White House. With a Republican in the White House, however, good economic news becomes less good, and bad becomes even worse.
Lynne Cheney, the vice president’s wife, put it as well as anybody when she said, for the left, the president “can do no right.”