Happy Anniversary, everyone.
The little-rebate- that-could came into our lives a year ago, a special introductory
offer of prosperity from the CEO who promised to run the country just like a business.
The $300-per-person checks were mailed last summer, when we fretted less about
terrorism than about a transition from boom to what's turning to bust. The checks
were a down payment on the first, and apparently only, economic policy in the
briefing binder of the first MBA president: A $1.4-trillion tax cut, most of which
is to be doled out in the future to those of the class who need the money now
to pay their lawyers.
"I believe when you cut taxes it spurs economic growth," President George
W. Bush said during an appearance in Alabama yesterday that his aides hoped would
pump up sagging economic confidence.
This was a do-over of the shot the president missed on Wall Street last week.
Yesterday the made-to-order White House backdrop changed from blue to red. Its
made-for-TV slogan switched from "Corporate Responsibility" to "Strengthening
Our Economy." That's where viewers' eyes were supposed to focus, anyway. Who could
blame them for staring instead at the plunging Dow?
"The economy is coming back, that's the fact," the president declared.
Anniversaries are a time for taking stock. So looking back on the year since
Bush's only economic policy was put in place, here are some snapshots from the
country's economic album:
A year ago, the federal budget was running toward a year-end surplus of $127
billion - so much money that Washington contemplated spending some on changing
Social Security from a system of guaranteed benefits to a collection of private
accounts to be invested in the stock market. This was so ordinary workers could
become rich retirees.
Now, the White House says the current budget is heading for a deficit of $165
billion, a dazzling turnaround the president's team blames on everything but the
revenue drain from the tax cut. The real villains are the dropping stock market
and congressional spenders, the White House said. The non-partisan Congressional
Budget Office differs, citing the tax cut for a drop in income-tax revenues.
Maybe you took your $300 check and went straight to Wal-Mart. But maybe you
saved and invested in America - trying, perhaps, to become a rich retiree. The
Standard and Poor's 500 closed on July 16, 2001, at 1,202. It's down about 25
percent since then. So a $300 check socked away in an index fund now would be
worth about $225.
If your check is long since spent, perhaps you take comfort, as the president
does, in the way consumers like you manage to maintain robust buying habits despite
slow wage growth and the corporate crime spree that robs them of their savings.
It's good to spend your money on a "good and service," the president told
us. This is supposed to translate into jobs for Americans who make goods or at
least find work stocking shelves with imports.
In fact, unemployment rose slightly last month to 5.9 percent - up from 4.6
percent a year ago. The number of people out of work for month after month grows.
Last June, 728,000 laid-off workers had been without jobs for 27 weeks or longer,
according to the Bureau of Labor Statistics. That number now has more than doubled,
to 1.7 million.
The median length of time an unemployed worker is looking for a job has stretched
from about six weeks a year ago to 12 now. Except for one month during the long
and deep recession of the early 1980s, the search for new work has not been this
long since 1948, said Jared Bernstein of the Economic Policy Institute.
Of course, the president said interest rates and inflation are low. Thank
you, Alan Greenspan. And economic growth in the first quarter zoomed up more than
6 percent. That will tumble as quick as a dot-com stock later this year, most
But do not fear, the president said. Help is on the way.
Now that his tax cuts have failed to create jobs, cheer investors, boost wages,
prop up profits or keep the government's fiscal house in order, he has a plan
for the future. More tax cuts.
Copyright © 2002, Newsday, Inc