No, it's not the economy, stupid. If it were the economy, stupid, then House Speaker Dennis Hastert would be yielding his chair to Dick Gephardt, and George Bush would be deluged in rotten cabbages every time he appeared in public.

The economy, stupid? Let's take a look.

The markets? Down, down, down. During Bush's term, the Dow has gone from 10,578.20 on Jan. 22, 2001, to 8,397.03 on Oct. 31, 2002 -- a decline of 20.6 percent. Unemployment? Up, up, up. January 2001 to October 2002, nonfarm payrolls have fallen by 1.49 million, as the jobless rate has jumped in Bush's term from 4.2 percent to 5.7.

Basic economic indicators? Teetering between indifferent and terrifying. Gross domestic product, which averaged a 3.1 percent annual growth rate in the first seven quarters under Clinton, compared with a 1.4 percent average in the same period under Bush.

In the second quarter alone, pension wealth fell by over $469 billion, or 5.3 percent. Housing prices cushioned the blow a little but still left a net decline in wealth of 3.4 percent in one quarter, with its successor shaping up to be just as bad. It looks as though the boom in house prices has topped out. Oil prices are up 40 percent since the start of the year. The telecommunication industry is on its ass, and it will take a very long time to crawl back from overcapacity in the 90 percent range. The airline industry is on life support.

The official rate of profit on capital stock in the non-financial corporate sector as a whole is now is at its lowest level of the post-war period (except for 1980 and 1982).

A recession? Most assuredly. Prospects of long-term economic doldrums? Near certain.

OK. So not only do we have an economy slowly flapping its way to the bottom of the fishtank, we have two men in the White House who, scarcely two months ago, were hiding out in some subterranean war room in the Appalachians, hoping to dodge subpoenas on account of their shady business conduct, even as all their buddies at Enron were striking to make deals with the Justice Department.

It's true. Bush's Harken antics make the Clintons' involvement in Whitewater look like the pitiful little failed real estate deal that it was. Here we have a rich mine of corruption and insider dealing featuring such highlights as the Harvard endowment bailing out Junior at the behest of a Texas oilman. We have officials in the administration of Bush Sr., tearing up SEC rules to save the ass of the president's son. We have... well, you know the story.

And Cheney? As bad, if not worse, in terms of self-enrichment at the expense of the public investors in Halliburton.

This was the economic and scandal-stained backdrop to the midterm campaign.

So, what happened? The public said, "Sure, the economy doesn't look good, but we're not stupid. The economy's sagging, but you can't blame the whole of the '90s on George Bush. Gives us till 2004, and we'll tell you what we think then."

The problem is, the Democrats have no credibility because they haven't earned any. No one believes they have an economic strategy, and as we hunker down amidst the rubble of the bubble, we can ask, what were the Democrats doing as that same '90s bubble swelled? Led by Senator Joe Lieberman they destroyed the regulatory apparatus put in place in the '30s, after the '20s bubble, and burst into ecstatic applause every time the federal watchdog of the markets, Alan Greenspan, ambled along to the Hill to tell everyone what a fine job he'd been doing.

On top of all that, we've had the war whoop against Saddam Hussein. It has not been popular. A majority of Americans appear to believe that it's not a particularly good idea to trash Iraq, even though it would be fun to see Saddam Hussein swinging from a lamppost. Aside from Tony Blair, the world is against it. Closer to home, the Joint Chiefs are against it.

All the same, the whooping worked. It changed the subject from the economy and Harken and Halliburton. It got the Democrats rearing and plunging till Gephardt panicked and rushed to the White House to enlist in the great Crusade. My bet is now that the war fever will subside, not least because George Bush can count yet another triumph after his brave assists to President-elect Lula in Brazil and Gerhard Schroeder in Germany. His warmongering has handed the Islamic Party a great victory in Turkey.

The Democrats are a party of ghosts and revenants, not the most convincing battalion to put against the party of property and oil, of fundamentalist Christians now in coalition with warmongering Jewish neocons, which is, of course, the big political story of the season.

© 2002 Creators Syndicate

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