WASHINGTON -- Throughout her campaign in the Pennsylvania primary Hillary Clinton kept repeating that America didn't manufacture anything and that if she becomes president, we'd start making things again.
There's only one thing wrong with this bleak, despondent assessment of the American economy (which many voters share): It isn't true. Sadly, no campaign reporter called her on it. This was a bigger whopper than her tale about dodging bullets in Bosnia.
In Hillary's world there is no Boeing Corporation, which is beating the pants off Airbus in aircraft manufacturing. (It announced a 38 percent jump in first-quarter profits last week.) There is no Apple Computer, selling so many IPods and IPhones that it can barely meet demand. Americans make no cars, no washing machines, no fiber optics, no countertops or kitchen cabinets, no plumbing supplies. There is no pharmaceutical industry, no electronics businesses, and no farm and construction machinery companies, just to mention a few of the industries that make things. Drug giant Eli Lilly reported stronger quarterly sales last week that doubled its earnings. Well, you get the idea. These and millions of other American companies sold more than $1.6 trillion in exports last year, according to the U.S. Department of Commerce, and that does not count sales here at home. We make and sell a lot of stuff, Hillary.
But the Democrats have a huge stake in portraying the U.S. economy as bleakly as possible, even if that means making things up -- though you'd think that a near-negative growth rate, higher unemployment, and a steeply declining housing industry would be enough evidence of the problems we face. We're talking, however, about the possibility of recapturing the presidency, so we are going to be hearing a lot of talk in the coming months that the U.S. economy is not just in a recession, it's in a depression. Political rhetoric is going to be ramped up to exaggerate and exploit preconceptions and misconceptions.
But what if the economy begins turning around in mid-campaign? That's what happened in 1984 when President Reagan was running his optimistic "Morning in America" campaign ads as the long two-year recession was ending. Reagan's Democratic opponent Walter Mondale disagreed, and his America-in-depression rhetoric never changed. Mondale carried one state, his own.
A mid-year turn-around is still quite likely. Federal Reserve Chairman Ben Bernanke has predicted it, as have many others. In a new report on the United States and global economies, titled "Liquidity-Driven Rebound," Wall Street economist David Malpass does not believe "the credit crisis will cause a long or deep recession."