The twin events of September 11 and the bursting of the 1990s' economic bubble -- as their effects unfold -- may be deeply reshaping American public opinion and public policy in a manner now but dimly perceived. The political effects of Sept. 11 were fairly obvious in the last election cycle, where they weighed more heavily on voting decisions than did the economy. President Bush's leadership on the terrorism front (which includes the wars in Afghanistan and Iraq as part of the broader war on terrorism) continues to provide him buoyancy. The rippling diplomatic and military changes that September 11 (and Mr. Bush's actions thereafter) has put in motion are reshaping the international community and America's sense and definition of national security. So far, the loyal opposition has not conceived a politically and substantively plausible alternative policy with which to confront the president, so he is likely to continue to politically benefit from this one-sided national issue. But the political and policy effects -- if any -- of the burst bubble has yet to become the topic of much public discussion.
Politicians and commentators have not yet thought to analyze the political effect of the burst bubble, I suspect, because economists have not yet discerned the economic effect. This is a tricky business, because there may be no special effect. The economy may just be sluggishly recovering from a cyclical downturn. If so, the conventional policy prescription of fiscal stimulus -- combined with the natural recuperative rhythm of the economy -- will at some point in the next year yield sustained growth, lower unemployment and higher profits. If that is what we are experiencing, then the political impact of the economy will be routine and predictable.
Following that assumption, the only major difference between this and past recoveries would be the higher rate of public stock ownership. During the Reagan years, about 15 percent of the public owned stock -- thus few voters cared deeply about the level of the Dow. Now about 60 percent (and over 70 percent of likely voters) own stock, making the lost wealth effect of a depressed equity market a more cogent political fact. But hints of evidence -- admittedly ambiguous and inconclusive -- are emerging that suggest that this is not a normal recovery, but rather that we are only partway through the singular economic effects of a burst bubble. If that turns out to be the case, then conventional policy and political calculations will have to be discarded.
Blankley, who had been suffering from stomach cancer, died Saturday night at Sibley Memorial Hospital in Washington, his wife, Lynda Davis, said Sunday.
In his long career as a political operative and pundit, his most visible role was as a spokesman for and adviser to Gingrich from 1990 to 1997. Gingrich became House Speaker when Republicans took control of the U.S. House of Representatives following the 1994 midterm elections.