Inside the numbers: the economy

Posted: Apr 15, 2003 12:00 AM

Forget the Iraqi war. For George W. Bush to be re-elected next year, the U.S. economy must improve. Unfortunately for the president, he may have to risk a brazen, unconventional strategy to make it happen.

An examination of our recent polling numbers makes clear that Bush didn't enjoy the expected "war bounce" in his approval ratings that his father enjoyed right after Operation Desert Storm in 1991. George Bush Sr. saw approval ratings ranging from about 75 percent all the way to an incredible 90 percent once Iraqi armies were defeated in Gulf War I. But his son -- though getting a boost from the war of 2003 -- hasn't gotten out of the 60th percentile. The reason for the discrepancy is likely the economy.

Remember, President Bush's approval numbers were starting to sag in the months prior to 9-11. Critics were assailing the White House for its domestic non-agenda. But Bush's forceful, historic leadership in reacting to the Attack On America was nothing shy of astonishing. Most Americans like having a commander in chief that says what he means and means what he says.

Alas, the body politic has a short attention span and a weak memory. Today's political hero can be tomorrow's castaway. With only 50 percent of our poll respondents saying they approve of Bush's handling of the economy, it's hardly a stretch to say the Bush domestic agenda isn't resonating with most of the country. That includes some Republicans and many independents.

In truth, President Bush has had little to do with the economic morass that's bogged us down for nearly four years. My own target for blame continues to be Federal Reserve Chairman Alan Greenspan. He killed off the robust economy of emerging technologies by calling for higher interest rates. That done, he then banged the drum for rates so low that it hampered just about every other industry's chance for sustained growth. All of a sudden, stuffing cash under the mattress seemed nearly as a good a strategy as new investments, including those with banks.

I have been a strong proponent of President Bush's economic stimulus package, including its tax cuts. But recent polls by InsiderAdvantage and others indicate a lukewarm reception for the Bush tax proposals among at least a large plurality of Americans. While some of us "pro growth" conservatives believe the Senate should join the House in giving in to the president, many senators agree with our poll respondents in believing most Americans want the national debt paid down before they receive any additional tax relief. Go figure.

Adding to the president's headaches are some of the Wall Street reforms that followed Enron and similar corporate scandals that have lately plagued American business. For example, quarterly reports on corporations might make things appear worse than normal because of new, rigorous accounting methods. Who's to say now what is and isn't a full, accurate disclosure of a company's finances? Should investors trust these new procedures?

Pro-growth legislation and stricter corporate profit reports may not be enough to court the dollars of a sometimes overly squeamish investment community, and an unsure public. The Bush team may have to get innovative to rescue the economy and themselves. Here's a bold move they might consider: re-regulation of certain industries.

Once the darling economic concept of the free enterprise movers and shakers, deregulation of large public utilities, communications companies and airlines have all resulted in disaster. Neither consumers nor investors have fared well. Overall, services have declined and prices have risen, for everything from natural gas to airline tickets.

Now Congress is trying to outspend itself in an effort to save the airlines -- again -- even as some of the air carriers' top managers have set aside protected funds of cash for themselves in case their companies go belly up.

Radical as it may seem now, the Bush administration might do well to avoid unending class warfare scraps over tax cuts, as well as more bailouts for companies that can't succeed on their own. Instead, why not start to clean up the mess initiated by the Jimmy Carter administration's de-regulation of the airline industry?

So what if it seems un-Republican on the surface? What could be more pro-business than taking action to save America's telecommunications, energy and transportation industries? More than that, what could be more Republican than saving a GOP White House from a potential slide into domestic decline? It could happen.