Image: Bush
President Bush speaks at a fund-raising dinner in Los Angeles in June.
By Tom Curry National affairs writer
msnbc.com
updated 8/1/2003 5:04:05 AM ET 2003-08-01T09:04:05

Feeling better yet? If you’re one of the 9.1 million Americans reported as unemployed in Bureau of Labor Statistics data released Friday, probably not. But once the Democratic presidential candidate is chosen next year, will he have an open-and-shut case that the “Bush economy” merits a pink slip for President Bush? Or will national security trump economic sluggishness as the defining issue?

The issues of Iraq and terrorism mean that next year’s election won’t simply be a reprise of “the economy, stupid” Clinton campaign of 1992.

The BLS said Friday that the number of non-farm payroll jobs declined by 44,000 in July, indicating that even if the economy is growing, jobs are not being created in sufficient numbers. The number of jobs has declined by 486,000 since the beginning of the year.

Muddling the picture is the fact that the Commerce Department said Thursday the economy grew at a rate of 2.4 percent in the second quarter of the year. And claims for unemployment insurance have fallen in recent weeks, signaling a possible turnaround in job creation.

Still, Bush said Friday that he was not satisfied by the drop in the jobless rate: “Even though some of the numbers are good, there’s still too many people looking for work so we keep working on the economy until people can find a job.”

Democratic presidential contenders used the news to renew their criticism of Bush. “Many workers have simply given up finding a job in this bleak Bush economy,” said Connecticut Sen. Joe Lieberman. “No one should mistake job seekers throwing in the towel as welcome economic news.”

HOW GOVERNORS SEE IT

Asked whether the economy or national security will weigh more heavily on voters’ minds next year, Michigan’s Democratic Gov. Jennifer Granholm said earlier this week, “I don’t think it is either/or. I do think that national security is an important subject and we’ve got to make sure that we have got not just a response, but an initiative that seizes that issue for the Democrats.”

But, Granholm quickly added, “I do think the economy is going to be a very big component of this election, as I see it today. Something may happen tomorrow to change that. It may mean that national security rides this out as the No. 1 issue. But today I think it is going to be the economy.”

Her fellow Democratic governor, Arizona’s Janet Napolitano, agreed.

“If things stay as they are right now, even in Arizona where the economy never got as bad as some other areas of the country and is already starting to tick back, I would say the economy will be the top issue,” Napolitano told MSNBC.com.

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Napolitano said the key is neither unemployment nor interest rates. “The key issue is per capita income — people aren’t getting enough money in their pockets. Our per-capita income in Arizona went down even during the greatest decade of economic growth in Arizona,” she said.

Underscoring the long-term nature of the income problem, Napolitano said, “The high-wage manufacturing jobs are going abroad — that’s something we as a country need to confront.”

ARRAY OF PROBLEMS

The economic malaise is a compound of several problems of different kinds:

The hemorrhage of manufacturing jobs that Napolitano cited. The BLS said in its report Friday that manufacturing employment declined by 71,000 last month.

The outsourcing of information technology jobs to lower-wage tech workers in India and other countries.

An influx of hundreds of thousands of foreign executives and managerial workers into the United States under special visa programs that allow multinational firms to re-locate non-U.S. personnel to American soil. A Senate committee held a hearing on this problem this week and legislation is in the works to make it tougher for multinationals to import foreign employees to work in the United States.

The collapse of inflated stock values, which hit Americans’ 401(k) accounts.

The massive over-investment of the late 1990s in the telecom industry.

State and local government tax increases that retard economic growth.

Is there a way for Democratic presidential contenders to frame all this in one simple, compelling sentence?

In 1988, Democratic contender Dick Gephardt touted one of the great slogans in modern American politics when he ran for the nomination with the rallying cry, “It’s your fight, too!”

Gephardt decried the import of low-priced Hyundai cars from Korea, while that country kept its domestic markets closed to American goods. This year, too, he will rely on appeals to blue-collar voters. The 1.4 million-member Teamsters union’s 22 vice presidents on Friday unanimously voted to endorse Gephardt’s candidacy.

ARE YOU BETTER OFF?

Democratic strategist Tom Ochs said the pithy economy slogan for 2004 can be the old reliable used by Ronald Reagan in 1980.

“Are you better off today than you were four years ago?” Ochs said. “That is a fascinating question to be posed to this administration. I think the answer will continue to be ‘no’ and if the answer is ‘no’ then we put it at the feet of the people who have been in charge of the economy.”

One argument the Democratic contenders have repeatedly used this year is that the tax cuts passed by Congress and signed into law by Bush were grossly irresponsible.

But data from the new NBC News/Wall Street Journal poll indicates that fiscal rectitude is not what most Americans are seeking right now.

When asked, “Which do you think should be a greater priority for the president and Congress this year — stimulating the economy or controlling the federal budget deficit?” 60 percent of poll respondents said “stimulating the economy,” while only 35 percent said controlling the deficit.

The fact that so many poll respondents emphasize the need for stimulus indicates that workers still don’t feel bullish about the future.

Sickly economic data can end a presidency. Just ask Jimmy Carter, who ended his last year in the White House with mortgage rates at 16 percent and unemployment near 8 percent.

But charisma can overcome bad numbers: Ronald Reagan was re-elected in 1984 when the unemployment rate was 7.4 percent; yet the less charismatic George H.W. Bush, father of the current president, was ousted when the unemployment rate was almost exactly the same, 7.3 percent.

The current President Bush — scion of a wealthy family, graduate of Ivy League schools and savvy veteran of politics since 1978 — may face an election next year resembling one faced by another president from a blue-blood Ivy League background, Franklin Delano Roosevelt.

SIMILAR TO 1940?

Old-line Democrats might be dismayed at an FDR/Bush comparison.

Yet consider that Roosevelt was re-elected in 1940 at a time of high unemployment — 14.6 percent — but when the nation was pre-occupied with the need for national security as war clouds gathered in Europe.

The unemployment data in 1940 was bad — horrifying by today’s standards. But by 1940 Americans had been living with high unemployment for 10 years. National security was the bigger worry.

Like FDR after Pearl Harbor, Bush now leads a nation that has been attacked on its own soil. Like FDR, he has sent soldiers into battle and used the rhetoric of destiny.

“In a single instant, we realized that this will be a decisive decade in the history of liberty, that we’ve been called to a unique role in human events,” Bush said last year. As Michigan Gov. Granholm said, the economy may be the dominant 2004 issue, but “something may happen tomorrow to change that.”

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