Economic boom for who?
November 7, 2003 | Page 1
HAPPY DAYS are here again. At least as far as George W. Bush is concerned.
When the government released statistics last week showing a rapid increase in the growth of the U.S. economy during the summer months, the Bush administration claimed vindication for its policy of tax cuts and more tax cuts. "We left more money in the hands of the American people," Bush bragged at a photo op at an Ohio factory, "and the American people are moving this economy forward."
Bush did put more money in the hands of one group of Americans--the rich. Good times are back for the well to do, and the companies whose names are associated with high fashion and luxury--Gucci, Tiffany, Nieman Marcus--are raking it in.
But lower down the ladder of success, the outlook isn't so rosy. For one thing, the U.S. economy managed to grow at a 7.2 percent annual rate from July to September--the biggest quarterly jump since 1984--and still show an overall decline in employment.
Nearly 3 million jobs have disappeared since early 1991. As an immediate result, 1.7 million people were driven below the poverty line last year--and 2.4 million joined the ranks of the uninsured. The unemployment rate remains above 6 percent--and would be higher still if the statistics counted millions of "discouraged workers" who have given up on finding a job, and millions who work part time because they can't find anything full time.
Even where the economy showed its strongest gains, the weaknesses are plain. Overall consumer spending rose at a fast clip--but mainly because income-tax rebates issued over the summer and record-low interest rates for home mortgage loans. This was a one-time shot in the arm for the economy--and in fact, new statistics already show consumer spending on the decline as of September.
Business investment rose sharply in the third quarter, too, but the money was spent almost entirely on equipment and software. Spending on business structures--that is, new factories, offices and facilities--actually fell over the period, another sign of Corporate America's reluctance to make the kind of investments that would lead to sustained expansion and new jobs.
You couldn't find a mainstream newspaper or TV news program last week that wasn't ready to dance in the streets over the government's announcement. But much less was said about why U.S. workers see so little reason to celebrate.
For a working family, last summer's tax rebate may have helped pay for a new TV or cover old debts. But there was also the burden of higher health care costs, as employers increase co-payments and reduce benefits--when they're not slashing coverage altogether.
There were the huge increases in the cost of higher education, especially at state colleges and universities. And there were the hikes in regressive local and state taxes that hit workers and the poor harder than the rich--little-talked-about replacements for federal income tax reductions that went mainly to the wealthy. This economic recovery was made for Bush's buddies in Corporate America and on Wall Street.
Meanwhile, the majority of working people continues to see their living standards chipped away. That's the reality of the Bush administration's other war--the war on workers and the poor at home.