The new gross domestic product figures are out, and here's the
political bottom line: President Bush's prospects for reelection
appear to be rising.
Next November's vote is still a long way off, of course. Even if
economic growth continues, Bush could still be the first chief
executive since Herbert Hoover to see a net job loss during his time
But there's no way that the best quarterly GDP numbers since
Ronald Reagan's presidency aren't good news for the White House. It
increasingly appears that as he tries for a second term, Bush may be
less vulnerable to attacks on his economic stewardship than he is to
criticism about foreign policy. That position is the reverse of what
seemed likely only a few months ago.
"The short-term politics of this are favorable to the president
and it puts his Democratic critics on the defensive," says Merle
Black, a political scientist at Emory University in Atlanta.
The GDP growth of 7.2 percent annual rate for the third quarter
was the highest such figure since the first quarter of 1984. It was
almost double the 3.3 percent pace registered in the second quarter,
and surpassed most analyst's projections.
Among the possible reasons for the performance cited by
economists were continued low interest rates and consumer spending
fueled by tax cuts.
Administration officials were quick to take credit for the
improving economy. The value of US stock markets has gone up by $2
trillion since the beginning of the year, they pointed out, with
personal income rising at a 3.8 percent annual rate since January.
"Today's report on real GDP in the third quarter shows that the
president's economic policies are having a positive impact on the
economy," said Treasury secretary John W. Snow.
But others were quick to note that one stunning quarter does not
a booming economy make. Nor does it ensure that the economic climate
will continue to improve as next year's vote draws nearer.
In terms of forming voter attitudes the most important GDP
numbers may be those from the second quarter of next year, which
will be issued at the height of the presidential race.
"We could have a scenario where the economy comes back and then
drops off again," says Mr. Black of Emory University.
Still, this good quarter will undoubtedly cause problems for
Democratic presidential candidates. Many of them have shaped
messages and proposed policies on the assumption that Bush might be
vulnerable on economic policy - and on the effects of his tax cuts
Howard Dean, for example, has hit Bush's stewardship as "Enron
economics," and called for a rollback of all the president's tax
cuts. Dick Gephardt has similarly called for a complete tax-cut
turnabout, saying they have created a fiscal mess that will lead to
huge federal deficits for the foreseeable future. …