As with all presidential campaigns, the state of the economy will be a key issue in November. Vice President Al Gore and Texas Governor George W. Bush disagree on most of the fundamental questions: when did the current expansion begin; what government policies, if any, have provided a positive contribution; and which candidate’s proposals provide the best opportunity for continued economic growth.

At least in theory, the news media are supposed to help voters sort through the various claims and counter-claims. But most reporters seem to be spending little time on economic policy debates, instead debating the question of which candidate is most helped or hurt by the economy (the perennial "horse race" bias). Additionally, when they do stray into policy areas, many political correspondents seem to have an uncertain grasp of basic economic facts.

Here’s a quick reality check of some of the national media’s most recent pronouncements on the economy and the presidential campaign:

According to Time’s Eric Pooley, Bush has been playing games on this score. "To deny Democrats credit for the prosperity and accuse them of driving the country ‘downhill,’ he [Bush] backdates the boom and pretends it began before Clinton took office," Pooley wrote in the magazine’s August 14 issue.

Six months earlier, however, Time reported that the economy was about to enter record territory: "When this expansion passes the February milepost, it will become the longest in American history — 107 months," wrote business correspondent Berhard Baumohl. At that time, Clinton had been in office just 84 months.

Anyone can do the math: "Though unrecognized at the time, the current recovery began in March 1991, long before Bill Clinton defeated President George Bush on the assertion that he did not know how to manage the economy," concluded the New York Times in a February 7 editorial. (Actually, it was recognized at the time — President Bush tried to draw attention to that fact, but few in the media noticed at the time.)

The Times, not normally considered a conservative newspaper, also pointed out in February that "except for a mild recession at the beginning of the 1990s, the American economy has enjoyed uninterrupted growth for almost 18 years." President Ronald Reagan took office 19 years ago, and his tax cuts took final effect 17 years ago. Again, anyone can do the math.

On the August 6 This Week program, ABC’s Sam Donaldson suggested to Representative J.C. Watts that tax increases promoted by Presidents Bush and Clinton contributed to the long-running boom. "We've had a strong economy. There’s no denying that," Donaldson told Watts. "It may have begun in 1990 when George Herbert Walker Bush broke his no tax pledge and started — and in 1993 though, the Democrats put forward that reconciliation bill [further raising taxes] without a single Republican vote to cut back on the spending. And now somehow the Republicans have to make this economy an albatross around Al Gore’s neck and, J.C. Watts, that’s a tough sale, isn’t it?"

There are hints of two myths in that question. First, Donaldson seemed to revive the notion that the two tax increases — one in 1990 and another in 1993 — were an essential in curtailing the budget deficits. Then, he implied that the reduction and eventual elimination of budget deficits strengthened the economy ("It may have begun in 1990..."). That’s a point of view that crops up repeatedly on the networks, and it offers subtle encouragement to those who would "save" the surplus in order to further strengthen the economy.

But if that’s really his point, Donaldson has it exactly backwards, according to free market experts: the booming economy led to the balanced budgets, not the other way around. The Cato Institute’s Handbook for Congress noted that "the surging U.S. economy has produced an unprecedented tidal wave of federal tax receipts in recent years. In 1998 federal revenues rose by more than 10 percent....The surge in tax payments, not restraints on government spending, has been the primary explanation for the balanced budget."

On this question, political reporters seem more confident of their answer, and are more in agreement that Gore and the Democrats benefit from the current prosperity. "As the Gore team tries to make the most of the economy, the economy is cooperating," Tom Brokaw told NBC Nightly News viewers on August 4, adding, "Things are so good right now, one analyst is calling this ‘The Goldilocks Economy,’ not too hot, not too cold."

"With the economy good and the national mood sunny, political change can be a hard sell," seconded CBS’s Bill Whitaker on the August 6 Evening News. ABC’s George Stephanopoulos — once a Clinton White House aide, but now a high-profile political analyst at ABC News — told Good Morning America anchor Charles Gibson on August 3 that the Gore campaign was actually "pretty complacent," believing that the election of another Democratic ticket was a cinch given the positive economic environment.

"If you look over the course of history, the person in Gore’s position has never lost," asserted Stephanopoulos.

True enough, but Gore — now trailing in the polls — can hardly coast his way to the White House. For one thing, the Democrats haven’t faced a serious challenge from their left since 1948, but summertime polls show Green Party candidate Ralph Nader maintaining his hold on about five percent of the national vote, perhaps enough to swing the election to Bush. Further confounding matters, for the first time more than half of all voters who show up in November will be stockholders, directly or indirectly through mutual funds or pension programs. While this group includes both Democratic and Republican voters, the Information Age enables these investors to cast their ballots with an acute sense of their own best interests.

Daniel Gross, author of Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance, wrote last month in the Washington Post’s Outlook section that while Gore could make legitimate appeals to the "investor vote," he wondered whether the Democrat was getting the message. "Frequently, Vice President Gore has reverted to old-style class warfare when discussing investment-related issues. He knocked George W. Bush’s Social Security proposal as meant for those who ‘think comfortably about their savings over Scotch in the club looking out at the golf links.’ In an era when one in two American households owns stocks, the tired Democratic rhetoric about the haves and have-nots won't have much traction."

One lesson that these investors will have gleaned over the past few years is that while government can re-distribute the nation’s wealth, only the private sector can create it. The presidential candidate who best understands this fact, and whose policies are perceived as most likely to allow the free market to flourish, would seem well positioned to win the investor vote, and the White House.

— Rich Noyes