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
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
Here’s a quick reality check of some of the national media’s most
recent pronouncements on the economy and the presidential campaign:
Exactly When Did the
Current Expansion Begin?
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.
Have Tax Increases
Boosted the Economy?
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
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
Which Candidate Is
Helped By the Strong Economy?
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.