by Dean Hartwell
Recently, Senate Majority Leader Tom Daschle blamed President Bush for his “atrocious record” on the economy. The senator cited statistics that show that since Bush took office, two million jobs have been lost, economic growth has been a low one percent, and $4.5 trillion has been lost in stocks.
Was Senator Daschle’s attack fair?
Because the president has different control over the various aspects of the economy, the answer is yes and no. He has the power to create new jobs in the public sector (federal jobs, like adding more FBI agents, for example), but very little power to create jobs in the private sector, where most employed people work.
Thus, these lost jobs in the private sector are not handled directly by the president. Other actors, the respective executives of companies, made the decisions to lay workers off. A multitude of reasons could account for these decisions. Among them are: management hiring of too many workers, unexpected revenue decreases, increases in costs to manufacture goods or provide services, etc. Most of these factors are local (like some increases to the sales tax or ordinances requiring licenses, for example) and have little or nothing to do with the presidential administration.
The phrase “economic growth” refers to an increase this quarter in the amount of money made collectively by United States businesses over last quarter. Economists generally regard a showing of one percent as low. Whether businesses make money or lose it depends upon many of the same factors mentioned above, which, are not usually related to presidential actions.
However, the president occasionally does act nationally in a way that seriously affects the economy locally. President Bush provided an example of this action when he called for tariffs to protect United States steel companies. With the tariff, consumers must pay extra if they wish to buy steel from a foreign source. When quality and price are similar, consumers decide to buy from a domestic source, which, in theory, would save jobs. But if consumers do not perceive the domestic company products to be comparable to the foreign ones, they tend to buy foreign.
Tariffs raise the issue not only of jobs but also of the trade deficit. Daschle did not mention it in his speech, but the U.S. trade deficit reached a record $130 billion in the most recent quarter. Should Bush be faulted for that?
A nation with a trade deficit imported more than it exported. While President Bush’s tariff may persuade people in the United States to buy domestic products, it may also persuade people in other nations not to buy from the U.S. Therefore, it may have both a positive and negative effect. For the most part, however, the president has little direct influence over the trade surplus or deficit.
Budget deficits, on the other hand, are a different matter. The president proposes the budget each year to Congress. He also holds the power over veto, which enforces his ability to get much of what he wants when Congress enacts the final budget. President Bush’s tax cuts, which have resulted in less revenue to the government, have contributed heavily to our budget deficit of approximately $157 billion.
As for Senator Daschle’s last complaint, the $4.5 trillion loss in stocks, the president again has no direct control over them. If the public collectively buys significant amounts of stock, stock prices rise. Likewise, stocks tend to fall when large numbers of people sell their stock. The companies that allow for the best return, like Coca-Cola, for example, build reputations that have little to do with who the president is. The same is true of companies that do poorly, like the so-called “dot.com” companies.
Critics of President Bush,
like Daschle, should be objective in their remarks. Instead of launching a tirade about job losses and stocks, the
opposition to the Bush Administration would serve the public best by presenting
alternatives to the tax cuts and budget deficits.