Economic recovery is Bush’s big victory

The presidency of George W. Bush has been a time of uncertainty for both his political allies and foes. He has had a tumultuous time in office by inheriting a weak economy, was blindsided by the security and financial ramifications of Sept. 11, 2001, headed to war in Afghanistan, went against popular international opinion in entering Iraq and now faces an additional financial crisis in the massive trade deficit with China and a security crisis because of escalating tensions with North Korea.

In some regards, the verdict is still out. Increased security in this country has surely prevented another massive terrorist strike, and The New York Times wrote Monday of the revamped security along the Mexican border. But reports have also been released detailing security breaches, such as weapons smuggled onto airplanes, that are horrifying in their implications.

The war in Afghanistan was, by most accounts, a success. The war in Iraq, however, is another story. It has yielded designs for sophisticated weapons of mass destruction, revealed the true horror of Saddam Hussein’s regime and uncovered the astonishing arms cache the dictator was hiding. Yet the weapons of mass destruction themselves have yet to be found and handfuls of U.S. soldiers are dying by the day in guerilla warfare.

This makes last week’s economic news all the more important. As media pundits and Democratic opponents continue to focus on the conflict on Iraq, Bush has racked up his most significant policy victory here at home.

During the last financial quarter, the U.S economy grew at its fastest pace since 1984. Expanding at a rate of 7.2 percent, government reports indicate a surge in consumer spending, a major increase in exports and, perhaps most importantly, substantial investments by U.S. companies in equipment and technology.

Each of these components is crucial to an economic recovery and reveal, in some manner, why many of Bush’s policies have helped turn this economy around.

The surge in consumer spending is widely attributed to the tax cut Bush passed through Congress over staunch Democratic opposition, suggesting that consumers received checks from the government and then went out and spent the money, just as the Bush administration envisioned.

The increased technology and equipment spending, which will surely lead to additional technology, manufacturing and engineering jobs, is a testament to the economic philosophy preached by many Republicans: supply-side economics. In this strategy, the government focuses on giving tax breaks to businesses and individuals, hoping the money will then spread through the entire economy. In this instance, it appears to have worked.

The final critical component of the economic equation is the consistent cutting of interest rates by the U.S. Federal Reserve Board. Through cutting rates, the Bush administration encouraged companies to borrow and invest money and also created a housing market of low mortgage rates that kept home purchases high and dollars flowing through the economy.

Despite inheriting a dying economy and suffering the paralyzing economic effects of Sept. 11, 2001, the Bush administration has turned the ship around. Even his detractors must admit: Bush and those he has surrounded himself with were right.

Unlike other recent surges in the economy, this growth spurt looks more permanent. Spending on technology and equipment should boost an employment market that already reported a decline in unemployment claims last week. By all accounts, better times are here to stay.

Granted, Bush has not proven himself in every regard. But the other issues, namely security and conflicts abroad, tend to split voters down party lines. His supporters are willing to give him the benefit of the doubt, adopting a wait-and-see attitude. His opponents trashed him before he ever made decisions on these issues and are unlikely to change their tone now.

No, it is the economy where Bush is most vulnerable. He has been criticized endlessly for his policies, most viciously for his tax cut. But to see the astonishing growth that has occurred and the speed with which it happened is an undeniable political upset by the Bush team.

When it comes to next year’s widely anticipated presidential election, the key issues will not be the divisive ones, but the economy.

This is where Bush will either attract new voters or lose his most devout supporters. He will be judged on his ability to take a bad situation and work with it and his success in giving the country a badly needed boost.

It is here where Democrats should be most terrified. Given last week’s announcements and the indication of what is to come, Bush just hit a grand slam.

Steven Snyder’s column appears alternate Thursdays. He welcomes comments at [email protected]