The state of the union is much better than the state of George W. Bush's
presidency.
Although the country currently has an economic headache, the recovery from
the triple hit of the dot.com bubble, recession and the 9/11 attacks was
remarkable.
The economic recovery produced strong revenue growth for the federal
government which has resulted in an essentially balanced budget. The
deficit is less than what the federal government is spending in large
capital purchases, which are customarily financed by state and local
governments.
The surge in Iraq has significantly reduced the violence, created civic
living space in much of the country, and renewed hope for the country's
future.
Perhaps most important of all, there has not been another domestic
terrorist attack since 9/11.
Yet Bush's approval ratings are abysmal and every public opinion poll
indicates that the country wants a change in direction. Why the large
disconnect between the reality of the country's situation during Bush's
presidency and public opinion regarding his stewardship?
Part of it is due to factors beyond Bush's control.
Due to globalization, the pace of the creative destruction that is an
inherent part of a market economy has quickened. Jobs are created and
eliminated more rapidly. People are feeling economically insecure.
Some of the traditional bridges to the middle class for those without a
college education — manufacturing and construction — have weakened.
For manufacturing, it has been primarily a result of mechanization and
productivity gains and only secondarily off-shoring. For construction, it
is largely a result of the depressive effect of uncontrolled immigrant
labor on wages.
Incomes have been rising, particularly after-tax income due to the Bush tax
cuts. However, inflation is eating away the gains.
Inflation has been very rampant in health care and higher education, two
markets substantially influenced by government. However, general consumer
inflation is now over four percent.
While these factors are largely outside of Bush's ability to influence, he
didn't use his bully pulpit to address and explain them and perhaps adopt
more extensive and broadly-based cushioning programs, such as retraining
accounts. The predominant attitude coming out of the Bush administration
was that the sense of anxiety was irrational; the economy was doing fine.
Of course, by rushing into an emergency stimulus package, the
administration is flashing neon signs that the economy is not fine.
Meanwhile, the Fed is taking action that will exacerbate the inflation
problem.
This has been a Bush tendency. Avoid hard discussions, such as why tax cuts
for the wealthy are economically important. And when hard discussions
cannot be avoided, paper them over with a political solution. If economic
anxiety has reached a politically unavoidable level, throw $150 billion at
the population.
On Iraq, things might be going better. But the American people still
believe that the enterprise hasn't been worth its cost.
Bush's political persona has also not worn well. The Texas swagger doesn't
match the American sense of uncertainty and unease on many fronts.
And after seven years, the lecturing style of Bush's speech-making grates.
His State of the Union address was full of things Congress "must" do. His
foreign policy speeches are full of things other sovereign countries "must"
do.
Well, Bush may have identified things Congress and other countries ought to
do, or that it would be beneficial for them to do. But they are independent
entities. Enacting the Bush agenda is not a "must" for them.
I should cheer Bush finally getting tough on spending and earmarks. But I
just can't work up that much enthusiasm or appreciation. The fact that he
only found a backbone on spending after Democrats took over Congress just
makes it too hypocritical and hollow.
American politicians rarely leave the stage gracefully. But the modesty, in
substance if not in length, of Bush's State of Union address suggests he
might manage the process better than most.
Stripped to its essence, this was Bush's pitch: I have some things I need
to say politically. But the bottom line is this: please don't pull the rug
out from under me on Iraq and don't rob me of the surveillance capability
to protect the country against terrorist attack.
That's an appropriately modest agenda for a man who retains power but has
lost persuasion.
