Jewish World Review May 24, 2004 / 4 Sivan, 5764
Good golly, Ms. Gandhi! Lessons for President Bush
http://www.jewishworldreview.com | The economy's humming along. Companies are hiring again. Technology is soaring. More shops are reporting more sales. Consumer confidence is up, and so are the markets. It's enough to make an incumbent party practically giddy!
Trouble is, in India, it wasn't enough to make that incumbent party win. In a stunning rebuke to the notion "it's the economy, stupid" came reminders it's also "the perception, stupid."
India's ruling party is out, and a decidedly more leftist, anti-business party, actually a coalition of parties, is in. And not because the economy wasn't recovering, but in a weird twist on electoral history, precisely because it was, but crucially not for everyone.
In a variation of Bill Clinton's "I feel your pain," Sonia Gandhi, the in-name heir to the political dynasty, echoed, "I feel your loss." She knew well that India's booming economy wasn't booming for everyone, that there were tens of millions of woefully poor who were not part of this economic miracle.
It was their anger she tapped, their dissatisfaction she ignited and ultimately, their votes she won. Societies have long been divided between those enjoying the wealth and those merely aspiring to it. In India's case, that divide had grown to a chasm. Never mind she doesn't want to head the new government; it is her "bring in the little guy" rally that will dominate the new government.
So disgruntled and angry were millions of dislocated Indians who never felt connected to the economy that they banded together at the voting booth.
Not surprisingly, reaction in the financial markets was swift and severe. The Bombay Stock Exchange tumbled 11 percent immediately following the election, a record one-day fall. That would be like our own Dow Jones Industrials swooning a thousand points in a single day. Investors feared the new coalition government, consisting of a hodge-podge of business-unfriendly parties, would sabotage the country's real recovery.
It's too early to see if their fears prove justified. What is very clear is the message their election sends to the Bush White House: Do not count on a strong recovery to lift you to victory this November. The fact of the matter is while the economy is recovering here, it's not felt across the board. What's all the more remarkable are polls on this very subject. Most Americans readily acknowledge things are improving, but they're a long way from where they should be.
Clearly, John Kerry wants to tap that voter angst. He's reaching out to those he says haven't connected with the improving data. Any economist will tell you it's a leap to ignore the good economic news and deny that a plausible recovery is in place. But politically, it's brilliant to reach out to those who feel the recovery hasn't quite hit home for them.
Kerry might take a cue from Gandhi herself, who made a point of visiting and campaigning in distressed areas of the country. Perhaps Kerry's already doing so, targeting ravaged industrial-based states like Ohio and Wisconsin, where thousands of manufacturing jobs have been lost.
The incumbent party in the White House always likes to say things are going just fine with the economy, and in this case, for the most part, the incumbent party is right. Just like it was right in India.
But the challenging party vying for the White House always likes to say things are not fine with the economy, and in this case, in small part, the challenging party is right.
The key is who capitalizes on that message better. Kerry's strong poll numbers, helped in no small measure by the ongoing situation in Iraq, indicate at least a good part of that stump speech is connecting.
There are still many months to go before the election, by which time reams of new data will confirm what the president has been telling us for so long things are getting better. Perhaps it will stick. But the message from India is, that doesn't mean it will rate.
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