Something's Gotta Give

I was at the gym yesterday and was unable to avoid looking up at CNN on one of the TVs there, just in time to catch "douchebag for liberty" Robert Novak trying to spin away the favorable poll numbers for Kerry that I mentioned last night. When the CNN host pointed out that no incumbent with favorability ratings this low at this point in the election cycle has gone on to win a second term, Novak retorted that no incumbent has ever lost in an election year when the economy was growing at the rate it showed through the first quarter of 2004.

He's right. One of the few things I actually remember learning from polisci courses in college was that if GDP grows by 4 percent or more in an election year, the incumbent is home-free.

But if economic growth, as measured by GDP, leads to more votes for the incumbent, why isn't it happening already? Bush apologists likely would argue that there's a lag between the "reality" of economic growth and the perception that things are picking up among the electorate, but I have another explanation: Bushonomics itself.

Yes, the economy has been growing, but its benefits haven't yet "trickled down." Brad DeLong, with an assist from the New York Times explains it a lot better than I can, but the gist is that while corporate profits never really stopped increasing throughout the 2001 recession and the subsequent slow recovery, firms haven't passed those profits along to workers. As we all know, new hiring has been slow to pick up, and while wages have risen in some fields, a lot of other folks are just working more for the same pay as employers have squeezed impressive productivity growth out of current workers rather than adding new names to the payroll. What this means is that while those at the top are doing better than ever, workers aren't seeing their compensation increase proportinally--and as a result, they're not spending enough to really kick-start a strong economic expansion.

The reason people aren't giving the president credit for the economic growth measured in GDP is that they're not seeing the benefits of that growth. If Bush really wants a hand from his buddies in corporate America, he might be well advised to suggest they stop writing him checks and start paying their workers more...

Again, we see here how Bush policies might have planted the seeds of the administration's demise. A few more of these examples and I might have to start going to synagogue again.