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Tuesday, April 16, 2024

Bush’s rosy economic picture misleading

The Bush administration has grown increasingly flummoxed over the public's sour view of the nation's steadily growing economy, but critics say that despite the rosy picture painted by the president, America's middle-class families are struggling.

The Bush administration has grown increasingly flummoxed over the public’s sour view of the nation’s steadily growing economy, but critics say that despite the rosy picture painted by the president, America’s middle-class families are struggling.

Recent polls, including one released by Gallup in mid-November, show that most Americans don’t share the administration’s enthusiasm for the direction in which the economy is headed. That survey found only 37 percent assessing the nation’s financial portrait as excellent or good while 63 percent rated it good or poor.

Results like that have compelled President Bush to spring into action, praising the economy for creating new jobs and providing opportunities for workers to buy their own home.

“Thanks to tax relief, and spending restraint, and pro-growth economic policies, this economy is strong, businesses are booming, and the people in this country are working,” Bush told supporters in Kernersville, N.C., on Monday, the first in what promises to be a series of speeches on the economy.

“See, we can’t take this growth for granted,” he said. “So we’re moving forward with a comprehensive agenda that’s going to keep the economy growing to make sure people have got a hopeful future. Keeping this economy growing begins with a commitment to keeping your taxes low, and at the same time being wise about how we spend your money.”

In support of its argument, the administration cites figures showing that nearly 4.5 million jobs have been created since May 2003. The gross domestic product grew by 4.3 percent during the third quarter this year while productivity jumped 4.7 percent over the same period.

But for every good piece of news, it seems, there is countervailing data to create unease.

Rising fuel prices have left many Americans skittish, even though the hikes have leveled off in recent weeks. The average price of a gallon of gasoline nationwide as of Dec. 5, according to the federal Energy Information Agency, was almost $2.15. Families in colder climates have been left wondering how they can afford to pay for heating oil this winter.

“Despite solid economic growth, America’s middle class is struggling,” said Christian Weller, senior economist at the Center for American Progress, a Washington-based think tank. “The expanding economy has not translated into solid income gains. Instead, job growth has been anemic and wages have actually declined. To make ends meet, middle-class families have borrowed massive amounts of debt.”

More critical is a decline in purchasing power, which is tied in some degree to the increased energy prices. The gross domestic product has increased steadily over the past few years and corporate profits remain healthy, rising more than 50 percent since the last quarter of 2001. But many Americans have seen their wallets grow thinner.

According to the U.S. Census Bureau, in a report released in September, real median household income fell for the third year in a row in 2004, dropping from $46,058 in 2001 to $44,389 in 2004, leaving workers with less money for expenses like gas, home heating oil, health care and education.

Making matters worse, real household income for the bottom 20 percent of earners declined by 7.9 percent from 2000 to 2004. Estimates for 2005 are not yet available, but economists expect that earnings likely haven’t kept up with inflation.

And while the unemployment rate has remained around 5 percent for months, economists note the number of unemployed has increased from 6 million to 7.6 million since the start of the Bush presidency. That’s because the economy has to create 150,000 new jobs each month to keep up with demand _ a goal that has not been consistently met over the past five years.

Senate Democratic leader Harry Reid of Nevada said Americans find themselves caught in “the middle-class squeeze of rising prices and lower wages impacting too many working families.”

(Contact Bill Straub at StraubB(at)