The August 4th Gallup Poll is very strange. This is the headline:
"Republicans becoming more optimistic, but not Democrats"
Frank Newport is the Gallup Poll Director. He is a very sharp guy. I've heard him on radio often discussing polls and current events. The Gallup poll is also very reliable.
Newport writes that "...increased optimism about quality jobs has occurred selectively, however, with the largest increases occurring among Republicans and those with high household incomes. Additionally, analysis shows that one's party identification is a more powerful predictor of views of the job market than income, age, or region." (www.gallup.com)
I have never seen this before. A "red/blue way" of looking at the economy.
I did not vote for Clinton. Yet, I did not spend the late 90s in a state of depression because the high tech boom reduced unemployment. In other words, I was very happy to see a strong economy, even though I did not vote for the guy in the White House.
As it turned out, the great economy of the late 90s did not help VP Gore in 2000. He could not carry Tennessee and Clinton could not deliver Arkansas. It did not help Clinton either. He couldn't stop huge Democrat Party losses during his two terms.
So much for high approval ratings! Clinton had high approval ratings but they did not translate into votes.
Back to the US economy. Today's macro economic figures are very good.
They look extremely good from outside the US. Gerard Baker is a UK columnist and he does not understand all of the pessimism about the US economy:
"But when it comes to economics, all but America’s most fervent critics can still only marvel.
Consider the dry data.
In the three months to the end of June, US gross domestic product expanded at an annual rate of 3.4 per cent. That was the ninth straight quarter in which growth topped 3 per cent; by miserable contrast, Germany has not had nine quarters in the last 50 in which its economy expanded at that pace.
The US unemployment rate is down to 5 per cent. Wages are growing healthily."
Irwin M. Stelzer is a contributing editor to The Weekly Standard, director of economic policy studies at the Hudson Institute, and a columnist for the Sunday Times (London). This is what he just wrote about the US economy:
"When Bill Clinton left office almost 138 million Americans were at work; this June, that figure stood at close to 142 million.
Real compensation--wages plus benefits--was growing at an annual rate of 2.8 percent when Bush was settling into the White House; it grew at a significantly faster 3.9 percent rate in the first quarter of this year, the latest period for which such data are available.
In the past year, the economy has added 2.4 million jobs, 207,000 in July alone.
There's more, and in my view very significant, data that we should look to when thinking about how Americans live. Almost eight million privately owned housing units have been completed since President Bush took office. Of these, over six million were single-family homes. Home sales are at record levels, as are prices.
Add to all these indicators of rapid growth the happy fact that--thanks to rapid increases in productivity and some skillful monetary management by Alan Greenspan and his Fed colleagues--inflation remains low by historical standards.
In short, if we are headed for apocalypse, it seems to be an apocalypse later, much later, rather than an apocalypse now.
But don't judge the likelihood of a collapse by what you read in the papers."
Why are Democrats so gloomy about an otherwise healthy economy?
Maybe they are reading too much of Paul Krugman in The NYTimes, Koran stories in Newsweek or watching Carville at CNN.
Want to get depressed? Hang around liberals! More specifically, read Krugman.
By the way, Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He writes a "Krugman Truth Squad" column every week. You can read his latest rebuttal by clicking: http://www.nationalreview.com/nrof_luskin/luskin200508020828.asp
Furthermore, I think that Democrats are afraid that talking up the economy will help Bush. They fear that Bush will get the credit and do well.
There are a couple of problems with that argument.
First, a good economy helps everyone, including Democrat incumbent governors. It makes these governors more viable presidential candidates. Remember Dukakis? He ran for president in '88 by boasting of the Massachusetts miracle, which coincidentally occurred during the Reagan boom.
Second, and more importantly, Bush's political success is not based on the economy. Bush's success is rooted on national security and cultural issues.
Martin Frost represented the Arlington (Texas) area in Congress from '79 until he lost to a Republican in '04. He gave his party a little advice:
"What must Democrats do to improve their standing among white middle class voters in order to start winning national elections again, both for the presidency and for Congress?
Contrary to conventional wisdom, the answer does not start with economic issues.
It starts with national security.
Many middle class voters supported Republicans in 2004 because they were not convinced that Democrats would keep them safe -- either at home or abroad."
Why are Democrats so gloomy about the economy? I don't understand why. It makes no sense.