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player ready...Just like learning, a little recovery is a dangerous thing.
Even the slightest upturn changes moods. It causes people to spend more of their money. It creates some new hiring. It makes the country feel better about itself.
It makes people want to forget the past or even who might have caused their hardship. They just want to get on with their lives and on with the business of accumulating income and assets.
But, oh, how deceiving it will be this year. The emerging economic revival will serve as a brightly colored facade to a weak, unstable economic structure.
That`s why a little recovery is potentially injurious. It would push the economic issue into the background, and make it less likely that the candidates will resolve to do anything about the economy`s long-term structural problems.
Why do I sound so cynical about this? My two-word answer is this: past elections. The American people have proven to be easily hypnotized by the rosy glow of election-year rhetoric and short-term economic stimulation. They went with the flow. They believed an invisible hand guided their holy economy.
For many months, analysts have been saying that this year is different. People have been genuinely frightened about the economic outlook after a wave of layoffs and bankruptcies and collapse of local real-estate markets.
Now, though, the economic news is getting a little better. Economists David Jones of Aubrey G. Lanston & Co. and Stephen Roach of Morgan Stanley Inc. believe the ensuing rebound will be just enough to put Bush back into the White House for another four years.
They lament, as I do, that this could be accompanied without any significant debate on the nation`s long-term economic health. It`s a debate the country has sorely needed for more than a decade.
If an improving economy enables him to sneak by, said Jones, Bush will inherit an economy with horrible savings and investment problems, a huge overhang of debt, a glut of real estate, dysfunctional banks, lagging competition of business, and a country uncertain about its economic future.
Without any plans to address these problems, he said, the country will continue on its long-term economic slide.
”Unlike four years ago, he`ll be inheriting his own problems,” said Roach. ”The burden will be on him to make his place in history. We face some real challenges-competition, productivity, job creation, education.”
In other words, he said, the country needs more than a mood change, a yearlong prescription of economic Prozac, to solve these deeper problems. Jones, who a year ago correctly forecast a lengthy economic sluggishness, said he saw no chance of a lasting economic recovery until 1994. He believes this year`s snapback will last just long enough to get Bush into the White House.
Already the economic discourse has deteriorated with Paul Tsongas`
departure from the race. Neither Bill Clinton nor Jerry Brown seems interested in laying out a long-term economic plan. In New York, the media don`t relish candidates with thoughtful, sane (read boring) ideas. They like them angry, petty, sinful, mean-spirited and shortsighted, and Clinton and Brown have obliged.
Bush is lying back with no inclination toward candor about America`s economic future. With business activity beginning to perk up, he hopes to ride the improving business cycle to re-election as the Democratic Party tears itself apart.
The emerging direction of the campaign will cheat Americans out of a long-neglected debate over the future of their livelihoods. As it stands now, the country appears doomed to a long-term economic growth rate of roughly 2 percent.
It needs to be higher than this to absorb new workers into the labor force and to drive incomes up. At 2 percent growth a year, federal and state deficits will still be a problem, and American life will be tougher and meaner in the ensuing fight over income shares.
Allen Sinai, an economist for Boston Co. Economic Advisers, says it does not have to be this way if Americans demand for the first time in their history that the candidates come clean on the economy.
”We`re the bosses,” he said. ”We have to tell them what we want.”
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Sorry, Allen, but they don`t seem to be listening.