What You Won't Hear in the State of the Union

[bigpoppanils]

What You Won't Hear in the State of the Union: Gene Sperling

Jan. 31 (Bloomberg) -- If you have been following President George W. Bush's remarks on the economy over the past few months, you can probably guess what he is likely to say during the State of the Union.

While there will likely be a brief, obligatory concession that some Americans are still struggling, the president's text and subtext will be straight forward.

The text will be that the economy ``has a full head of steam'' due to his tax cuts, and that we better make them all permanent -- even those directed to the most affluent -- to keep the good times rolling.

The subtext will of course be, ``What the heck is the matter with you? How can only 37 percent (according to a recent Bloomberg/LA Times poll) approve of my handling of the economy when we have had two solid years of growth?''

With fewer and fewer Republican incumbents wanting to run on Bush's handling of Iraq, turning around public perception of the president's economic leadership is no doubt a top political priority for the White House.

Since you are unlikely to hear, either in the text or subtext, any of the legitimate economic reasons Americans aren't buying President Bush's economic message, I will perform a public service by providing a few.

Economy, Workers

What you won't hear on the economy and typical workers:

The president will certainly recite some version of his statement that ``The American economy heads into 2006 with a full head of steam,'' by talking up recent gross domestic product growth.

While real GDP growth of 3.2 percent has been significantly below average compared with similar economic recoveries, the 4.2 percent and 3.5 percent growth in the last two years was solid.

What the president will not be talking about, however, is exactly what most working families care the most about -- their wages. Hourly and weekly wages in inflation-adjusted terms have actually fallen slightly since the recession ended in November 2001.

While many Bush defenders seem to think it is unfair to talk about anything other than the past two years of the economy, the picture is just as bad during this oft-mentioned period after the capital gains and dividend taxes were cut.

To be precise, real average weekly earnings have fallen 0.9 percent (to $550.60 in December 2005 from $555.65 in December 2003), while real average hourly earnings have dropped further, down 1.2 percent (to $16.34 from $16.54).

Family Income

The story on family incomes is just as disappointing. Both family and household incomes have fallen and poverty has risen every year under this administration, according to the annual census report on income and poverty. According to this official tally, median household income has declined $1,669 from 2000 through 2004, falling each year since the recession in 2001. The poverty rate jumped to 12.7 percent in 2004 from 11.3 percent in 2000.

What you won't hear on jobs:

You can bet your bottom dollar the president will highlight recent job growth to show that his tax cuts have reignited the great American job machine. By focusing on the more than 4.6 million jobs added since May 2003 the administration wants people to ignore the unprecedented 1.1 million jobs lost during the first 18 months of the recession and the mere 62,000 private sector jobs generated a month in the Bush recovery -- all part of the worst jobs recovery on record.

Below Average

The hope is that 4.6 million jobs sounds big enough that typical voters and lazy reporters will just accept it as a sign of strong job growth. But anyone who does the slightest bit of analysis will see otherwise.

This level of job growth is 2.5 million jobs below the average 2 1/2-year period under the Clinton Administration, and more significantly represents less than half the average rate of job growth in the similar periods of economic recoveries.

What you won't hear on unemployment:

While the president will definitely trumpet our 4.9 percent unemployment rate, he almost certainly won't explain that the unemployment rate can drop for two reasons: either because job growth is strong (which is good) or because fewer people are looking for work (which is generally not so good).

Dropping Out

Unfortunately, the story behind the unemployment rate's drop has been one of Americans falling out of the labor market. The main reason unemployment is low is that a smaller share of the population is working or looking for work than when Bush took office. If this weren't the case, the unemployment rate would be 6.6 percent to 7.2 percent -- numbers that I guarantee you will not hear in the State of the Union.

This is in line with estimates by Boston Federal Reserve economist Katharine Bradbury, who found that the decline in labor force participation cuts 1 percent to 3 percentage points from the official unemployment rate.

I want to be clear about one thing: I don't blame Bush's economic policies for all of the weak statistics that will not make it into his State of the Union. There are usually several causes for the good and bad aspects in the economy.

But the president should certainly not be allowed to use recent economic performance, which includes weak job and wage growth, as a justification for fiscal policies that have ignored our nation's critical investments in our future and led to the worst fiscal deterioration in our nation's history.

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_sperling&sid=afEwQxAXRHv4

[drlogic]

LOL

What a joke!

I love how the "haters" keep coming more and more unhinged....completely disconnected from reality.

That piece was pathetic! I hope you stop to take a breath from that garbage.

The author apparently seems irritated that he and those like minded have failed in their quest to destroy the Bush agenda. Bush is shoving it right up their rears and now we can watch the critics squirm......LOL

PS..DID YOU SEE TED KENNEDY YESTERDAY? LOL LOL LOL LOL LOL LOL

For a "dumb cowboy", he's sure getting things done. From judges to elections in Iraq............What does that say about his critics? If they consider him dumb, and they've just been "skool'd" by a "dumb cowboy", they are what? Exactly????

LOL

[ghhhhhost]

i love how having a differing opinion means ur automatically "completely disconnected from reality" ...because ur reality is the right one..because its a proven fact....because there isnt evidence to suggest the contrary...

[drlogic]

i love how having a differing opinion means ur automatically "completely disconnected from reality" ...because ur reality is the right one..because its a proven fact....because there isnt evidence to suggest the contrary...

Simply put....

Everyone IS entitled to their own opinions,

BUT not their own FACTS....

and there's the rub,,,,,,,Casper!

[ou812]

Simply put....

Everyone IS entitled to their own opinions,

BUT not their own FACTS....

and there's the rub,,,,,,,Casper!

Very true.

But for healthy debate purposes at least dispell what is being written. Give examples to the contrary. Criticism is natural part of debate, insult is not. Insult is the result of being frustrated and unable to refute what you don't agree with.

[drlogic]

Very true.

But for healthy debate purposes at least dispell what is being written. Give examples to the contrary. Criticism is natural part of debate, insult is not. Insult is the result of being frustrated and unable to refute what you don't agree with.

Opinion noted.

lol

[Felix_Leiter]

Very true.

But for healthy debate purposes at least dispell what is being written. Give examples to the contrary. Criticism is natural part of debate, insult is not. Insult is the result of being frustrated and unable to refute what you don't agree with.

we dont have too many economists here..