Seventy-two percent of Americans think economic conditions in the country are getting worse. That’s because this economy isn’t working for most Americans. The wealthiest few have captured the blessings of growth, while incomes are stagnant: Despite several years of growth, they still haven’t matched the peak of 2000, before the tech collapse. And most Americans aren’t keeping up with the soaring cost of basics like healthcare, energy or college tuition. Now the housing bubble has burst, and millions are facing rising mortgage costs, declining housing values and a spreading credit squeeze. Nationally, we’re running a huge trade deficit and are paying more in interest abroad than we earn from foreign investments. But in the presidential debates thus far, the economy seldom gets much attention. Even as the mortgage crisis staggered Wall Street, ABC moderator George Stephanopoulos seemed almost apologetic when asking about the economy in the August Democratic debate in Iowa.
The Republican presidential contenders tout the Bush economy as, in Fred Thompson’s words, “the greatest story never told.” Four years of growth, low unemployment and inflation, rising profits and productivity–what’s not to like? This affirms the candidates’ faith in the conservative scripture: lower taxes, particularly on the wealthy; free trade; deregulation; privatization. Their one quibble with George W. Bush is that he hasn’t been tough enough on domestic spending. The terror caused by the collapse of levees in New Orleans, a bridge in Minneapolis and a steam pipe in Manhattan, and the daily reality of overcrowded schools and kids without healthcare, take a back seat to their desire to cut domestic spending and roll back Medicare and Social Security to preserve tax cuts and a growing military budget. GOP front-runner Rudy Giuliani boasts that he is the true economic conservative in the race. His twelve “commitments to the American people” are laced with the usual bromides: “cut taxes,” “fiscal discipline,” “cut wasteful Washington spending,” “expand America’s involvement in the global economy.” His stump speech, muscular on Iraq, terrorism and his “leadership” abilities, is strikingly anemic on economic issues. Giuliani clearly thinks it ain’t broke and needn’t be fixed.
In rare contrast, Mitt Romney has developed an activist growth agenda that mirrors advice proffered by former Treasury Secretary Robert Rubin to Democratic candidates. Romney embraces free trade but argues that because “design and innovation ultimately are done best next to manufacturing,” “it’s critical, therefore, that America maintain our lead [sic] in manufacturing.” For Romney, this requires government to expand investment in R&D and education, cut healthcare costs by making it universal and achieve energy independence. The latter, he argues heretically, “can’t be achieved by simply counting on the market to do its job.” Government must provide investments and regulations. He supports tougher trade policies with China, but this is stock rhetoric, likely to be ignored if he’s elected. Romney then contradicts this agenda by reciting the conservative gospel: lower taxes, less spending, removing “undue regulatory burdens.” It’s as if he can’t resist flashing a little knowledge before moving into pander patter.