delong on the economy
My friend Dodd and I agree (what, again?! What's the world coming to?) that the 2004 election will largely hinge on public perception of the economy. Dodd doesn't see a problem for the GOP, citing this column to support his contention that prosperity is just around the corner. I have my doubts, given the National Bureau of Economic Research's recent declaration that it's too soon to tell what direction the economy is moving, and that what recovery there has been appears to be jobless--that is, employment isn't lagging, but rather isn't likely to increase at all, as business are still burdened by overcapacity in an atmosphere of weak demand.
Economist J. Bradford Delong cites more "jobless recovery" evidence, and has a slightly different take on economic perception:
The question that should be asked is not, "Will the U.S. economy grow in 2003?" The question that should be asked is, "Will the economy grow fast enough in 2003 to reduce the U.S. unemployment rate?" And the answer to this second question looks to me to be "No."
An excellent point, especially considering that what recovery we have seems to be jobless, and that the Administration's "deficits forever" economic policy is sure to raise interest rates and serve as yet another brake on the economy.
DeLong also notes that "nobody thinks that the Bush administration's economic proposals are going to do anything to boost aggregate demand in the short run," paraphrasing columnist Paul Krugman in noting a pattern: "the Bush administration's modus operandi is to propose "solutions" that have nothing to do with the problems they pretend to address, but that do advance other administration priorities that they don't think can gain support on their own" DeLong also cites Krugman's annoyance "as the gap between what the Bush Administration's economic officials tell the public, the Congress, and reporters and what they tell economists, financiers, and business men widens."