THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume VII, Issue # 192, 2005
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
THE U.S. ECONOMY: STRONG, BUT UNAPPRECIATED
By Jon Kyle
AMERICA'S ECONOMIC PROSPERITY & AMERICAN PESSIMISM: THE DISCONNECT BETWEEN THE TRUE STATE OF THE U.S.
ECONOMY & THE PERCEPTION OF THE AMERICAN POPULATION -- THE REAL DANGER: ALLOWING A LACK OF ECONOMIC
SELF-CONFIDENCE TO BECOME A SELF-FULFILLING PROPHECY
FULL STORY:
America's economy is, in most respects, stronger than it has been in years. So why are so many Americans pessimistic about it?
Consider some key indicators: Real disposable personal income has grown by over 12 percent since the end of 2000. The U.S.
Department of Labor recently reported that more than 200,000 new jobs were created in July, 2005, and two million over the past
year. Over the past two decades, we have produced twice as many new jobs as have Europe and Japan combined. More Americans
have jobs today than at any other time in history, and our unemployment rate of five percent is one of the lowest of all developed
nations, lower than the averages of the 1970s, 1980s, and 1990s. Over the past 24 months, 3.5 million Americans have found work,
which is the equivalent of a new job for every worker in the entire State of Indiana. Demonstrating our national resilience and
flexibility in the face of change, we have replaced every single job that was lost in the dot-com bust with a new job, often in a new
industry.
Not that this transition has been easy. In the past four years, as President George W. Bush has noted, our economy has been
through a lot: a stock market decline, a recession, corporate scandals, an attack on our homeland, and the demands of an ongoing
war on terror. Change has come particularly hard for older workers in blue-collar industries facing tough global competition. But
those jobs are being replaced by information technology and service positions, which means safer, less strenuous work, and better
pay. And that same global competition provides more products, more choices, and better quality to consumers.
Moreover, broad growth in the overall economy has fueled particular gains among disadvantaged minorities. A recent census
study found blacks, Hispanics, and women starting businesses at rates far above the national average. According to preliminary
estimates from the most recent "Survey of Business Owners," the number of black-owned businesses grew by 45 percent between
1997 and 2002. Hispanic-owned businesses jumped 31 percent over the same timeframe, and women-owned businesses were up
by 20 percent.
Some have pointed to a modest decline in the participation of women in the labor force as a reason for concern, but labor economist
Diana Furchtgott-Roth of the Hudson Institute has found that the decline is mostly a reflection of good economic times and rising
incomes. Median family income is now above $52,000 a year, leaving more families able to live comfortably with one spouse working,
rather than two, and allowing more mothers the option of staying home with their children.
"Ironically," the Wall Street Journal notes:
"... for years, critics of the U.S. economy have complained that Americans are
'overworked' and that 'it now takes two incomes to produce the living standard
that once required just a working father.' To the U.S. bashers, it is a sign of
decline if more people are working, and it is just as bad if fewer people are
working."
The key to economic recovery in the early part of the new century was Congress's passage of President Bush's tax cuts -- the largest
tax relief in a generation. To keep the expansion rolling, a number of additional public policy reforms are necessary. Continued
regulatory reform will free small businesses, the most dynamic engine of the economy, to grow and hire more workers. The Death Tax,
perhaps the biggest threat to small companies because it can force liquidation when a founder dies, must be repealed (as has
happened in countries like Sweden and Russia) or at least scaled back significantly.
Still, as the Washington Post recently put it, "the latest data show the economy picking up steam." So why does poll after poll
show Americans to be so financially glum? Fear of a collapse in real estate values -- the so-called "housing bubble" -- has been a
mainstay of the business pages for several years now, but the market seems to have stabilized nationally, and, as long as the
population keeps growing, people will need homes. The Federal Reserve has been raising interest rates, but mortgages and car loans
are still remarkably cheap, by historical standards. Could it be the news media's coverage, which tends to emphasize the negative?
Could it be partisan attacks on the President, from those who have a vested interest in talking the economy down? Or, perhaps, it
could be lingering anxiety over the attacks of September 11, 2001 and the ongoing war on terrorism?
None of these factors really explains the disconnect between the true state of the U.S. economy and the perception of the population.
Whatever the reason, it would be tragic to let a lack of economic self-confidence become a self-fulfilling prophecy.
LINKS TO RELATED TOPICS:
Government & the Economy
Jon Kyle is a Republican member of the U.S. Senate, elected from and representing the State of Arizona.
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THE PROGRESSIVE CONSERVATIVE, USA
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Dr. Almon Leroy Way, Jr., Editor
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