Kos and Arianna ~ It Is the Economy


Yesterday Kos ran a front-page article titled Dems to Run On .... the Economy?"  He cited this piece from Arianna Huffington titled Déjà Vu All Over Again.  It's Not the Economy, Stupid!  Both Arianna and Kos argued that running on the economy would be a bad idea for Dems in the last few weeks of the campaign.  Arianna stated

"In poll after poll, voters place Iraq well above the economy when asked which issue will most affect their vote this year. And when you combine concerns about the war with concerns about terrorism/national security, it's the economy that is "a distant reality."

And Kos wrote:

See, that's why I don't think we're going to win back the House or Senate. Because you can always trust Democrats to snatch defeat from the jaws of victory.

Both argued the economy is not a good issue for Democrats.

Both are wrong


First - let's go to Polling Report to get an idea for what people out there are thinking.  First, Iraq/terrorism were always number 1 with "what issue concerns you most" or similar questions.  However, the economy was always the second most important issue to people in the latest three polls.  And the economy was the most important issue in an ABC news poll from September 5-7.

So - the economy is not the most important issue, but certainly not the least important issue either.  Why is that?  Well - how about we ask Democratic Party Chair Howard Dean who wrote an editorial yesterday in the Wall Street Journal?

Under Mr. Bush and the Republican Congress, incomes today are $1,000 less for the typical household than during Bill Clinton's final year in office; incomes for the typical working-age household have declined every year since the president took office. Black and Hispanic households have fared worse over the same period: Black household income has fallen every year, after rising every year (except for a one-year $60 dip) under Mr. Clinton. Incomes for Hispanic households are down $1,000, after rising more than $7,000 under Mr. Clinton.

Incomes have fallen because wages -- which provide 75% of income for typical families -- are stagnant for most workers. Under Mr. Bush, wages for college-educated workers increased only 1.3% between 2000 and 2005, as compared to 11.3% during Mr. Clinton's last five years. For the nation's lowest-paid workers, the situation is even worse, as the minimum wage is worth less now than at any time in at least 50 years.

The Census Bureau confirms Dean's statements in the latest statistics on national income which con cluded:

Nationally, 2005 marked the first year since 1999 in which real median household income showed an annual increase.

So - who is getting rich?  How about we remind people that corporations are taking the biggest share of national income in over 40 years:

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How happy would anyone be if they weren't making any more money today than they were 5 years ago?  How happy would people be if they knew someone was getting to keep more of the economic pie?  How many people would be willing to vote for the party that helped to usher in this great achievement?

I have an idea - let's ask all the voters if they are making more or less money now than they were 5 years ago. Put it in an add and ask a few random people how they were doing financially.

Then of course there is poverty, which has done nothing but increase under Bush:

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How about we put that graph in a national advertisement?  Or on a billboard?

Then there is the issue of jobs.  Bush's record of job creation is the worst of the last 40 years.

But so far, as the charts show, there are just 3.5 percent more jobs than at the end of the last recession. That is less than half the lowest of the nine previous moves -- a gain of 7.6 percent in the period after the 1953-54 recession. And that figure was held down by the fact that another recession, in 1957-58, had taken place by then.

This is far below the number of jobs he promised:

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How about we show these graphs of manufacturing jobs and information jobs, respectively?

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How about we ask people how easy is it for you to find a good paying job?  I bet the answer would be - really hard.

Then there is the issue of who runs the national finances better.  As Dean said in the WSJ editorial:

The Republican record on managing the federal budget is dismal. Republicans have turned surplus into debt, hope into lost opportunity; they have become the party of borrow-and-spend. The Joint Committee on Taxation estimates that the total cost this year of the president's tax cuts is $258 billion. This means that even with spending for wars in Iraq and Afghanistan and the response to Hurricane Katrina, the federal budget would essentially be in balance if the tax cuts had not been enacted, or if they had been offset as required under the pay-as-you-go rules that Republicans allowed to expire.

How about we show this chart over and over again in a ton of commercials:

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Then there is the issue of debt.  We could ask people - do you have to go into hoc just to live?  As Dean noted in the same editorial:

Americans are taking on more debt just to keep up in the Republican economy. Last year, household debt was a record 132% of disposable income. Not surprisingly, home mortgage foreclosures are also up; in March of this year, the foreclosure rate was 63% higher than last year.

Then there is this chart of total household debt outstanding.  It looks like people have to borrow to live:

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OK - I admit I am really biased in favor of discussing the economy.  It is -- after all -- all I write about.  If you look at my RSS reader you'll see a ton of financial news sources with a few wire services thrown in.  And Iraq is a complete disaster.  However, Bush's economy is killing people financially.  It's really that simple.  And it would be really great if someone actually addressed that issue - before the middle class goes away.


Bonddad September 23, 2006 - 7:53am
( categories: Economics )

Sweet set of graphs and good post. I especially like the components of national income graph. I'll probably run a post off of it.

Ian Welsh September 23, 2006 - 10:22am

It's a really damning graph.

Bonddad September 23, 2006 - 11:18am

That's a nice smooth graph of household indebtedness with no seeming discontinuities. That would seem to indicate that no matter what the economy does, folks are going to keep digging themselves into debt at an ever-increasing rate. Does this mean that to the average consumer, the overall state of the economy doesn't matter?

Or does it mean that the financial sector's ability to create instruments of indebtedness knows no limit?

I imagine that 50 year mortgages will soon become common and that this will enable the level of household indebtedness to rise to new levels.

Petronius September 23, 2006 - 12:51pm

This is extremely interesting to me. Full disclosure, I have always been one of the people who say, "It's NOT just the economy, stupid". I have always been skeptical of the idea that the health of the stock market has anything at all to do with how the average person is living.

I am inherently distrustful of economic explanations, perhaps partly because I do not understand them very well.

Also, it seems to me that the #1 issues in my judgement- ending the US occupation of Iraq and Afghanistan, don't have too much to do with direct economic data.

Yet with your graphs, your make a really good case that there is a real relationship between economic data and how the working class and middle class are doing. A real relationship between economic data and how people are actually living.

Maybe the thing is to tie these economic data to a real goal for society. Let the economic data show the importance of, ending the occupation of Iraq, Afghanistan, why we have to end global warming.

Or does that sound too naive?

Our virtues are usually only vices in disguise.

Aaron Dellutri September 23, 2006 - 9:11pm

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