One of the perks of being president is being able to take credit, deserved or not, for good news. Of course, the opposite is also true, and adding to President Bush’s run of bad news is a softening economy.
New figures from the U.S. Commerce Department show that economic growth slowed sharply from the first to the second quarter, and that the quarterly inflation-rate increase matched that of the first quarter of 2001, itself the highest since 1994.
This put the Federal Reserve Board in a bit of a dilemma. It has been gently raising rates over the past two years to clamp down on inflation, but further increases could cause the housing market -- sales of new and existing homes are dropping fast -- to cool even faster.
That’s important because how people feel about the economy is politically more important than what the statistics actually show, and most homeowners have the bulk of their wealth tied up in their homes.
Bush and his advisers feel that he should be getting far more credit than he does for economic growth during his term. But the polls show that the public does not have great confidence in his handling of the economy. Workers do not feel they’re doing as well as they should be.
This week, the Census Bureau released a survey that perhaps explains why: They’re not. The Census reported that real median household income -- that’s after adjusting for inflation -- rose 1.1 percent last year. The White House seized on this as good news, but the survey pointed up that median household income fell the previous five years and still has not returned to where it was at the end of the Clinton administration.
In any event, the median income for individual workers fell again last year. The reason household income rose is that more people in the household are working.
There is good news for Bush that could keep these numbers from further eroding his rather low popularity. While economists see signs of softening, they see no sign of a recession. The U.S. Department of Labor said there was more job growth in August. And as the Tribune reported Thursday, gasoline pump prices are finally on their way down again.
If the cost of gas drops far enough, that might provide a new boost to the economy that Bush could use right now.