The Other Surge

Nearly all the questions at President Bush's press conference yesterday were about Iraq, but there's a surge going on closer to home that is worth some attention, too. That is in the stock market, where yesterday both the Standard & Poor's 500 Index and the Dow Jones Industrial Average climbed to record highs. So did the broad Wilshire 5000 index and the Russell 2000 index, which focuses on small-company stocks. Retailers such as Wal-Mart, J.C. Penney Co., and Costco reported strong June sales. Amid Democratic complaints about the trade deficit, American exports climbed to a record $132 billion. The rate of unemployment for May, the most recent month reported by the federal Department of Labor, was at a low 4.5%.

"Things look very positive," the Bloomberg wire quoted John Wilson, the co-director of equity strategy at Morgan Keegan & Co., which oversees $20 billion in Memphis, Tenn., as saying. Mr. Bush may be the most deprecated president since Bill Clinton at the height of the Monica Lewinsky scandal, but the signal the markets are sending is that he is doing an extraordinary job. Some may be tempted to credit the Democratic Congress, but the fact is that, thanks in part to Mr. Bush's veto threats and to the narrowness of the Democratic majority in the Senate, the Congress hasn't — at least yet — managed to put paid to Mr. Bush's pro-growth policies.

We wouldn't want to make too much of a one-day uptick in the stock market — the market took a one-day dive earlier this year, and it has been volatile. But it is up significantly on the year and even more significantly — about 24%, as measured by the S&P 500 — in the year and a half since the Bush tax cuts on dividends and capital gains took effect on January 1, 2006. Most of the credit belongs to American businessmen and their hard-working employees, but our president and his policies deserve a share of the credit for a surge that has fattened retirement accounts and brokerage account balances and filtered out, via bonus checks, into a remarkable prosperity in New York City in industries from real estate to retail.