Behind the Bush Boom
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Any lingering doubts over the wisdom of the Bush tax cut ought to have been dispelled this week when the Commerce Department’s Bureau of Economic Research released revised figures showing an 8.2% growth rate for the American economy in the last quarter. The rate was revised upward from 7.2%, and now represents the highest rate of growth for the American economy in almost 20 years. While it’s a fallacy to claim that the man in the White House deserves all the credit or all the blame for the performance of the largest economy in the world, it’s hard to avoid the conclusion that President Bush’s policies have played at least some part in revving up our economic engine.
As the holiday shopping season gets underway today, the part of Mr. Bush’s plan that will be most on the minds of Americans is his tax cut. That’s because many people will be out spending it. The National Association for Business Economics estimates that consumers spent more than 40% of the boost in their disposable income created by their tax cuts. Retailers in New York City and across the nation hope the spending trend will hold — and so does the Bush administration. “The tax cut was designed to get sales activity to a level that would force companies to begin rebuilding their inventories. That does seem to be taking root,” the chief economist for Chicago-based LaSalle Bank, Carl Tannenbaum, told The New York Sun. As companies rebuild their inventories, that will mean jobs.
Aside from the tax cut, however, the Organization for Economic Cooperation and Development identified another positive step from the Bush administration. “This turn for the better stems from a variety of factors,” according to a report released Wednesday.”Since the spring, the geopolitical environment has steadied, allowing oil prices to stabilize and confidence to strengthen.” The American successes in the war on terrorism, in other words, have contributed to the economic recovery at home by easing uncertainty about the timing of an invasion of Iraq. As voters ponder whether a Democratic president might be better for the economy, even if weaker on foreign policy, it’s worth remembering that the two are related, and that our best presidents — like Ronald Reagan — were successful on both fronts.
