Oil prices are soaring, the housing slump is worsening, the dollar is declining, consumers are losing confidence, a recession might be coming and some Democrats just may be giving thanks. Bad times could be good times for them.
The party’s presidential candidates have been talking as if we were in the worst mess since the Great Depression. They could have a lot to gain if a few statistics start swerving in the direction of their fallacies: The chances would increase that voters, overlooking the poison hidden in their remedies, would put one of them in the White House.
The public tendsto take it out on the party in charge of the executive when the economy goes in the doldrums. Too many people think that’s where it is now. They have gone to the extreme of believing the rhetoric of such office-seekers as former Sen. John Edwards, who talks as if much of the middle class is hobbling about on crutches while the rich have grown wings.
The falsity of those claims was recently underlined by a Treasury report showing that, during a period of nine years ending in 2005, average incomes shot up dramatically while the incomes of the top 1 percent dropped. We know that unemployment and the inflation rate have been remarkably low, that the poor are living in better conditions than ever and that most of them graduate out of their deprived circumstances. The Bush tax cuts were a blessing to the middle class, which takes far more deductions every year than the rich might dream of.
But if we get two quarters or more of no growth — a recession — jobs could start disappearing, profits eroding and stocks tumbling further downward than they have so far. Some say there could be good in this, that recessions rectify business inefficiencies and that this one could begin to set right an endangering trade imbalance with the rest of the world. But any positive consequences could also come from a mild slowdown. An outright, deep, long-lasting recession could release demons that would linger here and abroad for years, in the view of former U.S. Treasury Secretary Larry Summers.
Summers thinks a recession likely, while many economists think the country can avoid one over the next year. Much depends on what consumers do — they account for 70 percent of the economy. The news on that front is good at the moment. On Black Friday, sales increased over the previous year, a sign that we could be in for a robust holiday shopping season.
Other signs remain worrisome, however, and here is the last thing you want to do in the face of a recession: raise taxes. And here is what the top Democratic presidential candidates have been vowing to do: raise taxes. In a blatant appeal to the envy vote, they have announced plans to rescind the Bush tax cut for people earning high incomes, even though they are the ones who pay the vast majority of taxes, and even though such a move would actually feed recessionary tendencies. Voters should make the possibility of bad times a special reason to oppose bad ideas.
Examiner columnist Jay Ambrose is a former editor of two daily newspapers. He may be reached at SpeaktoJay@aol.com