Robert Samuelson writes,

The U.S. economy seems to have just voted for George Bush. Almost all recent indicators favor the president’s reelection: economic growth, rising at a 7.2 percent annual rate in the third quarter; jobs, increasing 286,000 since August; productivity, advancing at roughly a 5 percent rate since late 2001. Nariman Behravesh, chief economist for the forecasting firm Global Insight, has one of those equations that predict election results based on the economy and various political factors (incumbency, party affiliation). By the latest reports, Bush wins 56.6 percent of the 2004 vote.

Behravesh admits that these equations aren’t infallible and that even if the economy stays strong, other factors — Iraq, terrorism — could doom Bush. But the business cycle is moving in his direction. It’s psychology as much as numbers. Behravesh talks regularly with corporate executives who, until recently, “had retreated into their shells. They stopped capital spending. They stopped hiring. They became extremely risk-averse. Now, they’re coming out of their shells.” Capital spending (aka business investment) and hiring have both revived. In the third quarter, business equipment and software spending rose at a 15 percent annual rate.

Government policy and the enormous resilience of the U.S. economy explain the turnaround. Critics can gripe about Bush’s big budget deficits and tax cuts, but they’ve obviously juiced the economy. The tax cuts alone provided $61 billion in fiscal 2003 and will add another $149 billion in fiscal 2004, estimates the congressional Joint Committee on Taxation. Next year’s tax refunds are expected to rise 27 percent, says USA Today. (Cynics may suspect Bush of trying to buy the election.) Similarly, the Federal Reserve’s low interest rate policy encouraged massive mortgage refinancings — boosting consumers’ purchasing power — and aided the economy in countless ways.

The business cycle was unkind to Bush 41, fixing the economy about two months too late for the voters to notice. It’s apparently going to be kinder to Bush 43.

FILED UNDER: 2004 Election, Terrorism, , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Paul says:

    Step 1: Retrieve dead horse

    Step 2: Beat it.

    And THAT is why I said over a year ago and have said repeatedly since then, that the Dems running against the economy 2 or 3 years out was patently foolish.

    All they did was tell the voters that Bush was responsible for a great economy.