More Economic Points

More Economic Points

From Rich Lowry of the conservative source National Review.

Bush by the numbers

The numbers speak of strong overall economic growth. The gross domestic product -- the figure for the total output economy -- grew at an 8.2 percent rate in the third quarter of 2003, and at a 4 percent rate in the fourth quarter. The GDP is forecast to grow at a 4.5 percent rate in 2004. As economist J. Edward Carter writes: "For the third consecutive year, the U.S. economy is poised to grow faster than most other industrialized economies. France, Germany and Japan, for instance, are not expected to grow even half as fast as the United States."

The numbers indicate an economy constantly finding new and better ways to work. Nonfarm productivity -- a crucial indicator of economic efficiency that corresponds over the long term with higher wages and greater national wealth -- grew at a healthy 4.2 percent rate in 2003. During Bush's first three years in office, productivity has been increasing at a 4.1 percent annual rate, the best start to any presidential term in roughly 50 years.

The numbers highlight a booming housing market. The rate of homeownership hit 68.6 percent during the past three months of 2003, an all-time high. Sales for new and existing homes were also at all-time highs last year. Housing starts have jumped 26 percent since 2001, and the 30-year fixed mortgage rate has dropped 20 percent, from 7.06 percent to 5.66 percent.

The numbers tell of bustling activity all around. Manufacturing production has increased 2.3 percent since January 2003. There was a 10 percent increase in equipment and software spending in the fourth quarter of 2004, the third consecutive quarter of strong growth in such investment. In January, retail sales were up a robust 5.8 percent over a year earlier. Profits among companies that are part of the Standard & Poor's 500 stock index increased by 26 percent in the fourth quarter of 2003.

The numbers trumpet a stock market that has recovered from the Clinton era bubble. Since the trough of October 2002, the stock market's value has increased by more than $4 trillion. The market capitalization of the New York Stock Exchange and NASDAQ has grown roughly 40 percent since October of 2002.

What do the numbers say about those tax cuts that are either irresponsibly large or laughably small, depending on which Democrat is attacking them? Personal tax payments have declined 19 percent since 2001, and disposable income has thus increased 11 percent. In 2004, U.S. households are expected to receive $300 billion more in income-tax refunds than in 2003 (yes, the budget deficit has gone up, but it is economically inconsequential, and Democrats don't have any serious plans for reducing it anyway).

The numbers provide some perspective on Bush's biggest political liability: lagging job growth. Since reaching a high of 6.3 percent in June 2003, the unemployment rate has dipped to 5.6 percent, lower than the average unemployment rate of the 1970s, 1980s and 1990s.