Bush, Kerry Offer Different Takes on Economy

Listening to President Bush and Sen. John Kerry (search) talk about the economy, voters might almost think the two candidates were describing different countries.

To Bush, the economy is "strong and getting stronger" while Kerry derides an administration that he says has the worst jobs record since Herbert Hoover (search) in the Great Depression (search).

Both campaigns are selectively using data to support their arguments about the economy, which has been under special scrutiny as Kerry highlights ways he says he would deal with such anxieties as rising prices for gasoline, health care and tuition.

The Kerry campaign wants voters to answer the question that Ronald Reagan first used with great effect against Jimmy Carter (search) in 1980, "Are you better off today than you were four years ago?"

The Bush campaign, arguing that America has gone through a series of shocks from recession to terrorist attacks, wants voters to examine a different time fame — the past 12 months, when the economy has finally begun to show signs of a strong rebound.

"The administration is focused on an improving economy while the Kerry folks are focused on the fact that the economy is improving after a very difficult period and there are still lots of households that are stuck in a very deep hole," said Mark Zandi, chief economist at Economy.com.

To bolster their rebound argument, Bush and the Republicans note that the gross domestic product, the total output of goods and services, started revving up last summer and is forecast to grow this year by a sizzling 4.7 percent, which would be the fastest in 20 years.

That fast growth has triggered stronger job creation, something that had been badly lagging. Nearly 1 million jobs have been created in the past three months and 1.4 million since August.

"People are going back to work. The economy is getting better," Bush told a crowd in Ohio, where he traveled on Monday to tout new job figures showing that Ohio, one of the hardest hit manufacturing states, had seen its unemployment rate decline in May to 5.6 percent. Similar improvement is being seen in several battleground states.

But as the Kerry campaign is quick to point out, the current job growth follows a dismal period at the beginning of the Bush presidency when the country was shedding jobs because of the recession and the lackluster recovery.

At the bottom of the jobs slump last August, the country had lost 3.5 million positions since Bush was sworn in. Even with the rebound since then, Bush is still down by 1.2 million payroll jobs from when he took office in January 2001. If that deficit isn't made up by the end of his term next January, he would be the first president since Hoover with a net loss.

Bush supporters note that the nation's unemployment rate — at 5.6 percent — matches the level of unemployment at the same point that Bill Clinton was running for re-election in 1996.

The "Misery Index," the total of the unemployment rate and the inflation rate, is now at 7.3, reflecting consumer prices outside of energy and food rising by 1.7 percent over the past 12 months and an unemployment rate that is down to 5.6 percent, after having peaked at 6.3 percent last year.

That level is better than it has been in most of the years since World War II.

However, Bush does not fare as well under a new version of the "Misery Index," created by Kerry strategists, that measures seven indicators they say are a better indication of middle class welfare — the prices of gasoline, health care and college tuition, the number of jobs, median family income, personal bankruptcies and homeownership.

Under this measure, only homeownership, currently at a record level, has shown improvement during the Bush years.

The Bush campaign says the measurements were selected by Kerry's people to make Bush look bad and that some, such as college and health care costs, have been going up for decades.

"Whatever he can find to make people unhappy, he will find it," said publisher Steve Forbes, a Bush supporter.

The Kerry campaign, however, sees its new index as a way to explain why many middle class families feel they are losing ground in a globalized economy that has seen U.S. workers face intense competition from low-wage countries.

"We were trying to look at things people talk about over their kitchen table," said Gene Sperling, a Kerry adviser and former top economic adviser to Bill Clinton.

While recent polls have shown lingering unease over Bush's economic positions, supporters contend that by Election Day, with more months of strong job growth, voters will feel more confident that the president's policies of tax cuts to spur economic growth are working.

They may be right, economic forecasters say.

"Most of our historical work suggests that voters have very short memories and it is really the last year that dominates their thinking with employment tending to be the best variable to predict the outcome," said David Wyss, chief economist at Standard & Poor's in New York.