If you're having trouble making heads or tails of which presidential candidate would be better for the economy, join the crowd.
Political ads are designed more to confuse than to elucidate (see "Is America Being Deceived By Bush And Kerry's Political Ads?"), and politicians talk in sound bites, doing little to actually educate listeners. Couple that with the fact that MTV's Choose or Lose polls consistently show jobs and the economy as the top concern of young adults, and you've got a recipe for frustration.
With little assistance coming from the campaigns, it may be helpful to look at the parties' contrasting philosophies to see how John Kerry and George Bush will likely approach economic issues.
The Republican Party takes the less-is-more approach when it comes to government getting involved in business. The party has long advocated lowering taxes for individuals and businesses, which, in theory, gives people more money to spend and thus routes dollars back to businesses that would otherwise be spent by the government. This approach is generally known as free-market economics.
"When we let the American people keep more of what they earn and save, they put that money to good use," President Bush said during his weekly radio address Sunday. "They demand more goods and services, which creates demand for new workers."
Critics of this view argue that a lack of regulation combined with lower taxes allows companies to move jobs overseas and cut benefits for workers while bringing in larger profits for those at the top of the corporate food chain. Republicans would argue that if a company is bad to its employees, the employees will move to a better company and the bad company would have trouble finding workers.
Democrats argue that government must enforce certain ground rules to ensure that businesses give American workers their fair share of the profits. Traditionally, this has meant support for workplace regulations such as a guaranteed minimum wage and organizations that protect workers' rights, like labor unions and advocacy groups.
"I believe the private sector is the engine of economic growth, and our party cannot love jobs and hate the businesses that create them," Senator Kerry said in a speech earlier this month. "We will fight for the mainstream American value of opportunity not just for some, but for all," he said during another speech on foreign trade.
Critics of the Democratic approach to regulating businesses point to small business owners who struggle to keep up with the regulations and tax requirements designed to keep larger organizations in check. These regulations, critics argue, make it difficult for individual entrepreneurs and small businesses to get off the ground. Democrats respond that the regulations are necessary to ensure that no worker is lost or trampled by large corporations that may value profit over humanity.
These different views not only give us clues as to how each candidate will approach the economy, they also help explain Bush and Kerry's takes on the economy now — what they choose to talk about and what they don't.
After a recession in 2001, a herky-jerky "jobless recovery" in 2002 and 2003, all indicators seem to point to an improved economy in 2004.
The Bush camp claims its massive tax cuts have led the way out of the slump because taxpayers kept more of their money and spent it on dishwashers, lawn mowers and millions of other items, giving the economy a jump-start.
While tax cuts may have spurred additional consumer spending — personal income and expenditures have both risen in the last six months — there are many other factors that have contributed as well. The massive increase in government spending caused by the administration pumping billions into homeland security programs and the Pentagon has resulted in government being one of the fastest expanding sectors of the economy through the first three months of this year. Also sometimes overlooked is the role of Federal Reserve Chairman Alan Greenspan. Greenspan sets the rate at which the Fed lends funds to banks. The less Greenspan charges the banks, the less banks charge for student loans or loans to build a factory.
The Democrats, meanwhile, say today's recovery is a result of their economic stewardship during the '90s. "Under Bill Clinton, we created 23 million new jobs, lifted 7 million Americans out of poverty, and sent millions more Americans to college," Kerry said during a speech earlier this month.
But economists point to two other key factors that kept America's economic pot boiling: low interest rates and increased worker productivity. The Clinton administration and Bush's tax cuts can't be credited with having much to do with either.
So what's the moral of this sordid economic tale? If you can convince Americans that you're responsible for their success, you can win four years in the White House.