November 9, 2003

Economy is Rebounding, Critics are Floundering

There was good news or bad news last week-- depending on your political persuasion and employment status.

The Labor Department released third quarter figures on business productivity that look pretty good – considering the lingering recession that has dogged us for three years.

Democrat candidates are glum. “It’s the economy etc.”

Productivity is up 8.1 percent – the fastest pace since the first quarter of 2002.

New applications for jobless benefits fell by 43,000 to 348,000 – the lowest level since Jan. 2001.

The employment report due this week is expected to show that the economy added 126,000 jobs in October.

This sets the unemployment rate at 6 percent – .2 percent less than the running average since President Truman invented the marker 53 years ago.

George W’s “little bitty” short-term tax cut has stopped economic hemorrhaging. But an obstreperous Democrat caucus has stoppered the rebound by threatening to repeal cuts scheduled for the future.

Politicians of all stripes seem to believe that taxpayers are cash cows that can be milked until the bucket runs over. What this country needs are more farmers in Congress who know what “dry sack” means.

There are storm signals flying.

Productivity has rebounded largely by automation of repetitive-work operations and by out-sourcing of components to third-world countries. Jobs lost by this “globalization” are gone from the U.S. forever.

The race between “challenge and response” focuses our ability to “learn and adapt.” As Herbert George Wells, British sociologist, once observed: “Human history becomes more and more a race between education and catastrophe.”

American workers, the free market economy and a top- flight education system are best adapted to prevail. But the going will not be easy.

Some speed bumps are being erected by blind tinkering with work habits (pay more for less work) and liberal arts teaching (do your own thing while Uncle Sam guarantees benefits).

Consider just one hurdle bolstered by minimum-wage laws.

The federal government in 1997 mandated a minimum wage of $5.15 an hour – despite tons of warnings by economists that the law of supply and demand would deflate money, inflate prices and stimulate the flight of jobs overseas.

Certainly, a dollar today will not buy as much as it did 20 years ago, or even last year. Within easy memory are times when a loaf of bread cost 10 cents. Or a family automobile cost $1,000. Or a first-class stamp cost 3 cents (2 cents for local delivery).

Now comes San Francisco where 60 percent of the voters last week mandated a minimum wage of $8.50 an hour. Labor-intensive businesses there are running for the exits.

Santa Fe, New Mexico, started city mandates three years ago with the $8.50 bonanza. Washington, D.C. -- home of the indigent and compassion -- has locked in a minimum wage of $1 more than whatever the federal government decrees.

A dozen states have upped the federal ante to $6.75. Louisiana, trying to stop job flight, prohibits its cities from setting individual minimum wage restrictions.

All of the above is shaking up national politics.

Liberal Democrats are trying desperately to hold onto its organized labor constituency -- mostly teachers and public employees – by stroking egg-head professors and ethnic minorities.

Voters have come to sense that the old Franklin Delano Roosevelt formula of “tax and tax, spend and spend, elect and elect” is self-defeating in the long run.

In last week’s elections, real-world Republicans won governorships in Kentucky and Mississippi. The Republican candidate in Louisiana’s Nov. 15 runoff election leads in opinion polls. Arnold Schwarzenegger, took the governorship of California easily in its recall election.

At present, Republicans hold 28 governorships, Democrats have 21.

Three, prominent Democrat senators – including our own Bob Graham – are retiring. Georgia Sen. Zell Miller withdrew with a scathing indictment of his party has lost contact with the electorate.

Republican challengers for vacated Democrat seats are ahead in opinion polls.

Abraham Lincoln, the first Republican president, figured it out: “You may fool all the people some of the time; you can even fool some people all the time; but you can’t fool all the people all the time.”

PARTING SHOTS

Defense Secretary Donald Rumsfeld won’t name the political affiliation of Iraq War critics. He simply says: “We’re not ready to pin a tail on the donkey.”

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The disgruntled client of a Los Angeles lawyer fired six shots at him outside the courthouse but only inflicted a superficial wound. Well, it’s a start.

Lindsey Williams is a Sun columnist who can be contacted at linwms@lindseywilliams.org