April 8, 2005
Was John Kerry on to something?
During the campaign, he kept insisting that our economy was bad and getting worse. Unfortunately, this sort of baseless rhetoric didn't end when the campaign did.
To this day, many journalists seem only too happy to play up doom-and gloom stories. Consider some recent headlines: "Jobless rate drops, but hiring is tepid" (South Florida Sun-Sentinel, April 2). "Survey on employment disappoints economists. Job growth slow; more young people leave labor force" (Houston Chronicle, April 1). "Job growth in U.S. slows to 8-month low" (Cincinnati Enquirer, April 2).
And it's not just the news writers who are convinced the economy's in the tank. In the arts and leisure section, a recent comic shows a man in a hood holding a whip and lording over employees in cubicles. The caption: "How to tell your boss is enjoying the weak job market a little too much." The same day, Broom Hilda claimed, "Apparently, not everyone has recovered from the economic downturn."
Bombarded with stories and images like those, it's no wonder some Americans are pessimistic about our economy.
Yet the facts give us reason to be optimistic, not pessimistic. Even the "disappointing" jobs numbers mean our economy added 110,000 payroll jobs in March. And the unemployment rate dropped to 5.2 percent -- lower than it was in the late 1990s.
Just a few years ago, economists would have considered 5.2 percent to be "full employment," when virtually every employable American has a job. Yet today, we apparently expect to do even better. We want "full employment" to mean that every American has a job.
That's a laudable goal. But even if we have to "settle" for 5.2 percent unemployment, we're still light years ahead of other countries.
In France, the unemployment rate is a staggering 10.1 percent -- almost twice our rate. Not surprisingly, the government says French business confidence dropped to a 15-month low in March.
Things are even worse in Europe's largest economy. Germany's unemployment rate last month reached 12.6 percent, and the government predicts its economy will grow only about 1 percent this year. Unlike their American counterparts, the German press has reason to be concerned about their country's future. And they are. One tabloid reported the unemployment numbers under a headline begging the government to "Do Something!"
In response, the German government has slashed personal income taxes, and Chancellor Gerhard Schroeder also wants to cut corporate tax rates to spur growth. He knows those measures will work, because they're exactly the same steps President Bush took to help pull our country out of recession in 2001.
Those steps are still working today, by the way. Economists predict the American economy will grow about 3.6 percent this year, almost four times more than Germany's, and that we'll create hundreds of thousands of new jobs in the process.
Of course, even if the media got the message that our economy's doing well, there would still be plenty of pessimism out there. For example, get ready for Cover the Uninsured Week in May. National spokesman Noah Wyle -- he's not a doctor, but he plays one on TV -- will surely remind us there are more than 40 million uninsured and warn that every American is just one paycheck away from losing health coverage.
The truth is different. Yes, there's much that can and should be done to make coverage available to all Americans. But a University of Michigan study found that half of all uninsured Americans regain coverage within six months. In other words, the number of long-term uninsured is about half as large as the number we'll see reported.
"I'm an optimist," President Bush told me last month. "I can't believe some people have held this office and been pessimists. That's not the American people." Indeed it's not. Maybe that explains the results last November.
Ed Feulner is president of the Heritage Foundation.