Via WaPo: Economic Worries Aren’t Resonating on Hill

Inflation and interest rates are rising, stock values have plunged, a tank of gas induces sticker shock, and for nearly a year, wages have failed to keep up with the cost of living.

Yet in Washington, the political class has been consumed with the death of a brain-damaged woman in Florida, the ethics of the House majority leader, and the fate of the Senate filibuster.

The disconnect between pocketbook concerns of ordinary Americans and the preoccupations of their politicians has helped send President Bush’s approval ratings on the economy down, while breeding discontent with Congress. The problem has yet to grow into a political wave that could sweep significant numbers of lawmakers from power next year, but both parties face risks if they fail to pivot their attention to economic issues.

Of course, aside from stories on gas prices, it has really only been this week that all of a sudden we are getting stories on the dire state of the economy–so I would argue that the press has similarly been “disconnected.” Sure, there have been individual stories on this indicator or that, but the “theme” of the economy only started to emerge as the stock market faltered this week and reports on inflation began to emerge.

It would seem to me that the single most significant issue at hand is oil prices, and unless Congress can pass a law that stops China and India from buying all the oil they are currently consuming, then I am not certain what can be done in the short term to solve the problem at hand.

The story cites the following:

Few economists would say the nation is at risk of slipping back into recession, but most believe the United States is back in a “soft patch.” Inflation jumped 0.6 percent in March, the Labor Department said yesterday, the biggest price surge in five months. The 115-point plunge that followed the inflation announcement brought the Dow Jones Industrial Average to its lowest level of the year, 842 points below the height it reached in late December, when Wall Street rallied after Bush’s reelection. An average gallon of unleaded gasoline cost $2.22 yesterday, 27 cents higher than election week.

Perhaps most important, wages are not keeping up with prices. Adjusted for inflation, average weekly earnings fell by 0.3 percent from February to March, the Labor Department reported yesterday. Inflation-adjusted hourly wages last month were a half-percent lower than a year ago. Real weekly earnings have not risen in four years.

Nonetheless, the odds are good that some will start dire predictions (indeed, I noted one yesterday) and certainly, as usual, as we approach electoral cycles, the opposition party will highlight the negative (as is their right) which will, in turn, lead to worse poll numbers on the economy–since what is being said about the economy is often more important that what is actually going in it when it comes to public perception (and even, sometimes, economic behavior).

The interesting thing about the WaPo piece is that the analysis amounts to 1) a list of economic indicators, and 2) curiosity as to why no one is talking about it.

Indeed, there is this quote:

“People feel vulnerable and besieged,” said Lawrence Mishel, president of the labor-oriented Economic Policy Institute, “and they don’t hear anybody talking about it.”

This strikes me as very interesting, and likely a delineator of ideological perspective, because if I have a problem, and Congress is talking about it, I really don’t take any solace from that fact. Talk is, as they say, cheap. Now, if I have a problem that Congress can solve and it acts, cool for Congress, cool for me. Yet, I am at a loss as to what Congress is supposed to do at the moment–so their lack of talk bothers me not. Indeed, I suspect that once they do start talking about the topic, they will start to annoy me.

In terms of the electoral cycle, I suspect that the thing that will annoy me the most is that if the economy does become an issue (and I think it will) then the Democrats will be in the same position that they were in 2024–needing economic failure to aid their electoral goals. Not only will that be bad for the Democratic Party (they desperately need to get to the point that they offer a positive alternative to the GOP), but it will mean relentless (to the point of cartoonish) negativity on the part of the Democratic Party (and some in the MSM) vis-a-vis the economy. Further, such a strategy tends to enhance the view that the government actualyl controls the economy, which it does not.