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Free Speech for George W.Let the president say what he likes about the economy.

By Michael KinsleyPosted Friday, March 23, 2001, at 3:00 AM ET

"The Economy: How Scared Should You Be?" blares Newsweek's current cover. Inside are some alarmist articles ("Weathering the Storm" … "How To Avoid a Mauling" … "That Rainy Day May Be Here Now")—plus a column attacking President Bush for irresponsibly spreading alarm about the economy. Doomy talk from the White House can become a self-fulfilling prophecy by weakening consumer confidence, Newsweek warns. Many others, in the media and among Democrats, are saying the same thing. So what about doomy talk from Newsweek?

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The end of the great boom was the big story of the year 2000, and the media missed it almost completely. Although the stock market started plummeting in March, as late as Thanksgiving the general drift of economic coverage was still that the American economy had entered a new phase of permanent prosperity, beyond the boom and bust cycles of the industrial age. That tone changed dramatically between Thanksgiving and Christmas, and since then the press has been making up for lost time in grabbing onto every bit of evidence for pessimism.

And what about consumer confidence? Good answer: Journalism's duty is to tell the truth and not to worry excessively about the consequences. But it is an odd inversion of that principle to suggest that the president has some kind of duty not to tell the same truth. Some say it's a question of emphasis: The president shouldn't lie, but he should present the facts in an uplifting manner. This is another nice example of how journalists can deplore politicians' "spin" and yet demand it at the same time. "Look, George, you're supposed to be fatuously optimistic, and we're supposed to throw cold water. Don't you know the rules?"

Criticism of George W. for poor-mouthing the economy is "gotcha" journalism and knee-jerk political opposition at their silliest. The president is damned if he does, damned if he doesn't, and damned if he does the opposite. If he were to stay silent, he would be accused of ducking the issue. If he made optimistic noises, they'd say he had his head in the sand and was callously indifferent to the pain. Do you doubt it?

It's fair enough to accuse the president (as Newsweek also does) of trying to have it both ways on the economy's prospects. If you go to this page on the White House Web site and scroll down to Table S-14, you will see that the Bush administration's own official assumptions about the economy are for real growth of 2.4 percent this year and more than 3 percent every year after that until 2011. Robust growth and no recession for the next decade. Bush needs these optimistic assumptions to generate the surpluses that finance his tax cut, just as he needs the pessimistic assumptions of his rhetoric to support the need for this same tax cut. His chief economic adviser, Larry Lindsey, calls the economic assumptions behind the surplus numbers "very conservative." If Bush believes this, then his pessimistic remarks deserve criticism, not because they are dangerous, but because they are dishonest.

There is something comical about the notion of millions of citizens making major economic decisions based on the prognostications of George W. Bush. If he weren't president, nobody would give a hoot what he thought. Does getting "elected" [sic] suddenly confer great insight and wisdom upon him? Obviously, it confers the power to act in ways that affect the economy. And the fashionable view that presidents are powerless and all the gears are controlled by the Federal Reserve Board is, at the least, a serious exaggeration. But there is no mystery about how President Bush intends to act, and it doesn't turn on his insights about the current state of the economy. Thumbs up, thumbs down, whatever: He will push for a tax cut.

Compare and contrast Alan Greenspan. He is someone whose views on the economy would be sought out even if he weren't in the government. His notoriously gnomic remarks are picked apart for hints of his current thinking. And yet, the markets usually react in the opposite direction from what they think Greenspan is saying. If he suggests that he is more optimistic than the general consensus at the moment, the markets go down. If he seems unexpectedly gloomy, they take heart.

Why? Because even Alan Greenspan's wisdom about the future isn't influential enough to seriously affect that future. What can and does affect the future is his power to act. And the nature of that power—narrowly focused, quick to exercise or reverse, nearly unilateral—makes any public comment an important clue about what he might do. So, if he is unexpectedly dour, people figure this means he is more likely than previously supposed to loosen up and reduce interest rates. If he seems optimistic, people give up hope of a little treat from Uncle Alan.

By contrast, the president's power to affect the economy is more diffuse, longer-term, hemmed in by checks and balances. It is the different nature of that power that makes a president's remarks about the economy less influential—no matter which office has more power and which officeholder has more wisdom. So let the president speak. It can't do any harm.

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Michael Kinsley is a columnist for the Washington Post and the founding editor of Slate.

COMMENTS

Reader Comments From The Fray:

[Notes from the Fray Editor: There are many good threads on this topic (among a lot of posts about Another Matter--and may we recommend Pressbox?): as always, look for the checkmarks and stars.]

In a way you have a point inasmuch as Bush is so patently clueless and equally unable to formulate a coherent sentence much less a coherent policy that what he says hardly matters. The thing that is nervewracking and disorienting about this whole situation is that since December 12th the entire U.S. government has been tottering on what amounts to a court decreed administration and, despite the best efforts of the national media to avoid that central topic and help the American populace "get over it", it colors the day to day feelings and decisions of everyone no matter how conscious they are.

Personally when I see someone propose giving a tax cut to the top 1% of the population starting five years from now as a "jump start" for an ailing economy I think twice before making an investment or even more basically spending money on anything besides the barest necessities. (eg I've noticed inside myself a real resistance to spending anything since it's obvious that either the powers that be do not have any idea of what they're doing or they're patently lying to us about it--either way you're left with very little confidence) and Alan Greenspan, after his flip flop on the tax cut issue between December and January, has no more credibility than a magic eight ball: in fact a magic eight ball has the advantage of not being able to be interpreted as partisan or affected by whoever is in the White House.

So we're left with an amazing paradox in that the very qualities that make what comes out of this administration and George W. Bush meaningless are the same qualities that drive down the confidence and trust in competent or decent management that make the current gloomy pronouncements self fulfilling. Welcome to the brave new world

--Geoffrey De Wan

(To reply, click here.)

Kinsley's analytic error is, as we've seen before many times, to equate Wall Street with Main Street. Sure the Fed has a lot of power and what Greenspan says matters--to the financial markets. Sure the president faces checks and balances when it comes to impacting the economy--but he has the bully pulpit. Wall Street might ignore him but Main Street pays a lot of attention. I wonder how may "joe sixpack" types out there could name the chairman of the Federal Reserve? Consumer confidence and investor confidence are different animals.

Bush has been a hypocrite on the economy from day 1. He laments the failing economy to justify his stimulus-oriented tax cut then turns and projects enormous deficit-defying growth. It might be partisan to suggest that his lamentations had much to do with the down turn, but the first rule of economic governance should be like that of medicine: "do no harm" I'm not convinced he followed it.

--Pitchfork

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One can absorb certain distressing truths about the Easter Bunny and the Tooth Fairy, but what you're suggesting about Uncle Alan's lack of influence is not to be condoned. Some things are sacred. And why hasn't anyone appealed to that nice Robert Rubin who displayed such dazzling footwork during the Asian troubles a couple summers back?

--Ellie C

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