Economy May Work in Bush's Favor
Housing Boom, Tax Cuts Buoy Many Voters, Despite Job Losses
By Jonathan Weisman
Washington Post Staff Writer
Tuesday, February 17, 2004; Page A01
By all rights, the Wisconsin job market of the past three years could have left Greg and Mary Beardmore embittered. Greg lost his job in 2001 when his dot-com venture went bust, found new work in office-furniture sales, only to be downsized back to the unemployment lines. Employed again after 14 long months, the former sales manager from Green Bay earns half his previous salary.
With her husband struggling, Mary lost her job in June as a facilities manager at Green Bay-based retailer ShopKo Stores, and was thrown into a job market she described as "a wasteland."
Now living on an income that is 30 percent of their cash flow three years ago, the Beardmores have kept their heads above water, Mary said, refinancing their mortgage, lowering monthly payments and taking heart in the swelling equity in a home that has gained $100,000 in value since they moved in eight years ago.
"My economic circumstances are still right in the middle," she marveled. "I don't feel I'm losing ground, because I have the security of my home. If we had to sell our house to stay afloat, we'd do it very quickly. So you know, I think it's okay."
As the presidential election hits its stride, candidates seeking to unseat the president have fixated on the still-sluggish labor market, hammering their contention that as long as jobs remain scarce, voters are not about to salute the economic recovery that Bush has been hailing.
But other facets of the economy may prove far better indicators of the sense of well-being that voters will bring to the ballot box in November, economic forecasters say. The booming housing market has given even struggling workers the ability to latch onto a tangible talisman of personal progress. Wage growth has been nearly stagnant, but thanks to Bush's tax cuts, disposable income has risen. And after nine quarters of slow but steady growth, the economy as a whole is poised to take off, giving some shaky households a sense of optimism about the coming year.
"The economy is really going to help the president this time around," said Joel Prakken, an economist with Macroeconomic Advisers LLC, whose political forecasting model predicts Bush will win in a romp in November. "I'm not saying [the Democrats] can't find pockets where they can play the economy card, but it's going to be tough."
Even Mary Beardmore -- a Bush voter in 2000 and still unemployed -- said she is willing to give the president a pass.
"You know, George Bush does not control the economy that much," she said.
To be sure, this election may not revolve around individual economic well-being, even economic forecasters concede. The U.S. military is mired in Iraq. Record budget surpluses have turned into record budget deficits. The electorate is divided and polarized.
"Assuming the electoral structures of the past are going to continue into the future, Bush is almost for sure going to win," said Ray C. Fair, an economist at the Yale University School of Management who has been projecting election outcomes for decades. But, he added, "If there's any time the equation goes bonkers, it's probably times like this."
On their bread-and-butter economic issues, Democrats still believe there is plenty of uncertainty to play on in the coming campaign. And recent polls appear to bear that out, for now. A Washington Post-ABC News poll this week found that 54 percent of voters disapprove of Bush's handling of the economy, up from 47 percent a month ago. Disapproval nudges up to 57 percent when voters were asked specifically about Bush's handling of job creation. Asked who they trusted to handle the economy more, voters sided with the Democratic presidential front-runner, Sen. John F. Kerry (Mass.) over Bush, 49 percent to 41 percent. Kerry was trusted over Bush to create jobs, 51 percent to 37 percent.
Last week, the Democratic polling firm Lake Snell Perry & Associates Inc. sent clients a memo saying voter anxieties over layoffs have actually receded. But concern is rising over health care and education costs, job quality and employee benefits, and the long-term implications of job movement overseas.
"Indeed, middle-class voters express a degree of financial anxiety and pessimism that is more consistent with a recession than recovery," the memo stated.
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