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Now, the economy

LAKEWOOD, Ohio -- WHAT MURDEROUS events on the ground and an invigorated John Kerry have changed about the politics of Iraq is the tense of the verbs.

Now it's the economy's turn.

What had been largely a squabble about the past -- Kerry's war votes and Bush's claims about unconventional weapons -- has slowly morphed into an argument about the present and a discussion (still faint for my taste) about the future.

Good, but this change is only half the battle. The American economy needs an airing, too -- not the tired shouting match about tax cuts for the rich and three-plus years of negative jobs results, but an examination of the economy's current condition and what can be done about it.

President Bush does not want this discussion. His campaign's knee-jerk response to economic commentary is a poll-driven jeer that critics are pessimists, running down the country's engine of prosperity.

Where the economy is concerned, what is missing and what beleaguered Democrats in this battleground state would love to hear is a clear message that the "recovery" is not worthy of the term and that Kerry has plans to put more money in ordinary Americans' pockets to spend so the country can get moving again.

Reflecting current headlines, the polls show a plurality (not a large one) of Americans feeling that war in Iraq and the threat of terrorism, taken together, are a greater concern at the moment than the economy. However, when the sizable minority for whom health insurance costs are the major issue (generally, about 15 percent) is factored in, domestic still trumps foreign in the voters' minds.

What voters here and in other swing states are getting from Kerry is a strong healthcare presentation but a weak economic one. The senator not only benefits from the ruinous status quo (soaring medical costs and limited availability of good coverage), his proposals to slash the costs for the benefit of working families have penetrated so deep that Bush has to advertise a flat-out falsehood (Kerry's promoting "big government") to even compete.

On economics, however, Kerry has opted for a more narrow message. In states like Ohio -- where manufacturing has hemorrhaged more than a quarter of a million jobs and shows no clear signs of true recovery -- he emphasizes the tax breaks companies can claim against the costs of outsourcing jobs and moving production overseas and his own proposals to reward job creation here. That's effective politics as far as it goes, which isn't very far.

The bigger, ignored issue is the anemic character of the national recovery. Ordinary Americans already know what I'm talking about because their flat wages and salaries have been overwhelmed by soaring costs (health insurance, gasoline, housing, college tuition) and higher local taxes. Tax cuts supported by both parties barely dented this burden earlier; they have now run their course, as have efforts (mirroring the federal government's profligacy) to bill the future to pay for the present like consumer debt and home mortgage refinancing. This has imperiled consumer spending, two-thirds of the economy, and produced a situation that is still glorious for Nieman Marcus but depressing for Wal-Mart.

This is not just about puny job gains nearly three years after the economy's brief downturn. It is about three straight months of a decline in the leading indicators tracked by the Conference Board (a classic warning sign); and overall economic growth that has slowed each quarter since the recovery spike a year ago and now is at an annual rate of less than 3 percent. It is about corporations whose profits have soared but are sitting on a mountain of cash that is not being invested in hiring or new production; and capital good orders that are dropping outside the military and aircraft sectors.

Kerry has a basket of ideas that translate into more money in average consumers' pockets: a higher minimum wage, slashed health insurance premiums, assistance to states and localities so the tax-increase pressures abate, serious tax credits for tuition costs, the reimportation of cheaper prescription drugs from Canada.

Kerry has yet to translate those ideas into a campaign message. As next week's pivotal first debate with Bush nears, Kerry will need to make a case for both domestic and foreign policy change. As with Iraq, a good argument about whose view of the present is accurate and whose is smoke and mirrors is a necessary way station to a debate over the future, the one voters want.

There's an old rule of thumb in presidential campaigns called MOM -- the combined picture in Michigan, Ohio, and Missouri is roughly the national picture. Going into the Florida debate, the Kerry lean of Michigan is slightly more than canceled by the Bush lean in Missouri and here. It's less like Bush I-Dukakis in 1988 and more like Gore-Bush II four years ago. Those two elections were up for grabs before the first debate, and so is this one.

Thomas Oliphant's e-mail address is 

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