|Forecasting America's Destiny ... and the World's|
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President George Bush will be standing on the end of a cliff when he gives his acceptance speech at the Republican National Convention on Thursday evening, September 2.
That's because the August jobs report will be coming out just ten hours later, at 8:30 am, Friday, September 3. And the jobs reports have been getting worse every month for four months.
If the jobs reports is bad for a fifth month, then it will overshadow anything he says on Thursday night.
That's particularly true if Bush repeats his earlier statement that "the economy has turned the corner" on recovery. That claim revives memories of the Herbert Hoover administration's reaction to the stock market crash of 1929 and the resulting massive unemployment.
President Hoover believed that the economy would recover by itself if left alone, as it had in previous recessions, and so he did little to stimulate the economy, saying that "prosperity is just around the corner." He was trounced by Franklin D. Roosevelt in the 1932 election.
In fact, the odds are pretty high that the August jobs report is going to be poor, thanks to sky-high oil prices and the Fed's interest increases this month. As an early indication, the manufacturing index for August, released last week by the Federal Reserve banks in New York and Philadelphia, surprised analysts with its weakness.
President Bush may suffer the same consequence if the August jobs report is bad. Even if it's OK, he still has to weather the September jobs report, the last one to come out before the election.
But if you look at long-term historical trends, going back to the founding of the nation, then the 2004 election should be a good one for Republicans. Let's look back at the political realignments that have occurred in each of the three major crises in American history. In each case, the political realignment was based on a compromise which was destroyed in the next crisis period.
The great compromise in the founding of the United States was that slavery was accepted as a necessary evil. This permitted the growth of an entire cotton-based economy in the South dependent on slave labor. 70 years after the founding, when Abraham Lincoln was elected President in 1860 and the Civil War began, the established interests, the southern cotton farmers, depended on that compromise. Generally speaking, the Democrats were aligned with the South, and the young Republican party repudiated the compromise and won.
The Civil War ended slavery, but there was a larger compromise: freedom. Freedom was best for everyone and every thing, including businesses, which meant laissez-faire capitalism. This allowed the growth of big businesses, and there were large, powerful entrenched business interests who were committed to an unregulated business climate. President Hoover was sympathetic to those interests, and when he said, "Prosperity is just around the corner," he really believed that the Depression would end quickly, just as previous "depressions" had done. He infuriated Americans because he refused to do anything.
In 1932, 72 years after Lincoln was elected, Roosevelt repudiated the total freedom concept, and implemented the new compromise: The regulated economy.
Today things have changed. We no longer have the laissez-faire economy we had before 1932. But today, 72 years later, many people believe we have a heavily regulated economy, with large entrenched special interests vested in some aspect of the regulated economy, and the perception (fair or not) is that the Democrats are the main supporters and beneficiaries of the regulated economy. Thus, the Republicans have a historical advantage of the Democrats in this election, just as the Democrats had a historical advantage in the 1932 election.
But President Bush's refusal to acknowledge that the economy is unexpectedly poor and something has to be done is putting this historical advantage at risk, and Kerry may beat Bush by pressing the claim that Bush is just another Herbert Hoover who naively believes that "prosperity is just around the corner."
One final note: According to historians, the greatest American Presidents are those that presided over these three great crises: George Washington, Abraham Lincoln, and Franklin Roosevelt. It's great events that make great Presidents, not vice-versa.
We appear to be entering a new period of great anxiety and danger for the country, as the War on Terror progresses. Some people are going to gag when I say this, but whoever wins the election this fall, George Bush or John Kerry, is probably going to be the next great President.