Bush’s mythical recovery

PRESIDENT BUSH has been repeating his mantra about a sound economy for months now, despite numbers that reveal a more alarming truth. Last week’s employment report showed that only 32,000 jobs were created in July, stunningly short of forecasts that predicted more than 200,000 new jobs.

Other indicators also undercut the White House’s rosy spin. Overall economic growth slumped to a 0.3 annual rate in the second quarter, down from 4.5 percent in this year’s first quarter. Consumer spending fell 0.07 percent in June, which was the steepest decline in nearly three years.

Bush’s unyielding reliance on tax cuts have so far failed to be the magic potion for a long-term robust economy. The country is facing a record $445 billion national budget deficit and the 10-year outlook has gone from predictions of a $5 trillion surplus to a $2.7 trillion deficit. Added up, the economic indicators are all wrong for a president running on a platform of heightened prosperity.

At some point, either Bush is going to have to admit that the economy is not turning the corner or hope that there’s a sudden economic surge to justify his preachy optimism. This week, Morgan Stanley’s chief economist called the current approach the "Mythical Recovery.’’

With a skittish stock market, oil prices at a record high and job creation stalled, talk of an economic turnaround seems fanciful. The Federal Reserve bumped up a key interest rate by a quarter-point this week, declaring that the economy "appears poised to resume a stronger pace of expansion.’’ Such predictions, however, have so far fallen flat and Bush faces the prospect of being the first president since Herbert Hoover to preside over a net decline in the number of jobs as he runs for re-election.

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