News of the Bush Boom Buried
When the weaker-than-expected preliminary report on gross
domestic product was first published in late January, the
New York Times featured a story about it on the front page
of its Saturday morning business section. The author was
left-of-center Louis Uchitelle, a reporter who groused in
his story about soft business investment (outside of computers
and software) as well as weak export sales to foreign countries.
A month later, however, we have the revision of the GDP
report for the last three months of 2004. The new data show
a much stronger economy.
The initial estimate of 3.1 percent GDP growth for last
year’s fourth quarter was revised upward to 3.8 percent.
Business investment was revised higher to 18 percent from
14.9 percent. Included in this, the rise in non-high-tech
business investment outstripped high-tech investment (by
15.2 percent to 13.7 percent, both at annual rates) for
the first time since 1994. Private-sector domestic output
-- what Economics 101 students might remember as consumption
plus investment (or C+I) -- came in at an outsized 5.5 percent
So what did the New York Times do with this upbeat economic
story? It buried it. Rather than place the news on the front
page of the business section, the Times editors shoved it
on page B4. Instead of carrying a senior reporter’s
byline, the copy came from Reuters News Service.
At least the Reuters story accurately reported that GDP
grew by 4.4 percent in 2004, ahead of a 3 percent rise in
2003, for the strongest gain in any year since 1999. Reuters
also had the good sense to note the big gain in business
capital investment and a much stronger performance for export
I’m still wondering why the New York Times relegated
this good news to the back pages of its business section.
After all, on the Friday the report hit, the stock market
rallied smartly on word of a stronger-than-expected economy.
But really -- why should I wonder? A big economic gain
in 2004 suggests nothing less than a bona fide Bush boom.
Not only that, the boom is being propelled in considerable
part by the supply-side tax cuts that President Bush and
Congress put in place in mid-2003. Since that time the economic
recovery rate has roughly doubled. Unemployment has fallen.
Stocks have risen. Inflation remains tame. Interest rates
remain low. And family wealth is at a record high.
Let me guess: The Bush-bashing New York Times just won’t
get honest about America’s economic health and the
merits of the Bush policies that have led to such strong
economic performance. Even more, the Paul Krugman-influenced
Times refuses to concede the economic growth power of lower
marginal tax-rate incentives.
These have got to be angst-filled days over at the Times.
It’s turning out that Bush has been just as right
on the economy as he has been on the spread of freedom and
democracy in the Middle East.
The mainstream media and their allies in the conventional-thinking
punditocracy are heavily invested in President Bush’s
failure. But you have to wonder how much more Bush success
they can handle before they implode or -- even better --
change their tune. After all, on peace and prosperity, hasn’t
Bush been right?
Kudlow is a former Reagan economic advisor, a syndicated
columnist, and the co-host of CNBC's Kudlow
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