WASHINGTON, July 24 (UPI) -- George W. Bush spent like a Democrat to keep the recessionary wolf from the door to prevent the political fate of his father. Now he has a busted budget, a plunging Dow and an overseas investor crisis of confidence and he looks likely to have only a failed single term in office to show for it anyway.
Make no mistake about it, even if the looming "nice little war" with Iraq goes off as casualty free, as quickly and as smoothly as Afghanistan did -- or, rather, appeared to; and even if the Bush administration can prevent al Qaida, or anyone else, pulling off another mega-terrorist attack as devastating as Sept. 11 before November 2004; this president still has to lick the economic crisis by then or he is licked himself.
Up to now, the president has worn the high poll ratings confirmed by his apparent success and steadfastness in the War on Terror like a Teflon suit of armor, even as economic fundamentals have groaned and plunged all around him.
We repeatedly have predicted in UPI Analysis that in the short term this would work -- but only as long as the plunging Dow Jones index did not translate into significant new inflation or into soaring unemployment figures.
On Labor Day, 2001, Bush gave a speech widely interpreted in the mainstream press as seeking to woo America's workers, including organized labor, in preparation for the election campaigns of 2002 and 2004. "People are hurting today, I know they are hurting," the president told the United Brotherhood of Carpenters and Joiners.
Well, if he thought they were hurting then, how does he think they feel now?
The backlash may well come not just from workers as such, but from Bush's own contemporaries: those 40-to-60-something middle-class poor boobs in their scores of millions who really believed they were going to enjoy a cushy retirement on their 401(k)s courtesy of an ever-upward-and-inward stock market.
Now the reality is starting to sink in, slowly -- for pampered Baby Boomers never have looked at the red line of their accounts, either personal or national, with much concern -- that there is about as much gas left in those 401k accounts as there was in the airship Hindenberg after it went down in flames over Lakehurst, N.J.
The plunging Dow is below 8,000 and unlikely to climb above it again any time soon. We here make the prediction in UPI Analysis it will never see 8,000 again while George W. Bush is president of the United States.
More than 20 percent has tumbled off the value of the Dow in the last 11 months. This past Friday and Monday alone, it crashed 625 points in two days of trading to close Monday at 7785, its lowest level in almost four years, since October 1998. And it is still going down.
This is an infinitely worse economic plight than the president's father, President George H.W. Bush, felt during the relatively mild and brief recession of 1991-92. Yet as the current president saw then, it was that recession that denied his father the prospect of a second term in the White House.
George W. Bush was a key but not dominating figure in the 1992 re-election campaign of his father. What he saw and experienced then to this day comprises his shaping experience in national politics.
Bush Sr., the 41st president, was a foreign-policy master who was woefully out of his depth on domestic issues. The son was determined to make himself a master of domestic issues and pay little, if any, attention to foreign affairs.
It seemed an eminently achievable goal. After all, the father never had won election beyond the level of congressman in his own right before winning the presidency on Ronald Reagan's coattails in 1988. The son, before becoming president, had established himself as the triumphant twice-elected governor of Texas, the second-largest state in the Union, judged by both area and population.
The father had said, "Read my lips! No new taxes!" and then he proceeded to make a fiscally responsible but politically disastrous deal with the Democrats then controlling both houses of Congress to boost taxes and pay down the national deficit. The son went one better than the father and pledged, not just no new taxes, but a whopping $1.6 trillion tax cut over 10 years. And within his first six months in the White House, he pushed $1.35 trillion of those cuts through, even though most economists warned they were as fiscally irresponsible as his father's tax boost had been responsible.
Most of all, the father went down to humiliating defeat after steering the nation through the enormous risks of the collapse of communism, the disintegration of the Soviet Union, the reunification of Germany as a stable Western democracy and strong U.S.-ally, and even the liberation of Kuwait. But in November 1992, none of this counted against the recession that had swept the land.
Therefore the son took office determined not to hang tough through the recession as both his father and Reagan had before him, but to prevent it happening in the first place. That was what made the current problems so infinitely worse than they could and should have been.
Bush in his first months in office before Sept. 11 pushed through more than half a dozen cuts in Federal Reserve Board interest rates. Along with his great tax cut, these were supposed to boost investor and consumer confidence and prevent that dread apparition of recession that had politically toppled his father rising from its murky grave.
And if things went wrong anyway, Bush knew his father was thought to be out of touch with the ordinary American and oblivious to the pain and fear they felt through that recession spring and summer of 1992. Therefore he would wear his heart on his sleeve and show that he, like Reagan, really did care about the ordinary working Joe -- and Jill.
Three days before Labor Day, as Americans prepared for their last long weekend of last summer, presidential Press Spokesman Ari Fleischer gave the White House press corps their steering directions in covering the upcoming presidential speeches. Bush was going to "focus like a laser beam" on the economy, he said.
Revealingly, that line was taken, not from the 1992 campaign of Bush's beloved father, but from that of the feared and loathed ogre who defeated him, President Bill Clinton.
But in being so obsessed with reversing his father's statements, strategy and policies on the economy, Bush appears blind to the very different conditions and challenges that he faces eight years later.
There was indeed a recession under his father and that recession did indeed play a central role in his defeat. That recession was much milder than the appalling financial collapse of confidence now facing the son. But the father had the misfortune of facing it at the end of his first -- and only -- presidential term, rather than early on, as did Warren Harding in 1921, Franklin Roosevelt in 1937 and Reagan in 1981-82.
Harding's successor Calvin Coolidge, FDR and Reagan all found that by the time the next presidential elections rolled around, booming prosperity had buried the memory of the past pain and they were triumphantly swept back into the White House.
Back last August, we predicted in UPI Analysis, "If Bush kept interest rates high, the dollar strong and basic investor confidence high, then he could ride through a tough recession over the next year and preside over a rebounding economy to sweep home in 2004.
"But to do that, he has to keep domestic and -- even more important -- international investor confidence high in his fiscal stewardship. And so far his combination of sweeping tax cuts coupled with a failure of resolve to boost interest rates, defend the dollar and meet a recession head-on as Reagan did has failed to do that.
"Also, Bush fails to realize that his expressions of concern for the working American will cut no ice for him whatsoever if he fails to maintain essential conditions of business confidence."
We stand by those words now, 11 months after they were written.
It was not too late for Bush to change course last Labor Day. It was not too late for him to take principled, determined strong action -- as Harding and Reagan showed they could do -- to keep the economy on track after the terrible terrorist attacks of Sept. 11 last year.
But now the wolf of mega-economic crisis is not baying outside the door, it has leaped within the house of American business and is joyfully gobbling up all it can find.
Last August, we also concluded, that if the president "can craft policies that ensure prosperous growth and the confidence it will continue in 2004, then his chances for re-election are as good as Reagan's in 1984 and Clinton's in 1996.
"But if Bush bungles the economy, or is swept aside by forces he cannot anticipate or control, then all his painstaking efforts to learn from his father's defeat and to steal the rhetorical devices of Bill Clinton will do him no good at all. He will then go down to an ignominious defeat far worse than his father's."
Bush, of course, did not change direction. Nor was there ever the slightest real likelihood that he or his top economic advisers, as rigid in their mindsets and blindly complacent as he was himself, would ever do so.
Now Bush's prospects of winning re-election in 2004 must be rated as negligible. For the American economy now teeters on the brink of its worst crisis since the Great Depression and both Wall Street and international investors have made devastatingly clear that they have lost all trust and confidence in every reassurance that the president has uttered.
They have already made clear this devastating verdict over the past week. When the full import of the consequences strikes the American people, they can be expected to do likewise at their polling booths.
