Well, maybe-just maybe-not. A couple of fundamental changes may have occurred in social attitudes toward the economy in the United States and other Western democracies that might give Bush a shot at squeaking back in. For one thing, voters have clearly reduced their expectations of the benefits that the economy can deliver. Also, many voters may have discovered that, in a modern middleclass welfare state, a cleaner environment and rising amounts of social security (a projected $300 billion and $800 billion respectively in 1993) are now part of their own personal incomes–a fact that may offset the hurt caused by stagnant takehome pay. This argument may seem far-fetched, especially in view of the discontent expressed in NEWSWEEK’S Poll this week and in other polls earlier this summer. But most European countries have suffered similar sieges of slowing growth, with stagnant or declining family cash incomes, over the last decade. Germany hardly grew at all through much of the ’80s. With few exceptions, the European leaders involved have accepted the slower growth, and have concentrated all their policies instead on controlling inflation and preserving their core middle-class welfare benefits. This is basically what Bush has done. Almost all the major governments in Europe that pursued these policies won re-election.
The “age of diminished expectations,” as economist Paul Krugman has called it, is real. Economic growth all over the developed world has slowed since the early 1970s-real U.S. wages and salaries, after taxes and inflation, have declined slightly for workers ever since 1973. That decline is not George Bush’s fault alone, and most voters seem to have made a grudging peace with this-strike activity in the United States is near an all-time postwar low. Congress, too, has stood by quietly while Greenspan at the Federal Reserve chokes back real growth in hopes of reducing inflation rates, which are already the lowest in many years.
If voters’ ideas about their personal incomes are changing, that would also help Bush. For three decades Americans supported the steady expansion of government to provide cleaner air and water, and bigger social-security and welfare payments, as well as health care for themselves, the poor (Medicaid) and the elderly (Medicare). Expansion of these “fringe” benefits, in fact, has swallowed up the entire 2 percent annual increase in output that the United States has managed to post in the go-slow years since 1973.
The results of such “transfer” expenditures are clear. Cleaner air and water enhance the quality of life. The massive increases in cash income and health care for the poor and elderly, together with the cleanup, have helped stretch American life expectancy by an astounding five whole years since 1970. These real-life benefits do not get counted as U.S. economic “output” at all. Americans could view the heavy transfers that they are funding as being “all in the family”–providing mom, dad, grandma or grandpa with financial aid, Medicare for doctor and hospital bills and Medicaid for the nursing home-money that working-age families would otherwise directly have to provide themselves. If this perception is so, then the indirect “income” enjoyed within most extended families is in fact growing. And that growth is not just abstract: thanks in part to these transfers, personal disposable income in the United States in the 12 months before last July (the latest figures available) has actually increased by 2.1 percent. In other words, the majority of middle- and upper-class American families could–or should–still answer the key presidential question in Bush’s favor: yes, in many ways, we actually are a little better off now than we were four years ago.
NEWSWEEK POLL
Is the country better or worse off because of Bush’s economic policies? 69% Worse Compared with four years ago: 58% Air and water quality hasn’t improved 66% Don’t have better medical benefits and insurance coverage 57% Elderly family members don’t have more social-security and pension income NEWSWEEK Poll, Sept. 10-11, 1992
