Advertisement
YOU ARE HERE: LAT HomeCollections

The Nation

Better Off Than 4 Years Ago? Nation Is Divided

August 30, 2004|Warren Vieth | Times Staff Writer

WASHINGTON — Linda Caterino and Bill Ellis don't need a stack of government statistics to tell them whether the nation is better off than it was four years ago. All they need are their own eyes.

Caterino, a self-employed tax accountant in Somerville, Mass., has watched her net worth rise along with Boston-area housing prices. She sees evidence of an improving economy all around her.

Ellis, a retired auto service department manager in Falls Church, Va., has been dipping into his diminished retirement account to make ends meet. He sees a similar decline for the country as a whole.

Their divergent views did not budge last week when the Census Bureau reported that family income had flattened out last year after falling for the previous two, while the ranks of the poor and uninsured had swelled.

Just as all politics is local, perhaps most economics is personal.

"I form my view of the economy based on personal experiences," Caterino said.

What matters, Ellis observed, "is what's happening in my neighborhood, like the man next door who was out of work for almost two years.... Things aren't exactly average in everybody's neighborhood."

Since Ronald Reagan posed the question with devastating effect in his 1980 bid to unseat President Carter, it has become an economic litmus test for incumbent presidents: Are you better off than you were four years ago?

The question resonates loud as ever this year, as President Bush defends his handling of the economy against attacks by Democratic challenger Sen. John F. Kerry. Like nearly everything else about this election, the nation has perhaps never before been so divided in its response.

"It depends on where you sit," said Kim Wallace, chief political analyst at Lehman Bros. "If you've got a college degree and a job that's paying $70,000 or better, your answer almost invariably has to be yes.... Everybody doing less well than that, on both the education and economic front, is probably going to answer no."

The split is reflected in recent surveys. In an Aug. 21-24 Times poll, 28% of registered voters said they were better off financially than they were when Bush took office, 27% worse off and 43% about the same.

On the nation as a whole, their judgments were somewhat harsher: Twenty-seven percent said the country was better off because of Bush's economic policies, 45% said it was worse off and 26% about the same.

Such findings "suggest that Bush hasn't made the case very well yet that the economy is improving for most Americans, even though most people personally think they're doing OK," said Karlyn Bowman, a polling expert at the conservative American Enterprise Institute in Washington.

Luke Williams, a 54-year-old cattle trader in Greeley, Colo., hasn't voted for a Democratic presidential candidate since 1976, but he's about to switch his allegiance from Bush to Kerry in this year's election. The war in Iraq is the main reason, but Bush's economic policies and Williams' own financial situation figure into the equation.

"I don't think I'm better off," Williams said. "Everything I see costs more, and I'm not making any more, bottom line. I don't know that government's the answer, but something needs to start working better."

Analysts say that in strictly economic terms, the nation appears to be slightly less well off today than it was when Bush took office. Jared Bernstein, director of the living standards program at the liberal Economic Policy Institute in Washington, said the three-year decline in median household income made it clear that there had been more economic losers than winners since Bush took office.

Although many economic benchmarks have declined on Bush's watch, a few have moved higher. Economy.com, a consulting firm in West Chester, Pa., has charted several basic measures of the economy's performance since January 2001:

* Gross domestic product has expanded at an average annual rate of 2.5% after adjusting for inflation, one of the weakest performances during any presidential term since World War II.

* Despite the addition of 1.5 million jobs in 11 months, payroll employment remains 1.1 million below the January 2001 level. Bush stands to become the first post-Depression president to end his term with a net job loss.

* Unemployment has remained relatively low, averaging 5.5% despite the downturn. But it would have averaged 6.5% if many discouraged workers had not dropped out of the labor force. And the average duration of unemployment has been long.

* Inflation-adjusted median household income has fallen. Last week's census figures pegged the three-year decline at $1,535, with the losses concentrated in 2001 and 2002.

* Homeownership has increased steadily during Bush's presidency, thanks in large part to the lowest interest rates in 40 years. Yet mortgage foreclosures are near record highs, along with personal bankruptcies and auto repossessions.

Advertisement
Los Angeles Times Articles
|
|
|