Archive for Sunday, January 7, 2001

Bush’s recession talk may be effort to avoid his father’s mistakes

January 7, 2001


— An irked Clinton White House accuses George W. Bush of running the risk of talking the country into a recession by poor-mouthing the state of the economy at every opportunity.

But private economists say he simply may be trying to avoid one of his father's biggest mistakes appearing indifferent as economic misery rises.

In any event, they are skeptical of the outgoing administration's claim that all the warnings of a downturn from Bush could cause one.

Economic troubles, from slumping sales to plunging stock values, were major topics during the president-elect's economic conference last week in Austin, Tex.

"A lot of folks in this room have brought some pretty bad news," Bush told reporters in summarizing his talks with business executives.

The president-elect and running mate Dick Cheney have missed few opportunities recently to voice concerns that the country could be heading into its first recession since Bush's father occupied the White House.

George W. Bush has talked repeatedly of "warning clouds on the horizon."

Cheney has been blunter, saying, "We may well be on the front edge of a recession here."

Use of the "R" word has raised the ire of the Clinton administration, which has called the comments irresponsible and a blatant attempt to build momentum behind Bush's $1.3 trillion tax cut.

"The next president and his team should not be talking down our economy and potentially hurting confidence just to gain short-term political positioning," said Gene Sperling, the president's chief economic adviser.

But many private economists think that Bush, by going public now with his concerns about the economy, will be able to avoid one of his father's biggest mistakes.

The senior Bush, heeding advisers who told him not to rattle confidence, did not even acknowledge the 1990-91 recession until January 1991, when it was almost over.

And the upturn that began in March 1991 was anemic; it was called a "jobless" recovery.

While Clinton hit constantly on the country's economic troubles during the 1992 campaign, Bush seemed detached and unconcerned.

"The lack of recognition by the Bush administration of the economy's problems was one of the key reasons Bush lost the election," said Allen Sinai, chief economist at Decision Economics in New York.

Martin Regalia, chief economist of the U.S. Chamber of Commerce, said Bush and Cheney "are not trying to talk the economy down.

"They are expressing legitimate concerns" and seeking to develop contingency plans.

Analysts dismiss the Clinton administration claim that the Bush-Cheney warnings, by rattling consumer and business confidence, could trigger a downturn.

"I don't see a danger that this becomes a self-fulfilling prophecy. They are just stating what is obvious in the economic data," said Stuart Hoffman, chief economist at PNC Financial Services Group.

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