Mournful Day at the DNC (because economy surges)

The sounds of weeping and paper shredding were deafening on Thursday morning at 430 S. Capitol St. in Washington D.C., home of the Democratic National Committee. At 8:30am Eastern, the Commerce Department announced that the U.S. Gross Domestic Product surged by an annualized rate of 7.2% in the third quarter. It was the largest quarterly increase in GDP since the first quarter of 1984.

As the news broke, tears were undoubtedly streaming down the cheeks of DNC Chairman Terry McAuliffe, while McAuliffe and other prominent democratic politicians and advisors shredded the pages of their economic playbook. For democrats, October 30 may be the day the issue of the economy fell into a coma and if the October employment report is relatively strong (scheduled for release on November 7), then next Friday may be the day the issue died politically.

Simply put, the GDP report was nothing short of spectacular. Consumer spending rose at a strong 6.6% rate. Business spending, which has been disappointing over the past few years, jumped a whopping 11.1%. The report also indicated that the housing market remained robust. Residential project investments grew by 20.4%, the largest increase in seven years. More encouraging was the fact that growth in government spending was roughly flat, indicating that the American people and businesses were largely responsible for the strong growth, not the federal government.

Most economists and Wall Street commentators cited such factors as improving labor conditions, increased consumer spending power due to tax cuts, and historically low interest rates for the swelling of economic growth. For those of us who keep a keen eye on the economy, the report wasn’t a complete surprise. After all, over the past several weeks we have seen news of growing consumer confidence, renewed strength in the manufacturing sector, and reports of virtually carefree consumer spending.

Despite the recent plethora of encouraging economic data, listening to the democrats and most of the media one would think that the sky is falling. Democrats have continued to paint a picture of economic disparity and unprecedented joblessness. Yet the lines remains long at retail stores, home buying is at record levels, and holiday spending, which can be especially indicative of apathetic consumers, is expected to rise by more than 5% this year. These are certainly not symptoms of economic sluggishness. It’s true that unemployment is a little high, but any second year economics student knows that employment is a lagging indicator of economic growth.

Yesterday’s third quarter GDP report, though it will be slightly revised over the next several weeks to reflect more precise data, is politically critical, as it will result in the following:

Shifts presidential campaign’s focus towards the war: Barring any unforeseen plunge in labor conditions, the issue of the economy is essentially off the table. Expect to hear less and less from democrats on the economy. The fourth quarter GDP report will not be released in time to affect either the Iowa or New Hampshire primaries. The third quarter report is all the democrats have to work with, and there are few areas to criticize. With the economy eliminated, the campaign’s major issue will then be the war.

Hillary rumors will fade: The report essentially guarantees that Hillary Clinton will not make an 11th hour bid for the White House. Mrs. Clinton could have potentially had an edge over Bush in the campaign economically by using her husband’s record if the economy had remained sluggish. She would still have the issue of healthcare, but with the recent prescription drug legislation and the overall lack of interest, the issue of healthcare would also be dead.

Advantage to democrats who voted for Bush tax cuts: They were few, but with the strong third quarter GDP figure, democrats who backed the Bush tax cuts will look favorable in the eyes of the voters. Democratic Sens. John Breaux (LA) and Blanche Lincoln (AR) have increased their odds of victory next year. At the presidential level, economically moderate candidates such as Senator Joe Liebermann stand to benefit. Howard Dean, who has championed the repeal of virtually all Bush tax cuts, will have much to explain.

Corporate and mutual fund scandals will become a bigger issue: While a weak economy and struggling financial markets would have been ideal for the democrats, expect to see the Left artificially inflate the issue of corporate scandals (i.e. Tyco’s former CEO Dennis Kozlowski) and mutual fund improprieties in the coming weeks.

It is truly sad, when the only thing a party has to offer, is hope that things go poorly for the country and the American people.

It is becoming painfully obvious, that the Democrats have nothing positive to offer. All they do, is hope for the worst, but they have no solutions. Now that, thank God and President Bush, the economy is turning aroudn and things are improving in Iraq, the Dems have no platform.

The tax cuts and the low interest rates have taken effect. Taxpayers, and especially homeowners with low, refinanced mortgages, now have a whole lot more money to spend. This is not a short-term phenomenom - - the positive effects on the economy will last for years. Most people in this country are better off now than they were five years ago.

The next step involves oil prices.

Look for a significant drop in oil prices over the next 6 months to finish the job of boosting the US economy like a rocket. Bush can and will make it happen - - timing is everything. The economy should be roaring about a year from now. And with it, new private-sector job creation is inevitable.

The single most important thing that George W. Bush understands is that "the economy, stupid" will either reelect or unelect him. He has known this from the beginning - - his Dad's defeat by Clinton left its mark on the Bush family. Nothing like that will happen again. Count on it.

McAuliffe's new plan for the dems.

Just repeat after me: "Worst economy since the great depression. Worst economy since the great depression." Now say it a few hundred thousand times more. Is it true? What is truth? Heck, what is is? It wasn't true in 1992, it wasn't true in 2002. Why should it matter that it isn't true in 2004?

Now, find some people unemployed from the last American chop stick factory to shut down. Have they cry on stage until they pass out from dehydration. Then blame their dehydration on the Bush tax cuts.

Remember, you only have to get 40% of the people to vote for the dems. The posthumous-American voter turnout will provide the rest of the votes. As a last resort, we have some Ba'athists to show the Florida vote counters how to really torture each ballot until it confesses vote for the Democrat, unlike 2000's half-hearted effort.

The single most important thing that George W. Bush understands is that "the economy, stupid" will either reelect or unelect him. He has known this from the beginning - - his Dad's defeat by Clinton left its mark on the Bush family. Nothing like that will happen again. Count on it.

Every since President Bush entered the White House, the Democrats (and some on this forum) have underestimated him.

The Democrats have not changed their playbook in forty years, is it so hard to belive that the President and his advisors have not worked out plans on what to do under certain situations?

Everyone seems worried by Hillary. I don't, beause the President has shown he is looking at the long term, which means he and his advisors have figured a way to neutralize her. I have no idea what it is, and will be just as surprised as anyone else.

This next campaign should remind us of what the Duke Wellington's said of the Battle of Waterloo and the charge of Napoleon's Imperial Guard at the crisis of the battle: "They came on in the same old way, and we killed them in the same old way!"

If you keep doing the same thing, sooner or later the other side will work out a way to defeat you. The Democrats do not seem to understand that the world as they knew it has changed, but the real beauty of this is that they have set up their own defeat when they configured the primaries in such a way a moderate can not win.

We may be seeing that most rare of events, the demise of a polictical party. It has happened before when the party no longer represented a large enough group to get elected, and was unable to change.

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