National Economy

The Miracle Economy

To hear John Kerry tell it, America is mired today in the worst economy since the Great Depression. How dumb does he think voters are?

We just set a record for yearly production: a GDP of nearly $12 trillion, or $120,000 per family. As for what really counts, personal well-being: A record 69 percent of Americans own their own homes, and the account balance in the average 401(k) plan is $77,000, up 22 percent in three years.

On the eve of his nomination at the Republican Convention in New York, Bush can be proud of the U.S. economy and what he's done to keep it growing.

He was dealt an extremely miserable hand by his predecessor. As Bill and Hillary Clinton were leaving the White House, the tech-stock bubble was deflating, and GDP and employment growth were slowing sharply. A recession began two months later.

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So why all the gloom and doom? Three reasons….

1. In many cases, Kerry and his supporters are flat-out lying. Look up the non-partisan website of the Annenberg Center, www.FactCheck.org. It measures the claims of candidates against the truth. Here are headlines from recent studies: "Kerry Makes Bogus Comparison to Great Depression. He claims U.S. suffers greatest job loss since the 30s, which is not true." "Kerry's Dubious Economics. He says new jobs are paying $9,000 less than old ones. That's not a fact." The site also blasts the Media Fund, a pro-Kerry group that claimed in ads that Bush would help companies outsource jobs. "But Bush never said that," says FactCheck. Instead, Bush wants to create better conditions to keep jobs here.

2. The media are wildly pro-Kerry. Last week, the Census Bureau released data showing an insignificant uptick in poverty rates in the past year, plus a minuscule rise in the number of uninsured. From the hysterical TV and newspaper coverage, you would have thought another depression had begun. An actual reading of the report reveals that poverty rates "remained unchanged for Hispanics…and Blacks" and are below levels in the first Clinton term. Also, while the number of people without health insurance rose, so did the number of people with health insurance.

3. This is a time of change, and Americans are legitimately worried.

To assuage those fears, Bush wants to shift ownership and control -- of retirement funds, health insurance and other key assets -- away from businesses and government and toward individuals. That means building an "ownership society" through reform of Social Security, the tax code and the healthcare system.

I strongly agree, which is one reason I am helping to launch a new group called Investors Action, which will educate America's 93 million investors and promote their interests.

It's hard to see those interests being served by Kerrynomics. For example, Kerry wants to raise taxes, which will reduce returns for investors and increase the cost of capital for businesses, almost certainly whacking stocks. Already, as my colleague, economist Eric Engen of the American Enterprise Institute, has shown, when Kerry's prospects in the polls rise, the market falls -- and vice versa.

Maybe investors -- and investors-to-be -- aren't nearly so dumb as some candidates think they are.

To recap, the economy is growing, there are more people working now than ever before, more people own their own homes than ever before, retirement savings are up, people are earning more, and inflation is steady. How is this bad again?

Why did the Democratic Party position themselves to root for American failure?