Coming out of their meeting with George W. Bush today, the president's top three money men were asked why, if the economy is bubbling along as well as the White House says it is, more Americans don't give the president credit for it.
They tried ... and tried ... and tried to answer.
Treasury Secretary Henry Paulson: "That's, I think, the $64,000 question. And as I've thought about it, I think a big part of it relates to the fact that many Americans aren't feeling the benefit, because they are clearly better off as a result of a strong economic growth and job creation. They're much better off than they would be if the economy were growing slower or weren't growing. But many of the Americans aren't feeling it in terms of their own economic situation. Part of this is a result of energy costs, healthcare, and so that's -- as I said, that's part of it.
"I would be optimistic that if we can keep the job creation, keep making new jobs and productivity levels high, that you're going to see wage growth follow this. And we've seen some encouraging signs if you look over the last couple quarters. And that's part of it.
"And then there's the other question which really -- or the other part of this, which I think relates to a trend that's been going on now for 20 years at least, which really has more to do with the integration of the U.S. into the global economy and technology, and that's that, clearly, we're seeing a trend that the greatest rewards are going to those who have the skills to really adapt to the opportunities in the economy. And so that's a trend. The answer to that is clearly education and training. But I think one thing we all feel pretty strongly about, that whatever the issues are we're dealing, we're dealing with -- it's easier to deal with them with a strong growing economy that's creating new jobs."
Council of Economic Advisors chairman Edward Lazear: "May I just add a point to Secretary Paulson? The other thing I would say is that if we look at the behavior rather than the responses to polls, the behavior is consistent with a strong economy. We see consumption being high. In fact, the saving rate is negative right now. We see people entering the labor market at very high levels. Labor force participation was up last month primarily because jobs are available and because wages are growing; business investment is strong; investment in non-commercial real estate is strong.
"So all of the indicators are that the behavior does not reflect the kind of language that we're seeing in the polls."
Office of Management and Budget director Rob Portman: "I would also add, not as the budget director, but as someone who has looked at some of these polls, that, in fact, people do believe their personal situation is better. In fact, if you look at the recent ABC/Washington Post poll last week -- I think it was reported this week -- it shows that about 60 percent of people think that their situation is good or very good.
"And yet, with regard to the economy, you are correct. There is less confidence in the economy. That's a disconnect, and that disconnect can be explained partly by what I think Secretary Paulson was explaining. But partly it is we probably haven't done as good a job communicating the strength of our economy because people are doing well."
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