Bad PR

 

The Bush economic summit failed to provide a public relations boost for the president because the event was transparent as a method to manipulate public opinion.  Even well done public relations will fail if the basic intelligence of the public is questioned.  Thus, an event with no purpose except to win PR points will ultimately bleed support rather than build support.

 

Now the official spin from the Bush Administration claims the Waco summit shows the president cares about the economy, as opposed to his father, who is alleged to have given voters the impression that he didn't care about the recession of the early 90's.  This misreading of history is dangerous.  George Herbert Walker Bush, 41st President of the United States was defeated because he didn't seem to have a well crafted plan to make the economy grow.  This is why the current situation facing George W. Bush is so important.

 

The call for permanent tax reductions is about all the president gave us yesterday.  The problem is, this won't work.  Rates can be changed with a vote of Congress and everyone knows that.  Rates change constantly.  The problem with our economy is rapidly declining networth of businesses and individuals caused by the collapse of the stock market.  The president has advanced nothing to address the crucial problem for the economy.

 

There were proposals from some attendees to make dividends tax exempt and to increase the capital loss writoffs but rather than take these ideas and run the Bush Administration continues to pound the idea the economy is strong and the problem is confidence.   Layoffs in the thousands at IBM. American Airlines, Agere, Intel and bankruptcies at U.S. Air, WorldCom, Enron, Adelphia, Global Crossing and others say the economy is weak.  Moreover, the total lack of venture capital thanks to collapsing stocks and the elimination of the initial public offering market means new, high growth companies will not be created so they will not be a source of future jobs.

 

Were George W. Bush to follow the sage advice of General U.S. Grant and "maneuver according to circumstance," he would change policy quickly to address the following markets.  The corporate crime fighting is fine but it needs to be coupled with steps to improve profits for investors.  Making dividends deductible to business is a good step as is the elimination of capital gains taxes, even if the future income tax rate reductions must be bartered away.  Income taxes assume jobs and jobs require investment capital which is leaving the U.S. markets.  The president was correct to call for quick adoption of broadband in the U.S as this will help the tech and telecom industries rebound.  But this is expensive technology and won't happen without a deep pool of capital.  The Bush Administration has been slow to name an FDA Commissioner so Biotech can become another engine of economic growth.  Thanks in part to this policy lapse the returns on biotech investment are pathetic and investment capital will be a future problem in this sector as well.

 

If an event can be so mishandled that it makes conservatives like me question the Bush economic program the White House is in trouble.  George W has made good on his promise to "restore dignity to the oval office," but he will lose if the D's can credibly claim they will restore prosperity to the nation.  When the U.S. economy is strong companies are profitable and investment capital is plentiful.  This is not the case currently and every day that goes by without a plan to make this happen is a lost day for re-election.