Bush's rocky recovery

THE NATION'S faith in him is clearly tailing off, but George W. Bush still seems pretty pleased with himself. In his weekly radio address, the president celebrated the recent growth in the economy and the decline in the deficit as vindication of his fiscal policies.

But though the economy does seem to be picking up steam, by historical standards this is hardly a robust recovery. Indeed, according to a new study by the Center on Budget and Policy Priorities, a liberal think tank with a reputation for accurate analysis, this recovery lags others of the past half-century on basic economic-growth measures ranging from employment to GDP to personal consumption to net worth to wage-and-salary income.

''This recovery is notably worse than the average in virtually every aspect one might look at with the exception of corporate profits, which are far better than average," says Richard Kogan, a senior fellow at the center and one of the authors.

Job and income growth are two of the most important ways to measure a recovery, and there, the center's finding are striking: ''Employment and wage and salary growth are especially slow in the current period, underperforming not only the historical average but, in the case of employment growth, every comparable period since World ward II."

Employment has increased by an average annual rate of only half a percent since November 2001, compared to an average of 2.6 percent from previous comparable periods, the center says. Wages and salaries have grown at a 2 percent annual rate, compared to 4.2 percent in other post-World War II recoveries.

In his radio address, the president touted last month's job-creation figures, saying: ''This past week, we learned that America added over 200,000 new jobs in July."

True enough, but here's CBPP's historical perspective. ''If the pace of job creation in July 2005 had been the same as the average pace of job creation of all other recoveries since the end of World War II, some 252,000 jobs would have been created."

Meanwhile, it's important to understand that we are spurring our recovery with a borrowing binge that lets Americans enjoy government services they aren't paying for, spending those dollars instead on consumer goods. ''We are a lot more like family taking a vacation on their credit cards than like a family borrowing to start a business," says William Gale, a senior fellow in economic studies at the Brookings Institution.

And despite the talk of an annual federal budget deficit that has shrunk to $333 billion or so, this year's fiscal imbalance is actually more than $500 billion, says Gale. That's because we are spending the surpluses from the Social Security trust fund and federal retirement programs to help plug the budget gap. That money must be paid back if we're to finance the retirement of today's workers. If one's concern is the fiscal status of the government, you have to count those obligations as well, notes Gale.

Nor is there any doubt why we have such a large deficit. Much of it is the result of the top-heavy package of tax cuts Bush pushed through Congress in 2001 and 2003.

Certainly, there was a compelling rationale for some form of economic stimulus back then.

But here's the rub: When the center compared this economic cycle to that of the early 1990s, it found that ''job growth has occurred at just one-third of the pace" of the comparable period of that recovery. (Corporate profits and net worth are the only categories in which this recovery has significantly outperformed that one.)

The more robust Clinton recovery followed not a tax cut, but a tax increase. That's not to suggest that a tax increase is an appropriate remedy during a recession (though Clinton's tax hike clearly soothed the capital markets), but rather that the Bush tax cuts were too slanted toward upper earners to be particularly effective economic medicine.

With the economy now recovering, a thoughtful national steward might agree to roll back some of those tax cuts. Instead, this president is pressing to make them permanent. There, he reminds one not of his role model, Ronald Reagan, who came to countenance several tax hikes to address a deficit he had helped create, but rather of Philip II of Spain.

Of that dilatory, isolated, and out-of-touch monarch, one historian wrote: ''No experience of the failure of his policy could shake his belief in its essential excellence."

Scot Lehigh's e-mail address is lehigh@globe.com.