“Ladies and gentlemen: The state of our economy is strong,” President Bush told a Wall Street audience today in his second speech this week devoted to shoring up Americans’ disapproval with the economy.
In an interview last night, Bush was asked why only 41 percent of Americans approve of his handling of the economy. ABC News’ Betsy Stark said, “Can that be summed up in one word? Can that be summed up as Iraq?” Bush responded, “I think so, yeah,” adding, “We’re in a time of war, and war’s unsettling. War’s negative.”
Stark asked Bush why 67 percent of Americans believe he doesn’t understand the problems of average people. Bush said, “I think it’s ’cause of the war again, and I think people are feeling pretty down about, kind of, things ’cause of the war.”
Americans have plenty of reasons beyond Iraq to be frustrated with the economy and worried about their quality of life. From American Progress’ new State of the Economy report.
– Job growth is the weakest on record. Job growth during the current business cycle, beginning in March 2001, has averaged an annualized 0.5 percent per month, the lowest of any business cycle since the Great Depression. In fact, this is less than a quarter of the average of all prior business cycles since World War II.
– Sharp spike in costs for necessities. From March 2001 through June 2006, prices for the five largest consumption items–medical care, housing, food, household operation, and cars–grew more than twice as fast as they did for the smallest five consumption items. At the same time, college costs continue to soar.
– Wage gains have been minimal. Real wages have barely moved during the recovery or since the period when the economy stopped losing jobs in August 2003. Between March 2001 and December 2006, real hourly wages grew at an average annualized rate of 0.5 percent, and real weekly wages grew at an average an nualized rate of 0.4 percent.
– Families spent all of their disposable income and then some. For the first time since the Great Depression, the personal saving rate became negative in 2005. In the third quarter of 2006, the saving rate was -1.2 percent, the sixth quarter in a row with a negative saving rate.