Spending Freedom

The elder George Bush enjoyed the highest approval rating in history in 1991, with some polls posting a staggering 89%. Everyone, it seemed, in the public and the press, was convinced that he would enjoy another four years in office without even leaving the White House to campaign.

By July, 1992, his approval rating was at 32%--the lowest in history at the time. What caused the free-fall? More than any other factor, a poor economic situation doomed his presidency and provided an opportunistic underdog (Bill Clinton) with the chance he needed to become the nation's 42nd president.

This trend is evident throughout our nation's history, and has become even more pronounced as economic indicators have become increasingly available with nearly up-to-the-second accuracy via today's world wide media. The perception is that our politicians--especially the President--have a huge impact on our economy.

But is this true? Do the President and the United States Congress really have control of our economy?

While laws and policy will always have some effect on the economy, the root of success in America is ingenuity. Intellectual property becomes increasingly valuable as a nation approaches her industrial capacity. At this point in our economic history, the United States has bested the greatest challenges of production and can now turn almost any good idea into a profitable business.

This is not to say that industry and production are no longer relevant. Market prices for essential resources will always impact business. Oil, gas, timber, steel, beef, produce...all of these remain essential components of a healthy economy. When prices for these resources fluctuate, the economy will react. And, while the government can help moderate these fluctuations, it cannot control OPEC, the emerald ash borer, overseas steel production, mad cow disease, and insect infestation. These are real economic makers and breakers, and they have little to do with the President and Congress.

It can be truly said that the chairperson of the Federal Reserve Board has a greater impact on our current economy than the President or Congress. If Clinton was such an economic genius, as many propose, why did we experience a recession in 1998? If Bush is such an economic dolt, as many suggest, why has he overseen rapid economic growth?

The worst aspect of the perceived relationship between incumbents and economy is the negative effect it has on long-term growth. Because the relationship between the unemployment rate and elections is so strong, incumbents implement policies that are focused on short-term growth to try to boost the economy right before elections. This sacrifices long-term growth and has a damaging overall effect on natural supply and demand.

We are wasting our time and money--and our freedom--when we vote for our pocketbooks.