WASHINGTON — As President Bush addressed the Republican National Convention Thursday night, pushing his record on national security and tax reform, the key issue in voters’ and retailers’ minds was the economy.
Every economic indicator is campaign fodder in this highly contested election, like today’s release of August employment figures, which will show whether job growth is finally accelerating enough to meet the influx of workers entering the labor market.
Leading up to this week’s GOP convention in New York, a large swath of Americans said they were edgy about the economy, according to findings by the nonpartisan Pew Research Center. Of the 1,166 registered voters questioned in early August, 48 percent said the economy was “only fair” or “poor,” while 51 percent found it “good” or “excellent.”
At the same time, when asked, “Who can best improve the economy?” 52 percent of respondents said the Democratic candidate, Massachusetts Sen. John Kerry, would do a better job, while Bush received a 37 percent rating. A mid-August Gallup poll showed President Bush’s approval rating at 51 percent, up from 48 percent in May.
For retailers, “The overarching issue, the real bottom line, is how the economy’s performing,” said Tracy Mullin, president and chief executive officer of the National Retail Federation. “And right now, most retailers would say the economy is schizophrenic. It’s up and down and unpredictable. They have a good week, then a bad week.”
The up-and-down nature of sales was seen in last month’s comp-store figures, which had almost as many losers as gainers. [For more on comp-store sales, see page 10.]
Kerry has pushed the lack of job growth and the loss of around 2.5 million manufacturing jobs since Bush took office as a key campaign issue. His economic solutions include tax breaks for domestic manufacturers, making lower-priced government health care plans available to some 40 million uninsured and cutting middle-class taxes, while raising those for the wealthy.
The President’s economic message is upbeat and built around an “ownership society” theme, such as creating incentives to buy homes, open businesses and starting tax-free accounts to help pay for health care. Bush argues that his almost $3 trillion in tax cuts during his administration helped keep the economy from crashing after the 2001 terrorist attacks and he blames his predecessor, Bill Clinton, for creating the recession that year. Among the signs he’s doing a good job, the President touts a relatively low unemployment rate and increases in business productivity as signs of the economy being on the mend.
In his convention address Thursday night, the President described the economy as being in transition, according to prepared remarks, which also focused on fighting terrorism as part of Bush’s call “to build a more hopeful America.”
“The times in which we live and work are changing dramatically,” Bush said. “The workers of our parents’ generation typically had one job, one skill, often one company that provided health care and a pension. Today, workers change jobs, even careers, many times during their lives.
“This changed world can be a time of great opportunity for all Americans to earn a better living, support your family and have a rewarding career. Many of our most fundamental systems — the tax code, health coverage, pension plans, worker training — were created for the world of yesterday, not tomorrow,” he said, pledging to “transform these systems,” such as allowing people to invest their Social Security contributions and creating health care accounts.
The President is trying to avoid the fate of his father, who lost his reelection bid in 1992 to Democrat Clinton, who, at the time, succeeded in highlighting the country’s economic doldrums.
John Sununu, chief of staff for the first President Bush, interviewed at the convention, said he doesn’t see the economy being a make-or-break issue for the current President. However, he acknowledged some difficulty for him on the topic.
“These are tough times,” said Sununu, adding terrorism to the voter equation in addition to the mixed bag of economic performance. “He’s got to find a way for the American people to stand back” and have perspective.
Highlighting why Americans should be upbeat about the economy’s future was central to the four-day convention, a well-orchestrated event structured to boost the President’s candidacy. Even the delegate seating showed signs of strategy, like the Ohio delegation, of which Limited Brands vice president and counsel Bruce Soll was a member. Ohio is one of a few battleground states that could mean victory or defeat for the candidates and its delegation was seated front and center.
To delegate Jason Allen, a high-end men’s wear retailer from the battleground state of Michigan, the economy has been improving the last couple of years. Sales at his Travers City men’s wear store, the Captain’s Quarters, are up 3 percent over the year.
“We are seeing people coming back to clothing and an improvement in upper-end sportswear lines,” said Allen, also a state legislator.
He said Bush’s almost $3 trillion in tax cuts during his administration, including an improved depreciation schedule on new equipment and investment, have been a business boost. Allen also supports Bush’s goal of eliminating the inheritance tax, which he said would help preserve his family’s business.
However, Allen added, the store’s strategy to sell as much American-made apparel as possible has become more difficult, which he blames in part on U.S. producers not being able to compete with the Chinese. He questioned whether Bush has been tough enough in pushing China to allow its currency to float on world markets. The Chinese yuan is pegged to the dollar, which critics say allows its prices to be kept artificially low by as much as 40 percent.
Ray Carroll, owner of high-end women’s wear retailer Mills Touché in Tucson, Ariz., at the convention as a GOP supporter, said Bush has been good for business. Sales at his store are up 15 percent over the year and the average sale is around $1,000, up from $500 after the terrorist attacks.
Carroll also credits Bush’s tax policies for helping his business, tied to a rebound in tourism and increased business from local defense contractor Raytheon, producers of the Tomahawk Block 4 missile widely used in the wars in Iraq and Afghanistan. His business also has gotten a boost from shoppers from nearby northern Mexico, who’ve seen incomes increase as a result of the North American Free Trade Agreement.
However, Carroll departs from the Bush administration when it comes to Wal-Mart, the nation’s largest retailer and big GOP backer. Bush officials often tout Wal-Mart as an example of American know-how and a good business model.
“I’m not a big Wal-Mart fan,” said Carroll, who describes himself as a moderate Republican, along the lines of California Gov. Arnold Schwarzenegger. “They are hurting small business and local politicians are realizing they don’t have to roll over for them on zoning.”