Bush Facing Tough Sell on the Economy

As President Bush heads for the Midwest today to trumpet his economic program, his first stop, in Kansas City, Mo., illustrates the trouble that he faces with the election year’s approach. The metropolitan area has been walloped by the loss of nearly 10,000 high-paying telecom jobs and -- in a recovery that’s so far jobless -- there is little relief in sight.

Bush will tout the growth-spurring tonic of tax cuts and call for Congress to cut back stifling regulations and pass his national energy plan, according to aides. And he’s likely to repeat his proposal to appoint a new assistant Commerce secretary to help preserve some of the nation’s quickly disappearing manufacturing jobs.

The idea of a “manufacturing czar” has been much derided since Bush first floated it -- including by some of those invited to hear him speak today.

“What’s a Republican president doing making noises about industrial policy?” fumed Peter J. Eaton, a University of Missouri-Kansas City economist and director of the school’s Economic Information Center who said he was asked to attend the presidential event, but will be unable to make it.

“If you’re going to accept that where the free market is headed is a good thing -- as every good Republican should -- proposing a manufacturing czar is silly,” Eaton said.

But aides are counting on the idea to showcase Bush’s concern for working people while they wait for the real centerpiece of the administration’s economic plan -- tax cuts -- to begin having an impact.

In essence, the president and his advisors believe that they have taken all the substantive steps that are needed to rev up the economy and plan no major new initiatives, say aides and observers.

What’s left is the delicate political task of conveying that Bush has economic matters well in hand and so deserves a second term. Hence his intense travel schedule to states such as Pennsylvania, Michigan, Ohio, Florida and Missouri that were closely contested in the 2000 presidential campaign and could prove crucial to his reelection in 2004.

Bush was in Missouri only nine days ago to address the American Legion convention in St. Louis. He carried the state by a 50%-47% margin in 2000, although the congressional district in which he is to appear today voted heavily for Democrat Al Gore.

The administration chose Kansas City, a former rail hub and meatpacking center, as a venue for presidential politicking because it’s “a symbol of the energy of our economy, a place that’s had a lot of changes from the days of rails and stockyards, and a place of growing optimism,” according to White House deputy communications director Suzy DeFrancis.

Some of that optimism shows through in interviews with people such as Kelly Wilson, a single mother from suburban Prairie Village, Kan., who lost her $61,000-a-year marketing manager’s job in late 2001 and feared for a time that she might lose her house as well. But Wilson, 40, said Wednesday that she landed a similar job only months after being laid off and has suffered no serious financial reverse.

“Things have worked out very, very well for me,” Wilson said. “I was lucky to be in the first wave of layoffs.”

But matters have not turned out quite so swimmingly for others or for the region as a whole.

Since the economy peaked in mid-2000, the Kansas City metropolitan area, an eight-county region including both Kansas Cities, in Missouri and Kansas, has lost 44,000 jobs. That is nearly 5% of its total workforce and a substantially greater fraction than the 2% loss for the nation as a whole, said Franklin A. Lenk, research director for the Mid-America Regional Council, the area’s planning organization.

Close to one quarter of the local losses have been in the once-hot, now-not telecommunications industry. And most of the telecom losses have been from Sprint Corp.

Sprint was until very recently Kansas City’s great hope for the future -- a company on the cutting edge of technology that was attracting the kind of subcontractors and vendors that are every regional planner’s dream. Among the ancillary benefits of Sprint’s presence: development of a 17-building, 200-acre corporate campus said to be the largest-ever construction project in the Midwest.

“No discussion of the Kansas City economy can skirt the Sprint issue,” said Craig F. Thomas, senior economist at Economy.com, a research firm.

Since mid-2000, the “Sprint issue” has meant the devastating toll the telecom bust has taken on the company, which has been forced to lay off more than one-third of its local workforce and now faces the prospect of a takeover and the likely departure of its headquarters from the area.

Analysts said that Sprint’s problems underscored how little Washington can influence the most dynamic sectors of the economy, either on the way up or down. In the case of telecom, the industry worldwide built far more equipment and facilities than it needed.

“You can’t blame the Bush administration for the over-investment in telecom,”’ said Thomas. Neither can you expect it to do much about the resulting problems, he added.

Indeed, the fact that so many of Kansas City’s job losers are highly educated, high-tech workers means that one of government’s traditional responses to economic dislocation -- retraining -- would probably prove ineffective.

“In the past,” said Lenk, the regional planner, “one of the most important roles of government was to retrain blue-collar workers so they could do something in the New Economy.” But this time around, he said, many of Kansas City’s unemployed “are the New Economy.”

In picking Kansas City for his speech, Bush is, in effect, dodging one economic problem -- the steady loss of U.S. manufacturing jobs -- that the administration might actually be able to do something about. The area has a comparatively small manufacturing sector, with only 7% of its labor force in factories compared to 20% or more in such nearby cities as Joplin, Mo.

“Kansas City is one of the few places in the Midwest where you can make an economic speech and not end up hearing about the loss of [manufacturing] jobs to low-cost producers overseas,” said Thomas.

Many observers say Bush’s proposal for a manufacturing czar is intended to make him appear decisive without actually having to make those decisions. The administration hopes that the economy will solve the problem for the White House by beginning to generate new jobs before political pressure grows for Bush to act.

In the meantime, however, the president and his political advisors will have to pick their stage sets carefully.