THE NATION : JOBS : Predicting the Expected Blurs Economic Policy

If a candidate pledged to get America moving again by having the sun rise each morning and set each night, we’d laugh him out of town. But as claims by President Bill Clinton and Jack Kemp show, the inevitable often poses as the miraculous when it comes to economics--where pretty promises and media blind spots conspire to leave us duped.

In his 1992 campaign, Clinton pledged to create 8 million jobs over four years. In his State of the Union address, the president proudly reported he’d produced 7.8 million already--putting him well on the way to besting the goal. Put aside the fact that presidents don’t “create” jobs, and stipulate that Clinton’s figures are great news for the millions now working who weren’t before. The truth is, 8 million new jobs over four years isn’t that big an achievement for the U.S. economy.

In the two decades before Clinton’s term, the economy created more than 35 million jobs--nearly 1.8 million each year. In four-year intervals that saw recoveries from recession, that average was topped; from 1982 to 1986, for example, 10 million new jobs were added. During President Jimmy Carter’s tenure, hardly remembered as a boom time, there were 8.3 million new jobs. Presiding over a recession, poor George Bush created few.

In deciding on the 8-million job pledge, the Clinton campaign team could have vowed to give us Carter’s rate of job growth, or Richard M. Nixon’s, or Gerald R. Ford’s. The way they chose the goal was not much different. They took the projected annual increase in the size of the labor force and layered on the lowered rates of unemployment you’d expect in a normal economic recovery. Presto! Eight million jobs.

To be sure, avoiding policy mistakes that would stop the economy from reaching its usual rates of job growth is an accomplishment of sorts. (Bush can tell you about the consequences otherwise.) And compared with Europe’s dismal job performance, chugging along at our normal pace is good news for the United States. But it’s hardly cause for the bragging rights the administration claims as its due.

Of course, lowering the economic bar in order to step over it is a bipartisan addiction. Take Kemp, renowned GOP “optimist.” As he stumps the nation to proselytize the flat tax, Kemp’s biggest selling point is that it will give us an economy that “doubles in size” over the next decade or so.

Sounds great, except for one thing: On current expected growth rates, the economy is already slated to double in size, from $7 trillion to $14 trillion (as measured by gross domestic product), in 14 years. That’s nothing new. It doubled in size from 1960 to 1970. From 1970 to 1980, because of inflation, it jumped 168%. Then, in the 1980s, that darn economy went and doubled in size again.

Why? As you may have noticed with your mutual fund, the magic of compound interest means anything that grows 7% annually in nominal terms doubles in 10 years. For an economy, 3% “real” growth with 4% inflation does the trick. To be sure, staying on track for this doubling would be good news--though it’s unclear how a big tax cut for Steve Forbes and a big tax increase for his maid would help.

Why do politicians of all stripes peddle this nonsense? Because they can.

Major government decisions are influenced to a remarkable degree by how they will play in the press. There’s nothing wrong with this in itself. It’s only rational for our leaders to worry about how to communicate their goals and achievements in an era when interest groups spend millions to caricature major initiatives--as happened with both Clinton’s health care plan and the GOP’s Medicare reform.

But problems are compounded by one of the most debilitating hazards in public life today: Many politicians come to believe the “talking points.” they spout again and again. Ronald Reagan believed he was cutting spending all through a quadrupling of the U.S. debt. The press, however, doesn’t have this excuse. Yet members of the fourth estate who fancy themselves “tough” too often act as stenographers to power--transmitting the official flimflam without scrutiny. Nowhere is this truer than in complicated areas like economics.

The cure is obvious: If the media pounced on such charades when first proffered, the politicians would stop. Can you imagine a campaign speech where Clinton takes credit for creating as many new jobs as Carter? Or where Forbes says his flat tax will help the economy to grow at the same rate it has grown for decades?

It’s not that we’re short of numeric goals worth fighting for. But there’s a perverse “Gresham’s Law” at work in political rhetoric, where silly but nice-sounding promises drive out room for goals that would mean something--such as reducing the number of Americans with no health insurance; or raising wages stagnant in real terms for two decades.

Remember: He who defines the measure of success sets the terms for public judgment. And that job, as the saying goes, is too important to be left to the politicians. The upside is huge. After all, if even half the policy nonsense spewed today were exposed, we’d eliminate fully 50% of it within a decade. And that’s a promise.