Maybe We Just Got Incredibly Lucky

If only we knew who the genius was. If only we could guess what school of economics, what bolt of policy lightning, stands validated and vindicated by the extraordinary chain of good fortune that has brought the American economy as close to a state of sustained nirvana as has been experienced since World War II.

The longest period of economic expansion in more than a generation shows few signs of enfeeblement and has brought unemployment rates down to levels thought unattainable as recently as two years ago. The stock market roars with confidence and pays its capital-gains taxes with a shrug. And recent days have seen confirmation that the federal deficit and inflation - the twin monsters that have both driven and paralyzed American politics for more than 20 years - have receded almost miraculously to unthreatening levels.

The budget deficit continues to decline faster than official forecasts had predicted, leading some economists to speculate that it could simply wither away or become insignificant even as Congress and the president dither about how to balance the budget by 2002. Wholesale prices have declined for six consecutive months, a disinflationary trend unequaled in 50 years of official record keeping, and consumer prices are rising at an imperceptible annual rate of 1.4 percent.

All this has taken place under a divided government in which Republicans in Congress, a Democrat in the White House and an inflation-obsessed Federal Reserve have hardly presented the nation with a unified, coherent economic policy. President Clinton can claim a measure of credit for the tax increases in 1993, the subsequent decline in the deficit and the lower interest rates that followed. The North American Free Trade Agreement and liberalization of world trade gave a push in the right direction by establishing a more competitive climate in which price increases are harder to make stick.

Fed Chairman Alan Greenspan could be claiming to have covered himself with glory and prescience but for the fact that he never once predicted the dramatic slowdown in inflation and in fact has been lecturing us tediously on the folly of presuming that inflation was under control. Technology and its impact on growth and costs has had a major effect. But nothing stands out as the enabling act of the confluence of economic good news.

The Republican revolution in Congress - to the extent that it has yet to deliver term limits, a capital-gains tax cut, a balanced-budget amendment, prayer in the schools or tort reform - can hardly claim we are witnessing the economic flowering of its program. Its goals of abolishing the Departments of Commerce, Education and Energy, of emasculating the Food and Drug Administration, of castrating the Environmental Protection Agency, are as yet unmet. Having Newt Gingrich second in line to the presidency is surely something the stock market endures rather than celebrates.

And it surely wasn’t welfare reform, immigrant bashing or the death of affirmative action (still works in progress) that have turned America around.

Good lord, do you suppose it was all dumb luck?

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