Election-year parallels with 1960 go off course on pocketbook issues
IT won't be long before the parallels between 1988 and 1960 get shopworn. But while the ``1988-is-1960'' theme is still hot off the Michael Dukakis-for-president press releases, it's worth looking at the parallels on economic issues. Americans, after all, are said to vote for a president largely based on how full their pocketbooks feel. The similarities are intriguing. In a July 1960 column, Nate White, who was the Monitor's business editor at the time, warned: ``Extensive overseas investments in the United States economy require extreme responsibility and awareness on the part of the political party in control of the White House, the Treasury, and, indirectly, the Federal Reserve.''Skip to next paragraph
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Sounds a bit like the worry about high Japanese investment in the US today, doesn't it?
``Purchases of Americans of products from other nations,'' Mr. White also noted, ``have unquestionably transferred large sums of gold to the gold accounts of other nations.
``United States business firms have not done too well at pushing their consumer products overseas. ... And in all too many instances overseas countries have not been as generous in admitting United States products (without penalizing tariffs) as has the United States in admitting overseas products.''
That, too, has a familiar ring.
But there are big differences between the two election years. Though 1960 dawned with business leaders optimistic about the economy, conditions turned to recession and growing unemployment. Some 6.8 percent of the labor force was out of work by the end of the year.
Industrial production and the gross national product were slipping. The balance of payments was in the red by $3 billion. Personal income held up until late in the year, but housing construction slowed and the stock market was sliding. Americans were saving more (8.2 percent of personal income), but that was partly because of sluggish economic conditions.
So the run-up to the 1960 election between the Massachusetts-Texas team and the incumbent vice-president going for No. 1 happened against a backdrop of growing economic discomfort. Although Richard Nixon said he intended simply to keep inflation in check, John Kennedy promised to change policies and boost economic growth dramatically.
As the race to November 1988 begins, the US economy looks fairly strong. Unemployment, at 5.3 percent, is at the lowest level in 14 years. The gross national product is growing strongly. Industrial production is healthy. The stock market has recovered since last year's plunge.
The boom could slow, as Fed chairman Alan Greenspan hinted this week. Interest rates are rising, and drought is causing big worries in the Midwest. Most Americans still feel prosperous, but they are concerned, among other things, about competitiveness, debt, and the stability of financial markets. Their pocketbooks might be full, but they know that it wouldn't take long to empty them in bad times, especially with savings levels as low as they are (3.7 percent of personal income).
Going into the campaign, the Dukakis team is careful not to talk about radical change, and George Bush promises continued prosperity.
But there's no good reason why 1988 and 1960 go together, any more than 1988 and 1968 or '76 or '80 do. Intangibles - leadership quality, trade and budget deficits, concern about America's place in the world - could be most on voters' minds when they close the curtains behind them in November.