Both parties looking for bump from good Missouri economy

JEFFERSON CITY, Mo. -- After a couple of years of job losses during a gloomy economy, the chief executive is now touting recent growth as he ramps up his re-election campaign.

Republican President George W. Bush?

Yes, but also Democratic Missouri Gov. Bob Holden, who although of a different party and citing different reasons, is nonetheless tying his election hopes to the same economic improvement as the president.

On Wednesday, Holden's administration released a glowing report showing a "strong economy" and "vibrant business climate" in Missouri. Both the Holden and Bush camps quickly claimed credit.

Their similar situations highlight a political paradox of the 2004 elections.

While the Republican president praises Missouri's economy, Republican gubernatorial front-runner Matt Blunt criticizes it.

And while Missouri's Democratic governor touts economic improvements, presumptive Democratic presidential nominee John Kerry highlights job losses.

"It certainly sounds ironic," said Roger Myerson, an economics professor at the University of Chicago whose specialties include economic models of voting and politics.

Bellwether state

Conventional political and economic theory holds that voters tend to re-elect incumbents when they perceive the economy is good, and opt for challengers when life seems bad. That explains why Bush and Holden -- of opposite parties -- could find their fortunes linked in this year's campaign.

Missouri is perhaps the ultimate political bellwether state. Its demographics closely match national averages, and Missouri voters have picked the winning presidential candidate all but once during the past century, when they opted for Democrat Adlai Stevenson of neighboring Illinois over Republican Dwight Eisenhower in 1956.

A strong economy in Missouri could help Bush win its 11 electoral votes -- and, perhaps, a second term in the White House.

"The fact that the economic picture is looking better in Missouri is a testament to the economic policies that the president has put forth," Bush campaign spokesman Danny Diaz said after Holden's administration released its periodic economic report with its own positive spin.

The report showed recent growth in Missouri in total jobs, per capita personal income and retail sales -- often at levels above the national average and those of neighboring states.

For example, from July through March, Missouri's seasonally adjusted employment rose 1.1 percent -- nearly double the national growth rate of 0.6 percent for that period and better than all neighboring states except Oklahoma.

"Missouri's economy is fundamentally strong," said state Economic Development director Kelvin Simmons, who was appointed to his post five months ago by Holden. "We have a strong and vibrant business climate. Jobs are being created, and economic growth is occurring."

Asked whether the president or governor deserved more of the credit, Simmons quickly picked Holden -- citing successful efforts to retain or expand specific businesses, including a Ford Motor Co. assembly plant in suburban St. Louis and a State Farm Insurance Co. office in Columbia.

Yet Holden's Revenue Department director, Carol Fischer, gave credit for improved retail sales figures to the tax cuts backed by Bush and the consumer cash generated by home mortgage refinancings. Taxable sales in Missouri grew 4 percent during the last three months of 2003 compared to the same period a year ago -- the largest quarterly increase in almost three years.

Missouri's economic report "is certainly good news for President Bush," said David Webber, a political science professor at the University of Missouri-Columbia. "There is good political science support for the notion that the economy affects people's voting for the president."

Yet there may be little factual basis to cast such votes.

Many economists believe politicians have only slight influence on the current state of the economy. That's because the economy naturally cycles through booms and busts and often reveals the full result of government policies -- such as tax cuts and economic development incentives -- only many years later.

"Everybody overestimates what these political leaders actually can do for the economy," Myerson said. "Macroeconomic performance is a very complicated process. It's not so clear what Bush has done, or could have done, in three years to either help or hurt the economy, and the governor of Missouri even less so."