Key debates: Candidates for Senate, state auditor at press meeting

I'm looking forward to attending the Missouri Press Association's annual convention this weekend at the Lake of the Ozarks. I particularly want to hear the debate between the U.S. Senate candidates, incumbent Jim Talent and State Auditor Claire McCaskill.

This is one of the pivotal races in this country, not only to represent Missouri, but possibly to determine majority control of the U.S. Senate.

Both are experienced elected officials (Talent has far more national legislative experience), so I don't expect any gaffes, although the media and bloggers of today often see gaffes where they aren't.

I'll report on this later. Also debating are the state auditor candidates, Democrat Susan Montee and Republican Sandra Thomas.

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I highly recommend two new books which recently have hit book stores.

1. Local author and columnist David Limbaugh's book titled "Bankrupt."

Cape Girardeau's Barnes & Noble has tentatively scheduled a book signing in its new store Oct. 24. The book is currently on sale.

This heavily footnoted book reviews and explores liberal myths and contradictory remarks of many in the media and political arena. I think Limbaugh's fairness in many of the quoted comments will surprise and enlighten you.

2. "The Shadow Party" by David Horowitz and Richard Poe (also heavily footnoted) suggests how "George Soros and 1960s radicals seized control of the Democratic Party." I've been intrigued with Soros for more than 20 years but never took the time to better understand his contradictory actions from "open society support of developing countries ... to his money manipulations," his open "hatred" of President Bush and his upfront and behind-the-scenes funding of campaign-finance reform and bloggers DailyKos.com and MoveOn.org.

This book is a must read for anyone interested in being informed about elections in this country and retaining our independence from a one-world government.

Soros is not dumb, and he has been spending millions and controlling billions to reach his agenda, which will shock most of you.

I recommend this book for conservatives, liberals, Democrats, Republicans and Libertarians.

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Five years after 9-11, it's the economy stupid: The terrorists of 9-11 had bigger plans than just killing people and blowing up buildings. They hoped that the attacks would send shock waves through the American financial system and severely harm the U.S. economy. In December 2001, Osama bin Laden said that the attacks had "shaken the throne of America and hit hard the American economy at its heart and its core." Roughly two weeks after 9-11, a Bloomberg survey found 22 out of 30 economists predicting a recession. Many feared that the direct and indirect costs of security would reduce profits and productivity, consumer spending would slow sharply, deflationary pressures could worsen, and fearful businesses would lower investment, boost inventories and think more local and less global.

But someone forgot to turn out the lights. According to the National Bureau of Economic Research, the recession officially ended in November 2001, just 50 days after 9-11. Retail sales, excluding autos, were higher in October 2001 than they were in August. Real GDP expanded at an annualized rate of 1.6 percent in the fourth quarter of 2001, and since then has grown at an annual real rate of 3.2 percent roughly equal to the 50-year average.

What a great story: The vibrant U.S. economy takes a tremendous blow and not only remains standing, but rebounds almost immediately.

By taking the battle to the enemy in Afghanistan (in 2002) and Iraq (in early 2003), and beefing up security here at home, the Bush administration reduced the perceived risks from terrorism. CBS news polls show that the percentage of Americans who think it is "very likely" that there will be another terrorist attack in the U.S. Within the next few months has fallen from 53 percent in October 2001 to roughly 27 percent in early 2003 to 17 percent today. With no U.S. Attacks in five years, and many successful intelligence operations against terror cells, perceived risks continue to fall.

Moreover, in May 2003, scheduled cuts in marginal tax rates were accelerated, while capital gains and dividend tax rates were cut sharply.

These tax cuts immediately lowered the cost of capital and raised after-tax rewards. This caused a shift in the risk-reward ratio, and business investment turned on a dime. Real business fixed investment has now climbed for 13 consecutive quarters, at an annual rate of 7 percent. While some say it is immoral to cut taxes and at the same time fight a war, it was these two actions working together that finally turned the entire U.S. economy around.

Many assumed that 9-11 would slow globalization, but the opposite happened. Both imports and exports had fallen in the year before the attacks, but turned around in its aftermath. U. S. imports and exports have both grown over 12 percent in the past year and global trade is a larger share of U.S. GDP than at anytime in at least 135 years. Productivity growth and rising corporate profits act like shock absorbers, allowing the economy to grow rapidly despite higher costs for security.

In the end, it was not the attacks, but the reaction to them that has defined the economy for the past five years. Monetary policy has a very limited ability to fix problems that are not directly related to liquidity, and often causes more problems that it cures. Much more important is for the government to get out of the way, keep tax rates low, and use our armed forces and intelligence capabilities to protect America. A capitalist economy, as long as it is kept free, is the ultimate hardened target.

-- Excerpts from a column by Brian S. Wesbury, chief economist for 1st Trust Advisors in Lisle, Ill., in The Wall Street Journal.

Gary Rust is chairman of Rust Communications.