McCainonomics vs. Obamanomics

Jimmy P. at the RNC— Democrats continue to rip John McCain for saying last month that he still believes "the fundamentals of our economy are strong." Of course, at the Democratic convention, speaker after speaker said the economy was on the verge of a depression. And 60 percent of the DNC delegates I polled think we are already in a depression. Yes, oil prices are too high. And there is a credit crunch. And home prices continue to sink. But the economy probably grew at close to 4 percent in the second quarter. And then there is this boffo piece of news out this morning: Business productivity was revised up sharply to 4.3 percent in the second quarter (up from the previously reported 2.2 percent). That represents "a substantial acceleration" from a solid 2.6 percent gain in the first quarter, according to Global Insight. And as economist Brian Wesbury puts it: "The productivity boom continues, keeping the economy growing at a healthy pace even as businesses trim payrolls. As a result, the long-term prospects for U.S. economic growth remain strong. Non-farm productivity is up 3.4 percent versus last year." Productivity, economists on the left and right agree, represents the single best variable for judging the intrinsic strength of an economy. If our workers are trained, our technology advanced and our business models smart, that will show up in the productivity numbers. This is really good news. What's more, high productivity and low wage inflation—the case right now—often presages higher job growth. 2009 might be a pretty good year for the economy. But McCain would be wise not to dwell on that angle in his speech tonight and instead focus on returning America to prosperity with rising incomes and high job growth.