KINDER'S COMMENTARY: ECONOMIC TRENDS ARE CLINTON WARNING

Is Bill Clinton a lead-pipe cinch for re-election in November? Judged against history, economic numbers increasingly show profound vulnerability plaguing the incumbent's efforts to win another term.

Bruce Steinberg, senior economist at Merrill Lynch, forecasts that gross domestic product will rise a measly 2 percent, at best, this year. "Consumers are tapped out," he says. During 1995's fourth quarter, consumer spending rose by $193 billion over the same period in 1994, but 63 percent of the increase was financed by installment credit. Steinberg also forecasts the economy to create only 1.5 million new jobs this year, as against 3.5 million in 1994.

Ed Yardeni is blunter and grimmer still. "The U.S. is already in a recession," declares Yardeni, chief economist at Deutsche Morgan Grenfell, "even though we haven't had two straight quarters of [declining] gross domestic product." The classic definition of recession is an economy contracting for two successive quarters. Yardeni predicts that GDP will shrink at a 1.5 percent annual rate during the first half of 1996. One of the signals leading him to this conclusion is that the Commodity Research Bureau's price index of raw materials fell 6 percent for the 12 months through January.

Moreover, the Sedona, Ariz.-based Blue Chip Economic Indicator consensus of key forecasters suggests that real per-capita disposable income will grow only 1.3 percent in the four quarters before the election. This key number is the one to focus on, even more than the overall GDP growth numbers more often cited. Focusing on this number's ghastly state in the fall of 1991, the late, great economic writer Warren Brooks flatly declared President George Bush to be unelectable, 13 months out from his November 1992 defeat and 100 days before the emergence of Ross Perot. At the time the irreplaceable Brooks made his grim forecast of the president's prospects, Bush was still flying high in the polls, and most Democratic heavyweights had demurred, having judged defeating the victor of Desert Storm a fool's errand.

No matter who has it exactly right, economic numbers being churned out signal a grim environment for a president seeking a second term, and it is these indicators that are causing a quiet panic among the political hands at 1600 Pennsylvania Avenue. For the astute political operatives working there are well aware of a telling fact: Since 1952, every time economic growth has fallen below the long-term trend, a 2.1 percent annual growth rate, the incumbent party has lost the White House.

The growth rate for the last quarter of 1995 came in at a dismal, barely discernible rate of 0.9 percent. An economy groaning under the burden of Bill Clinton's higher taxes (and, in Missouri, Mel Carnahan's) has reached the limits of growth at precisely the worst time for an incumbent party in the White House. Ask Jimmy Carter about 1980. Or study Richard Nixon, 1960.

If a dramatic economic resurgence doesn't start soon, President Clinton's goose will be cooked months before Nov. 5. All it should take is for a confident Sen. Bob Dole to adopt much of the tax-cutting, pro-growth platform and forward-looking optimism of Steve Forbes, to pick as his running mate a mainstream conservative with a glittering record such as Michigan Gov. John Engler, and to take the battle to an American electorate that has been voting conservative since 1968. Game, set and match to a confident, aggressive, unmistakably Reaganite GOP by oh, 40 states or so.

~Peter Kinder is the associate publisher of the Southeast Missourian and a state senator from Cape Girardeau.