In U.S. vote, economy still counts
By CNN's Mallika Kapur
LONDON, England (CNN) -- Who says the U.S. election is not about the economy this time?
During the 1992 campaign, Bill Clinton's political adviser James Carville attempted to focus the election with a simple phase but blunt slogan: "It's the economy, stupid."
This time around, both presidential candidates have made it a hot issue -- even though the war in Iraq has drawn much of the attention and polarized many of voters.
George W. Bush, the Republican incumbent, has declared the American economy is better off in a world that trades freely and fairly.
His Democratic opponent, John Kerry, put it this way: "You know President Bush says he's got a plan to fix the economy? Carole King wrote a song that sums up my feelings about that -- 'It's too late baby'."
But John Llewelyn, of Lehman Brothers, believes it is "never too late to do what needs to be done with an economy."
"What's interesting is that neither candidate has talked about one of the two big problems the economy faces, which is a structural public sector budget deficit," he said.
A surplus of more than $200 billion when the Bush administration took over is now a record deficit of more than $400 billion.
The budget gap has become one of the hallmarks of the administration, although officials argue the economy started going bad before they took office.
Both Bush and Kerry say they will cut the deficit in half in five years, but economists are skeptical.
"I think Senator Kerry will recognize the perils of protectionism, of its impact on global trade if he wins. I think he will shy away from that," said Stephen Roach, of Morgan Stanley.
There have been other trade issues too -- notably a transatlantic one between Airbus and Boeing.
The U.S. moved first, filing a complaint with the World Trade Organization about European aid for Airbus, Boeing's top rival.
So which candidate is Boeing supporting?
Harry Stonecipher, president and chief executive of Boeing, said: "I never talk about my personal politics but I can tell you they tend to run along the lines of, we support those who support us.
"In terms of our business, my experience has been, no matter who the president is, when they take that oath of office, they understand they are responsible for the safety, security and economic well being of the American people."
Whoever wins the election, the one issue economists want to see the president tackle first is that massive budget deficit, before the market -- or a slide in the dollar -- forces him to do so.
