Despite 5.3 percent GDP growth in the latest quarter, not to mention a historically low unemployment rate of 4.6 percent, President Bush has suffered persistently low ratings on the economy. Thomas Sowell believes he has found the blame for this, arguing that the “liberal media and intelligentsia are strenuously trying to preserve the vision of poverty and economic distress.”

But are the media and the Left indeed so influential that they can trick most Americans on the economy?

USA Today media reporter Peter Johnson wrote in 2004 that “Over the course of his campaigns and eight years in office, Ronald Reagan’s press peaked and fell but was always negative. … In his re-election bid in 1984, 91 percent of his coverage was negative.”

The above is important. Despite a rising economy and millions of new jobs, the media invariably stuck to a number of gloomy themes during the Reagan years, including the rising homeless population, twin deficits, and a generalized assumption that the supposed economic gains of the 1980s were being enjoyed only by the wealthy few. Amidst this constant negativity, Reagan was returned to office in 1984 with one of largest landslide victories in electoral history.

Back then, stocks confirmed what voters knew — that the economy was doing very well. Despite a major recession brought on by the Federal Reserve’s flirtation with quantity targets in the early 1980s, the Dow Jones Industrial Average still returned 134 percent during Reagan’s presidency. Markets and the Electoral College told the truth about an economy and presidency that the media regularly tried to cast in a negative light.

Returning to the present economic situation, the unemployment and GDP numbers are certainly impressive. Still, they are individual data points and do not necessarily tell the whole story. Think of this: Employment growth was higher during Jimmy Carter’s presidency than all the presidencies since 1974. Real estate? No less a supply-side eminence than George Gilder described the property boom during the Carter years in the following way: “What happened was that citizens speculated on their homes. … Not only did their houses tend to rise in value about 20 percent faster than the price index, but with their small equity exposure they could gain higher percentage returns than all but the most phenomenally lucky shareholders.” Sounds a bit like the 21st century real-estate market.

However, the Bush and Carter presidencies also parallel in that the dollar’s value in terms of gold fell substantially under both: 270 percent under Carter and 145 percent under Bush. GDP data are computed in both nominal and real terms, but since inflation is a highly lagging indicator, it is perhaps not so surprising that a falling dollar would drive nominal and real GDP gains in a way that would mask underlying economic weakness. Plus, one of the easiest ways to stimulate consumption and property booms is to devalue the currency.

Government statistics aside, stocks and economies loathe inflation. More importantly, voters loathe inflation, and if gold remains a reliable indicator, the present pessimism surrounding President Bush might not be so odd. The dollar has fallen substantially under Bush, and its fall arguably is the hidden story behind an uncertain stock market and an unhappy electorate.

And what if the dollar’s fall is arrested, and a dollar-strengthening trend that began in recent weeks continues? In this light, it’s easy to see how the negativity surrounding Bush’s economic policies could turn quite positive. Until then, economic pessimism should not be blamed wholeheartedly on the liberal media. Voters and markets saw through this pessimism under Reagan, and they’ll surely see through it again if the value of the money they earn strengthens, and ultimately is made stable.

– John Tamny is a writer in Washington, D.C. He can be reached at [email protected].