So, how is the economy doing? You wouldn’t know by reading the Los Angeles Times.

Last Saturday’s edition provides readers with a rather biased view of the economy’s condition. For some reason, the story “Sluggish Job Growth Could Affect Elections,” by Molly Hennessy-Fiske, appeared in the business section rather than the editorial section.

In her first paragraph, Hennessy-Fiske clearly identified the direction she wanted to take the reader: “The U.S. economy added a disappointing 51,000 jobs last month, the government said Friday, and although hiring in July and August was revised sharply higher, lackluster employment growth is still expected to dog Republicans in upcoming midterm elections.” (Italics mine.)

Way down in paragraph ten, Hennessy-Fiske, grudgingly perhaps, reported that, “The Labor Department also revised upward by 810,000 its estimate of the number of new jobs added in the 12 months ended March, bringing that period’s monthly average up to 200,000.” Here, however, she made no comment on what those data would do to Republican hopes for re-election. She also made no mention of the more favorable household employment figures.

Some analysts see the payroll jobs number — which is tied to jobs that result from business employment — as a lagging indicator of the economy. On the other hand, the household number, which is said to be somewhat less accurate (nobody is punching time cards), reflects the growth in the entrepreneurial economy. For example, it is said that thousands of people now make their living on the Internet, yet none of these people is reflected in the payroll statistic.

Larry Kudlow, in a recent analysis for his clients, reported that the adjusted household measure indicates that 137.4 million people are working versus the 135.6 million in the payroll survey. The difference is substantial. Over the past year, according to the household survey, monthly employment growth has been over 204,000 jobs, compared with 137,000 for the payroll survey. Kudlow’s conclusion: “the economy is in better shape than headlines would have us believe.”

Republicans, are you listening?

During the 2001 recession and then again in 2003, President Bush expanded spending and cut taxes. This put the economy back on a growth track with an attendant rise in the budget deficit. Consumers and businesses rebounded from both the recession and the terrorist attacks. As a result, the private sector was responsible for most of the economic expansion in 2005, replacing the demand that was created by the monetary and fiscal stimulus. This transition provided both the federal and state governments with the fruits of increased output and increased tax revenues without the inflationary pressures that arise when the government competes with the private sector for resources.

Growth — created first by government stimulus and then by private-sector spending — has given us the ability to pay for both wars in the Middle East and the devastation of Hurricane Katrina and still experience a reduction in the anticipated budget deficit. As opposed to the liberal theory that there must be winners and losers in any change in tax policy, the evidence supports a win-win strategy that Republicans should emphasize in their desire to maintain control of Congress.

– Thomas E. Nugent is executive vice president and chief investment officer of PlanMember Advisors, Inc., and principal of Victoria Capital Management, Inc.