Eight years after "voodoo economics" was first discovered in the jungles of darkest Pittsburgh by George Bush, the quip that refuses to die still stalks Washington, terrorizing economists and threatening unsuspecting voters.
The phrase itself haunts Bush, who first used it to denounce President Reagan's supply side economics, the fiscal fantasy that claimed cutting taxes would shoot so much life into the economy that government revenues would grow. A string of triple-digit budget deficits has buried that theory and proved that Bush was embarrassingly correct.
But the spectre of those deficits has failed to put genuine fear of God into Republican economic policymakers, who continue to cook up a mumbo gumbo that could leave us all in the soup.
For starters there's the voodoo priestess that economics writers have taken to calling Rosy Scenario.
According to Rosy -- who delivered her message in a visitation to Bush's economic advisers -- the economy is going to grow so vigorously that it will be possible to balance the budget without raising taxes. The premise for that prediction is that interest rates soon will head for subterranean levels, dropping below 5 1/2 percent, their lowest level in 20 years.
Bush believes in Rosy, and Michael Dukakis shows signs that he'd like to believe, but the Federal Reserve Board has not seen the light. Chanting the hymns of orthodox economics, Fed Chairman Alan Greenspan has just boosted rates by half a point -- to roughly twice the level Rosy predicts -- and vows he'll do it again if necessary to fight inflation.
Greenspan's actions have yet to exorcise Rosy. Nor have they scared off a sister theory that could be called, for lack of a better pun, the Yellow Rosy of Texas Scenario.
This voodoo dame appeared miraculously last week when ABC-TV business reporter Stephen Aug asked members of the Federal Home Loan Bank Board how higher interest rates would affect the bankrupt savings and loans of Texas. Oh, said chairman M. Danny Wall, higher rates could be good for them.
Before the shocked multitude of reporters could so much as murmur in disbelief at the idea that higher rates could be good for anyone who's billions of dollars in debt, board member Lawrence White explained: Interest rates are going up in response to inflation, and inflation could mean higher real estate prices, so if the price of Texas real estate goes up, that will be good for the savings and loans.
That syllogism is straightforward enough, but there's one hitch. There's no sign that inflation is having any affect at all on Texas real estate prices. Overheated demand may be pushing up prices for a lot of things, but Texas real estate isn't one of them. In Houston there's so much vacant office space that at the rate the economy is recovering, it'll take 16 years to create enough new jobs to fill it up.
That's the way it is with voodoo -- it's all perfectly logical once you believe. And the savings and loan regulators ought to know; they're responsible for creating what are known in their business as "zombies" -- savings associations that ought to be dead but are being kept alive because the government can't afford to bury them.
Another kind of zombie figures in the latest exercise in voodoo economics: George Bush's promise that if elected president he will create 30 million new jobs in the next eight years. Before Bush had even finished his acceptence speech, economists began to stick pins in that doll.
There are between 6 million and 7 million people in the United States today who are unemployed and looking for work. The U.S. labor force -- the number of adults able to work -- is projected to grow by 12 million to 18 million people by 1996, including some 800,000 immigrants a year. So if all the immigrants and all the people passing puberty get jobs and the unemployment rate drops to zero, we'll have 5 million to 6 million more jobs than people to fill them.
Economists are not, by profession, funny people, but they're tickled by the prospects of Bush's promise. We could pay people to immigrate, they suggest. We could follow the example of Australia and take convicts from other countries. (Hello, Fidel, got any prisoners left at Mariel?) We could raise the retirement age to 70 or 80 or encourage kids to drop out of school and go to work. Or we could all start moonlighting, taking second and third jobs; then we'd earn so much and pay so much in taxes that maybe we could balance the budget without a tax increase.
But the best way to fill Bush's job-gap would be to put the zombies to work. The dead would be grateful to have something to do. After all, the Democrats in Chicago have for years succeeded in getting the dead to vote. Now Republicans can give them jobs.