The 'W' Boom
By JAMES J. CRAMER
Imagine the difficulty John Kerry faces in explaining what's wrong with the economy. He wants to talk about President Bush's reckless deficit spending, but how reckless can that spending be if the market's willing to lend the government money at a measly 4%, lower than when President Clinton turned deficits to surplus? He wants to portray the economy as weak and getting weaker, but how weak is an economy that finds Federal Express, Yellow Roadway and United Parcel all on the 52-week-high list?
These companies ship to meet demand, not to build inventories. Sen. Kerry would love to talk about lagging employment and jobless growth, but go tell that to Bill Zollars, Yellow Roadway's CEO, who has ratcheted up earnings forecasts three times during the alleged "soft patch" and would be making even more money if he could just find more truck drivers to hire.
Sen. Kerry would love to talk about how consumers and businesses are suffering through $45-a-barrel oil, but prices at the pump stopped going up months ago, and for other than a handful of poorly run, unhedged airlines, high oil's had remarkably little impact on any part of the economy, except the oil industry itself which is both hiring and booming. You don't debit the growth of Exxon and Chevron payrolls; their jobs pay greenbacks the same as any other. Meanwhile, we've got the veritably endless boom in housing, a two-year boom in steel, plus a brand new cyclical turn in aerospace. Boeing's stock doesn't lie; it's become a permanent fixture on the daily new-high list.
The irony isn't that Sen. Kerry can't make more hay out of this array of strength, it's that President Bush doesn't take more credit for what's going right. Hamstrung by less-than-stellar monthly hiring figures and stubborn weakness in tech and auto sectors -- among the most visible growth engines just a few years ago -- Mr. Bush seems oddly defensive about the robustness of so many other, formerly dormant sectors of the economy. He should be donning a hard hat to help produce scarce hot-rolled steel. He should be grabbing a nailgun to help Toll Brothers, Lennar, and Pulte meet the extraordinary housing demand. That's if he can brave the lines at Home Depot and Lowe's, and if they aren't sold out of Black & Decker's hot-selling power tools.
Sure, we've got some weaknesses Sen. Kerry could exploit. He could go to a Coke bottler somewhere and talk about soft drink weakness, but President Bush could counter by going to a Pepsi plant which is causing the weakness. He could swing by a Bud plant, to lament the King's recent selling weakness; but Mr. Bush could quaff some Miller Genuine Draft where sales have exploded with a new owner and a better ad campaign. Oh, and Sen. Kerry might want to don a white jacket to assemble some PCs for ailing Gateway and Hewlett-Packard, but that just might force Mr. Bush back to Texas to make a couple of market-share-stealing Dells.
The simple truth about this economy is that while nothing's ever perfect, we've got a bit of a barn-burner on our hands. Now someone ought to inform President Bush about the strength -- someone might as well take credit for the boom.
Mr. Cramer co-hosts CNBC's "Kudlow & Cramer."