TUESDAY, JANUARY 7, 2003 — Big business is the Achilles' heel of the Bush Administration. Jonathan Chait of the New Republic recently observed that the domestic agenda drawn up by White House strategist Karl Rove is crafted by K Street lobbyists. This White House failing is evident in the new economic-stimulus plan, which rewards shareholders and leaves everybody else in the cold— a point made both by leading Democrats, Senators John Kerry and John Edwards, and by a leading Republican, Senator John McCain.

I’m certainly mindful of the Bush administration's argument that "we’re all shareholders now." They reason that providing a large swath of the middle class with tax relief on dividends will spur the moribund economy. But that's an argument that, to me, sounds good on paper but is not borne out by reality.

I’m no economic expert so I’ll keep to broad strokes. Unless you own hundreds, if not thousands, of shares of stock, receiving tax relief on dividends is not going to amount to much. The average American purchased stock one of two ways during the last five years — either through a retirement plan, where dividends are reinvested in the fund and generally untaxed, or through individual tax purchases where the main benefit to investors was the run-up in the stock price. In either case, Bush’s plan is unlikely to have much effect. For the majority of Americans whose stock holdings come through tax-free retirement plans, Bush’s plan does nothing. And for those speculators who relied on upward-surging stocks to finance big-ticket purchases, even generous dividends will do nothing. Those heady days of 1999 and 2000, when televisions from the local gym to the local diner frantically broadcast stock prices, are long gone.

That said, the plan is also politically risky. Even at his strongest, Bush has always been susceptible to economic-based criticism. Bush’s post–September 11 settlement package, which capped damage awards to those affected by the disaster, favored the airlines whose negligence was a contributing factor in the terrorist attacks. And at the height of the corporate scandals last summer, Bush opposed audit reform, as Chait points out, until it was a fait accomplit.

Right now, Bush looks strong. Notwithstanding the outcome of the probable upcoming war in Iraq, he faces risk over the economy. That’s why he is going through the motions of releasing a stimulus package right now. But if a grim winter turns into a failing spring and summer with little or no economic improvement, Bush is going to see his fortunes worsen. The anecdotal evidence I hear is that the taxi business is even farther down than it was last year and that loan defaults are up — both signs of a declining economy. Already, Senator Mary Landrieu of Louisiana won the December run-off election on economic issues; the allegation that Bush was insensitive to the plight of Louisiana sugar-growers put her over the top. Landrieu ended up winning rural parts of the state, which are socially conservative, based on her economic appeals.

People forget today, but Herbert Hoover’s original goals differed dramatically from what turned out to be his legacy. Elected in 1928, Hoover had spearheaded national and international anti-poverty efforts. His slogan was "a chicken in every pot." He was, however, also committed to the philosophy that relief should be the responsibility of the private sector. So when the Depression hit, the stylings of the Hoover administration looked bad: his cabinet included six millionaires.

It's a cautionary tale for Bush, who should watch out. With a vice-president and secretary of defense who are both multimillionaires, economic issues could bring him down. No matter how the war goes.