In democratic politics, things change more slowly. Because President Bush’s first term was judged by the electorate to have been a geopolitical disaster in the Middle East, the Democratic rivals to Bush’s Republican party captured control of both chambers of Congress – a slim Senate majority, a larger House of Representatives majority, along with considerable repudiation of Bush policies by some in his own party.

Any who expected the new Democratic victors to initiate immediate drastic changes have had to learn the facts of life about how democracies operate. Yes, eventually the Democrats will achieve their promised raise in the minimum wage. But that will be almost a non-event. A few low-skilled jobs will become a bit better paid. So low will still be the new elevated minimum wage, relative to actual wage rates now paid, little good and little harm will be the only result.

Main Street Americans are so discouraged about the Iraq war and its endless daily casualties of US soldiers, all other political conflicts – including the economic ones – become overshadowed. Realists are resigned to the fact that if 21,000 additional young Americans get put into harm’s way, it will still be the case that civil war and terrorist chaos will continue in Iraq when we do pull out of there. Vietnam taught Americans the same hard lesson: Give up on hopeless ventures.

Thoughtful questioners ask present-day economics pundits: When the US stops spending trillions of budget deficits on Iraq-like wars, will the American economic locomotive be slowed down to a walk? Will there follow a 2007-08 US recession? If so, will it be big enough to lead to global macro slumps?

Nothing about the future can be 100 percent certain. But weighing all the different statistical evidence, I have to agree with the consensus view that 2007 will continue to be a moderately growing period for US gross domestic product and for employment. Why? First because our central bank, the Federal Reserve, has the powers and the savvy to lean strongly against any deflationary winds that might develop. Concretely, this means that Chairman Ben Bernanke and his confederates can stimulate credit and spending by cutting interest rates more than half-a-dozen times.

My words will not placate die-hard Wall Street Bush supporters who labor under the illusion – the delusion – that it has been this president’s rash giveaway tax reductions to those already affluent that brought about recovery from the 2002 recession following from Wall Street’s pricked 1997-2000 speculative bubble.

These ideologues forget that the important accelerations in total factor productivity of today’s America took place under the higher tax structure of the Clinton-Rubin era. Was this a one-time exception? No. The history books record how fast post-war America did grow under Roosevelt-Truman-Kennedy-Johnson. New times call for new wisdom. Centrist Democrats in concert with centrist Republicans can work out better policies than we had in the Gilded Age of the 1890s when Rockefeller monopolists in oil and Carnegie monopolists in steel controlled prices uncompetitively.

It was not wisdom when President Bush appointed Harvey Pitt to head the Securities and Exchange Commission — a man who announced in his first speech, “I am going to run a gentler and kinder SEC.” Having been law counselor to the four or five big accounting firms whose peccadilloes were to burgeon on his watch, his message was not: Pursue more efficiency if you wish for higher rewards. What his listeners heard was, “Reach out for new tax loopholes, You won’t be crucified for doing so.” Ironically, Enron, Arthur Andersen Accountants and WorldCom miscreants, whose feet were to be held to the first by Elliot-Spitzer-type prosecutors, might complain that they had been set up in a ‘sting game’ by Washington.

Under Reagan-Bush-Bush regimens, inequality between the wage of the CEO and median corporate workers has exploded from 40-to-1 to 400-to-1. Has that raised or lowered incentives to step up genuine economic growth?

My answer is that it has bribed top executives and the directors boards they dominate into the go-for-the-quick misrepresentation of corporate earnings. And to go for feasible stock options that present corporate shareowners with heads-insiders-win/tails-shareowners-lose.

Alas, somewhere some economists can be found to bless these corporate misgovernances. I am sure that if the late Milton Friedman had been asked to pronounce on the merits of ignoring option awards as a corporate cost in certifying operating earnings, that conservative libertarians would have avowed; Professor Hotelling at Columbia taught me that options do add to CEO pay by an objective present-discounted-value formula.

Each day in office, President Herbert Hoover made votes for Franklin Roosevelt, his successor. George Bush operates in the same Hoover mold.

As cynics say: History doesn’t repeat itself. But it does rhyme.

© 2007 Paul Samuelson, distributed by Tribune Media Services, inc.