The President has promised the nation a program to spur the economy. Sadly, the White House does not seem to have an inkling of what that should be.

This was clear at a House Ways and Means Committee hearing last week on stimulating the economy. Administration officials milled around without focus or direction.

Bad News Made Worse

Meanwhile, the Washington press crops is using every report of weak economic news to attack the White House.

The New York Times reported, for example, that employers had "slashed their payrolls" by 241,000 in November.

Not true.

What really happened was that employers added a minuscule 8,000 jobs - far fewer than normal for the month.

What dropped by a whopping 241,000 was the seasonally adjusted total of nonfarm jobs. The plunge was the biggest since March - and much bigger than most people had expected.

The Bright Side

Even so, a halting recovery aided by easy money from the Fed has started. That process rarely reverses itself.

The government job report overstated the softness in the labor market. Since the recession ended in April, declines in the labor force and employment have been limited to teenagers. Adult employment has actually increased.

Even with the November drop, the trend in employment is sideways, not down. Since April, employers have added about 1.2 million jobs. This gain was in line with the usual April-November pattern. (Seasonally adjusted, the number of nonfarm jobs rose only 93,000.)

Furthermore, average hours worked and overtime in manufacturing increased last month. The index of total hours (a monthly proxy for the overall economy) rose at an annual rate of about 1% from August to November. Industrial output probably posted a small gain.

Democratic Noises

If the White House is fresh out of good ideas, Democrats are hardly in better shape. They seem to want to emulate the Louisiana Kingfish, the late Gov. Huey Long, who bought votes with a "middle-income tax cut."

At the Ways and Means hearing, Rep. Tom Downey, a Long Island Democrat, repeatedly pressed Dick Darman, director of the Office of Management and Budget, and Mike Boskin, the President's chief economic adviser, to say "what is wrong with taxing the rich to give to the middle class."

The President's men answered, correctly, that this would have no effect on the economy and could lead to future tax increases for taxpayers of moderate means.

Near-Record Employment

But there is more to the story than that.

Even with the recession, jobs in the United States are near record totals.

The employment rate (total employment as a percentage of the adult population) was 61.3% in November. That is down from the peak of 63.1% two years ago, but still well above the highest value posted in any other economic expansion.

The Real Downside

Despite the employment level, real income per worker has been stagnant for almost 20 years. Americans have truly been working more and enjoying it less.

Real income per worker is an excellent proxy for productivity, or output per hour. One of the iron laws of economics is that, on average, a society cannot pay itself more than it produces.

If Rep. Downey really wanted to help the average worker, he would talk about boosting investment and productivity. He would talk about raising corporate profits and cash flow, which finance most investment.

Robbing Peter to pay Paul may be good politics, but it is lousy economics.

Wake Up, Sleepyhead!

There is no denying that the economy is somnolent.

The Commerce Department's refurbished gross domestic product data made plain that business has been becalmed for a long time. Relatively small gains in consumer and government spending were offset by relatively large drops in capital investment, housing, and inventories. A decline in the trade deficit accounted for 97% of the $51 billion gain in real output since Mr. Bush took office.

The revised national accounts show that inflation was a bit higher, and real growth lower, than previously reported. This suggests the Labor Department will have to reduce its productivity estimates. The new data confirmed that the problems of slow growth and compressed living standards are more serious than estimated earlier.

Investment Tax Credit

Desultory or not, the current discussion in Washington is beginning to raise some real issues. Prospects are improving for sensible, if modest, actions to boost investment.

Restoring the investment tax credit, as one example, would give a big boost to capital goods producers.

The economy is pulling unsteadily out of recession. There is little risk of a slump that would drive business to a new low. To the contrary, a surge in investment could increase real GDP by 3%-plus next year.

Mr. Heinemann is chief economist of Ladenburg, Thalmann & Co., investment bankers in New York.

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