Sunday, September 07, 2008

Fool Me Twice ...

As the sorry presidency of George W. Bush draws to a sorry close, one hopes there have been at least some lessons learned that we can carry forward. It's a good time to take stock, especially since we'll soon be choosing a new president for another four or eight years.

Let us consider the economy, which under Bush's direction has vacilated between anemic and unimpressive—especially from the perspective of those who earn their livings working for wages and salaries.

[Update Dec 2, 2008: This piece was originally written before the financial meltdown of the past few months. We're now way beyond, on the downside, "anemic" and "unimpressive". Experts say this may end up being the worst economic downturn since the Great Depression. All major stock market indices have plummeted dramatically. Millions of homes are being foreclosed. Well over a million workers have lost their jobs, with no end in sight. Credit markets have frozen. Major financial institutions have disappeared. The "big three" automakers may do the same. Yesterday officials announced that we've been in recession for about a year, since last December. Next year is expected to be even worse. It's hard to find anything good to say about the economy during Bush's tenure.]

Bookended by two recessions, the interior years of Bush's economy have proved almost as underwhelming as the interior space between Bush's ears.

Let's remember. At the dawn of the Bush presidency, the national discourse involved deciding how best to use a projected $10 trillion budget surplus over the coming decade. Need we have bothered? The debt has piled ever deeper each and every year.

The first term's suspense was whether Bush could make it through without a net loss of jobs. As his second term winds down, we've suffered eight consecutive months of job losses. In the most recent month, the unemployment rate shot up by 4/10 of one percent to its highest level in almost five years. Nine million Americans are now out of work. Bush's economy is poised to give back what little it has gained.

Contrast all that with Bill Clinton's eight years, when four times as many jobs (23 million!) were created, and the budget deficit was wiped away.

Through not so great times and bad, Bush has preached the necessity of making his tax cuts permanent, in order to keep the economy strong. John McCain now says the same.

Keep? It's fine to argue over what makes a strong economy, but can we at least cut the supply side trickle down crap—particularly when it so clearly isn't working?

Bush's first term endured what has been called a mild recession, inherited from Clinton and aggravated (say Bush's apologists) by 9/11. Those difficulties aroused what has been, by historical standards, an almost nuclear response in both fiscal and monetary policy.

On the fiscal side are those enormous tax cuts, the majority of which went to the very richest minority of Americans. (Of course, the tax cuts had been planned since before the recession; they were conveniently re-purposed to ostensibly pump up an ailing economy.)

The tax cuts were buttressed monetarily by an unprecedented surge of liquidity from Alan Greenspan's Federal Reserve. (The resulting housing bubble was Greenspan's parting gift to an ungrateful nation.) All told, the assault has been breathtaking.

So where's the beef? It would be one thing if all—or any—of the promised tax cut benefits had materialized. If shoving money at the rich made things better for everybody, then so be it. But now that we find ourselves sinking once more into economic morass, without even having dragged ourselves very far out of the previous swamp, it's fair to ask whether we've been hoodwinked.

Why was the economy under Bill Clinton so stellar, for so long, and by so many metrics, despite the higher tax rates then prevailing? Why haven't the current lower tax rates ushered in a new era of economic vitality?

Incredibly during these darkening days, we find John "Seven Houses" McCain running on George W. Bush's economic platform. McCain consistently opposed the Bush tax cuts when they were proposed (he said he couldn't "in good conscience" support cuts tilted toward the rich), but now he's out in front of even Bush in calling to make them permanent. During the remainder of this year's presidential campaign, we'll be told we need them more than ever, and for whatever reason suits the monment's convenience. Will we buy it?

Copyright (C) 2008 James Michael Brennan, All Rights Reserved