The Economic Consequences of Mr. Bush

[CatWoman]

The next president will have to deal with yet another crippling legacy of George W. Bush: the economy. A Nobel laureate, Joseph E. Stiglitz, sees a generation-long struggle to recoup.

When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.

I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance.

And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both.

Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle “worst president” when it comes to stewardship of the American economy. Once Franklin Roosevelt assumed office and reversed Hoover’s policies, the country began to recover. The economic effects of Bush’s presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America’s being displaced from its position as the world’s richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush.

http://www.vanityfair.com/politics/features/2007/12/bush200712

[papau]

1. I agree - but Wall Street talking heads still do not see the obvious. n/t

[Deja Q]

2. Why bother educating our own when it's cheaper to offshore those jobs?

[fascisthunter]

3. It's the Republican Goal

cripple the economy as we knew so they have the perfect opportunity to privatize EVERYTHING and by doing so, shifting power to the upper class forever.

Republicans do not believe in Democracy, but instead believe in an oligarchy.

[FormerDittoHead]

8. It's called "Starving the Beast" - link

http://en.wikipedia.org/wiki/Starve_the_beast

[fascisthunter]

12. Funny, Because "We the People" are that "Beast"

ever since Reagan, "government bad" rhetoric and the corporate media's feigned support of this rhetoric we now find ourselves losing everything, not just our government. What used to be affordable due to socialism is now privatized and ten times more expensive. What fools live in this country of ours.

[brazos121200]

4. The current president Bush has run up

more national debt than all of the other presidents combined, and that includes Reagan and Bush's father. Our debt will be over 10 trillions by January of 2009 when junior leaves office. I cannot see future generations sacrificing and struggling to pay of the debt left to them by this occupant of the white house. Most probably some future president will have to either wipe the slate clean or there will have to be a revolution, with the new government not recognizing the huge debt.

[Angela Shelley]

5. Now that will be interesting ...

wiping the slate clean ... or ... revolution.

[Selatius]

6. With all due respect some of these problems predate Bush.

In general, I agree with Stiglitz that we're in a bad way, but many of these problems were in sore need of addressing long before George W. Bush became a familiar name.

Gas prices are a problem of peak oil. We would've changed course if we had elected Jimmy Carter instead of Ronald Reagan, who promptly junked Carter's new energy plan. What was the mandated fuel efficiency standard for autos in the US in the 1990s compared to fuel efficiency standards in Western Europe or Japan? Yeah, I thought so, not a good picture. With the education system, there have been massive problems here that predated Bush as well. Schools are still understaffed, overcrowded, and underfunded. Bush has contributed his problems to the mess, but if we removed that, we'd still be lagging behind the industrialized world as far as children's education is concerned.

And the "roaring '90s"? Most working class and working poor people never saw real economic gains from that period. If anything, the wealth and income gap during that period expanded further. That wasn't progress. It was a house built on sand. The exuberance of ever-rising stock prices on the Dow only masked the pain of the working poor in America.

[CatWoman]

13. more

Remember the Surplus?

The world was a very different place, economically speaking, when George W. Bush took office, in January 2001. During the Roaring 90s, many had believed that the Internet would transform everything. Productivity gains, which had averaged about 1.5 percent a year from the early 1970s through the early 90s, now approached 3 percent. During Bill Clinton’s second term, gains in manufacturing productivity sometimes even surpassed 6 percent. The Federal Reserve chairman, Alan Greenspan, spoke of a New Economy marked by continued productivity gains as the Internet buried the old ways of doing business. Others went so far as to predict an end to the business cycle. Greenspan worried aloud about how he’d ever be able to manage monetary policy once the nation’s debt was fully paid off.

This tremendous confidence took the Dow Jones index higher and higher. The rich did well, but so did the not-so-rich and even the downright poor. The Clinton years were not an economic Nirvana; as chairman of the president’s Council of Economic Advisers during part of this time, I’m all too aware of mistakes and lost opportunities. The global-trade agreements we pushed through were often unfair to developing countries. We should have invested more in infrastructure, tightened regulation of the securities markets, and taken additional steps to promote energy conservation. We fell short because of politics and lack of money—and also, frankly, because special interests sometimes shaped the agenda more than they should have. But these boom years were the first time since Jimmy Carter that the deficit was under control. And they were the first time since the 1970s that incomes at the bottom grew faster than those at the top—a benchmark worth celebrating.

By the time George W. Bush was sworn in, parts of this bright picture had begun to dim. The tech boom was over. The nasdaq fell 15 percent in the single month of April 2000, and no one knew for sure what effect the collapse of the Internet bubble would have on the real economy. It was a moment ripe for Keynesian economics, a time to prime the pump by spending more money on education, technology, and infrastructure—all of which America desperately needed, and still does, but which the Clinton administration had postponed in its relentless drive to eliminate the deficit. Bill Clinton had left President Bush in an ideal position to pursue such policies. Remember the presidential debates in 2000 between Al Gore and George Bush, and how the two men argued over how to spend America’s anticipated $2.2 trillion budget surplus? The country could well have afforded to ramp up domestic investment in key areas. In fact, doing so would have staved off recession in the short run while spurring growth in the long run.

But the Bush administration had its own ideas. The first major economic initiative pursued by the president was a massive tax cut for the rich, enacted in June of 2001. Those with incomes over a million got a tax cut of $18,000—more than 30 times larger than the cut received by the average American. The inequities were compounded by a second tax cut, in 2003, this one skewed even more heavily toward the rich. Together these tax cuts, when fully implemented and if made permanent, mean that in 2012 the average reduction for an American in the bottom 20 percent will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000.

[Warpy]

7. Hey, guys, it's not just STUPID's bungling

This is the end game of conservative economics from BOTH parties, from the Wall Street Democrats as well as the rabid supply siders on the far right.

Liberals went out of power in 1969. How's this 38 years of conservative economic reign working for us? Do you think we'll be able to reform ourselves out of it better than the New Deal did, write our grammar school history books and not let these assholes off the hook like they did, pass partially poisoned legislation that was due to fail during any period of steep inflation? Or do you think we'll realize this is cyclical, that the stinkin' thinkin' of the supply siders will always be with us and create more permanent ways of educating the coming generations with no direct experience of an age of Robber Barons just what the lofty ideal of deregulating business to make it more efficient eventually adds up to: theft.

What we are seeing is 38 years of unbroken conservatism. It doesn't matter that they're still blaming liberals for all their mistakes. After 38 years, we know who's to blame.

[OHdem10]

9. Do not let the 12 years of Republican Control of House and

and Senate and their Center Right (not a little R of Center) but
Center Right Conservative Eeconomic Policy get away with no
accountablity. They pushed their own agenda and rubber stamped
Bush.

We are running against them not Bush.

[Vinca]

10. I'm really annoyed by the continual rosy unemployment reports.

They don't distinguish between a minimum wage job and a 6 figure salaried job. So what if it's only 4.6% if the jobs created pay only a fraction of what it actually costs to exist in this country. The manufacturing jobs that paid well and created comfortable lives for people are gone. You can't pay mortgages or help keep the economy humming along on burger flipper pay. Somehow I think we have engineers and scientists available, too, but corporations would rather pay slave wages in foreign countries than hire Americans. The country now revolves around money. People don't count, only money.

[Perry Logan]

11. Thanks, Catwoman.