Has Team Romney forgotten that the Bush years were terrible? – The Washington Post.
To make it look okay, you eliminate all context. You look at levels rather than trends. Unemployment was in the 5 to 6 percent range. The economy was growing. Deficits, though rising, were at manageable levels. The stock market was booming. Most Americans were living pretty well. That all sounds pretty good.
To make it look weaker, you add back in some context. Monthly job growth from March 2001 to December 2007 — so, from the pre-2001 recession peak to the pre-2007 recession peak — was 68,000. That’s one of the weakest expansions on record. Meanwhile, poverty and inequality were increasing even as median incomes were falling. Oh, and while Bush’s deficits weren’t huge, they came during a period of growth — normally, periods of growth are when you cut the deficit, as we saw in the 1990s. So these were deficits of an unusually irresponsible sort.
To make it look absolutely awful, you add in the fact that there was a huge credit bubble inflating beneath the economy that George W. Bush did nothing to stop and that his choice for Federal Reserve chairman, Alan Greenspan, did much to inflate. So as weak as the decade’s economic numbers look, they’re much, much worse when you realize they were artificially pumped up by the bubble, and Bush’s record is much, much worse when you add that the economic collapse began on his watch, and the long-term cost of the tax cuts and Medicare Part D and the war in Iraq.
In other words, the more you actually know about Bush’s economy, how it compares with other periods in our economy and the role it played in the financial crisis, the worse it looks. I’m open to arguments that this really isn’t Bush’s fault, or that Mitt Romney’s policy differences with Bush are more significant than they appear to me. But the period itself is, from an economic perspective, really very bad.”
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Yawn.
Cherry-picked stats and then the little dig that if we only knew “more” we’d follow The One.
It’s insulting to continuously imply – or state outright – that the poor dears who disagree with you (or anyone) just need more knowledge. More info. More…education.
Smacks of totalitarian thinking. You need to educate me until I capitulate and nod in agreement?
Blech. Podesta didn’t convince me and this rehash of his theory falls flat.
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–”Monthly job growth from March 2001 to December 2007 — so, from the end of the 2001 recession to the beginning of the 2007 recession — was 68,000.”–
The recession ended in November 2001, not March, and household employment growth between 11/2001 and 11/2007 was 144,000 a month . That compares to 62,000/mo since the last recession ended in June 2009.
Separately, the lingering effects of 9/11, corporate scandals, and the second half of the dotcom implosion all combined to weaken the economy (Bush’s warmongering with Iraq would, however, be a negative in his column directly attributable to him). The heightend investment in technology of the late 1990s allowed firms to rapidly increase productivity in the early 2000s, which temporarily restrained job growth.
In terms of economic policy, Bush cut taxes, and much of those tax cuts went to the middle class via things like the expanded child tax credit and lower across the board marginal rates. Under Bush real federal purchases sharply increased from the start of 2001 to the end of 2003, from about $700 billion to almost $850 billion in 2005 dollars. In other words, Bush’s fiscal policy was quite Keynesian – signficant tax cuts to middle class consumers and increased military spending (and it’s funny, Krugman somehow managed to complain about both slack labor markets and large deficits during Bush’s first term).
–”normally, periods of growth are when you cut the deficit, as we saw in the 1990s. So these were deficits of an unusually irresponsible sort.”–
Unemployment was rising through the middle of 2003, and GDP growth was fairly slow. While today GDP growth is also very slow, unemployment has fallen from 10 percent to 8.2 percent. Despite this, many people are saying that it would be inappropriate to cut the deficit now, and that the problem today is that the deficit is too low. Unemployment was only 1.9 percent in mid 2003 than today, when the deficit never hit 4 percent of GDP whereas today it is above 8 percent. If a 3.5 percent deficit is too high with 6.3 percent unemployment, how can an 8 percent deficit be too low with 8.2 percent unemployment?
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2) I agree with a lot of what you say re: Bush policy, and tried to signal that in the piece. Bush very much doesn’t deserve blame for the tech bubble, for instance. But Bush’s policy wasn’t Keynesian. Keynesians think you cut the deficit in an expansion. The argument is about countercyclicality, not about deficit spending all the time.
3) Which goes to your last point: It’s not the level of the deficit that matters. Ideally, we would have come out of the last expansion with a surplus, done more deficit spending in this recession, and ended up with a lower deficit. In 2003, we shouldn’t have been running deficits, and today, we need to run larger deficits in order to get nearer to full employment. You need to lean against the business cycle. So if you’re already at 5% when a recession starts, what matters is what you do after that. The starting 5% is already baked into the cake, and, from the perspective of combatting the recession, of no extra help. That’s why Keynesians talk about using expansions to “reload the fiscal cannon.”
Why would the “Bush expansion” include the first several months of a recession early in his term?
Is it fair to judge Obama’s polciies in light of the negative job growth since he took office?
I’m from Grand Rapids, MI which is home to Steelcase. Steelcase has never, really, recovered from the dotcom meltdown. Everything was booming in the late 1990′s, of course. Steelcase was doing great. When it imploded, they not only didn’t have those prior customers, but they had to compete with a flood of barely-used office furniture flooding the market.
They did $4.0 billion in sales in FYE 2001 (primarily CY 2000). Two years later it was $2.5b. Last FY it was $2.7b.
I don’t know what sort of alternative history would have to take place for Steelcase to grow from the $4.0 billion. Maybe if the guys who wrote “Dow 36,000″ were correct.
Yes, Steelcase is an anecdote – but still, folks – you included – seem to gloss over the tech-economy and its aftermath.
Bush transferred trillions from the economy to the DOD and afterward venture capital for tech dried up.
His tax cuts also meant R&D and hiring for most big companies got diverted to lucrative exec pay pkgs.
The Iraq war helped cause energy prices to soar. He sat and watched western states get raped of their wealth by the enron’s and other energy companies. Billions wasted after Katrina with little to show for it except rebuilt casinos. Sole source war contracts for friends.
We didn’t need to double the national debt and undergo a great recession to get bin laden and get saddams pistol.
Bush is part of a large group of capitalists, many Dems too, raping this country of wealth and Greenspan is one of them and Greenspan helped cause the burst tech bubble. Bush didn’t cause the tech bubble to pop but his ilk did. These thieves send our jobs overseas, close down our factories, steal the pensions, demand the companies take out large debt loads to repay the vultures, refuse to end oil subsidies or 100s million dollar bonuses for CEOs of failed companies.
The only good thing bush ever did was start the auto bailouts, and he did that and tarp because he didn’t want to leave office without some action so that he could later claim his action saved the economy.
I used to be a republican, but never again. Not wth these clowns and cowboys wrecking everything.
Stop worrying about Bush’s first 8 months and take a look at what happened in his last eight months. Once you realize things did not end up well for him, you can start to appreciate all the years in between were filled with trillion dollar gaffes and blunders, most of it ideologically driven.
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http://rwer.wordpress.com/2011/03/24/emerging-vs-d…
The UK is seeing nominal growth of about 3% (last two quarters), close to the US rate of 3.8%. However, the UK is getting about 4% inflation vs. 1.2% inflation in the US during those quarters. From the growth rates, it appears that the UK is stuck in stagflation. The UK isn’t the same as the US – it is having less success with exports, and its financial sector is much larger as a percentage of the economy. The deficit as a % of GDP is falling in both the US and UK, and only slightly faster in the UK.
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So how would you adjust the rating for President Clinton’s overall economic record given the huge equity bubble that inflated on his watch (i.e. the Internet/Tech bubble) that he did nothing to stop and that his choice for Federal Reserve chairman, the same Alan Greenspan, did much to inflate?
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Bush tax cuts 3 trillion
Iraq war trillion plus
Mis managed economy, one great recession
Re Romnye vs Obama: I might have voted for Obama, but can’t live with his inability to knock off a dime from our deficit over 3+ years-$100 BILLION EVERY MONTH sicne he’s been in office-YOU’RE FIRED!
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Dow Jones January 2, 2001 – around 10,600
Dow Jones January 2, 2009 – around 9,000
So over 8 years, that’s a decline. A shrp decline. So if you have the bulk of your investments in such things as mutual funds or 401Ks there is a very real chance your nestegg declined over that 8 years, and we’re not even factoring such things as inflation affecting that number.
The Bush economy was a disaster if you look at things from start to finish. And for those that want to factor in the Clinton Recession and the Bush recession, go ahead, The Clinton Recession was a minor bump people barely remember. The Bush recession is a major doozy (Yes, doozy is a technical term.)
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just keep tying those names together, seamlessly. (seamously)
let them keep trying to vindicate the record of george w. bush, and dick cheney…keep their names wrapped around mitt romney.
all to the good!!!
in fact, maybe soon cheney and bush will start locking arms with mitt on the campaign trail.
dishonest. negligent. abusive of power. liars. incapable.
the more mitt romney gets tied to the policies of george w. bush and dick cheney,
the better.
reminder on this day, of the incomparably, incompetent president bush,who said,
“we will smoke osama bin laden out, wherever he is.”
well, it is president obama, who got the job done…
and has been left to repair the negligence of the clinton and bush economic years,
and has finally shown what it is,
to be a capable, honorable brilliant, compassionate, effective commander -in chief…
www.barackobama.com
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If you take job growth from November 2001 to December 2007 it is 35% higher then the figure you posted.
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Then I checked the dates FRED uses to mark the beginning and ending of recessions, then I recalculated using the November 2001 date to the December 2007 using the same sheet.
http://research.stlouisfed.org/fred2/series/PAYEMS/
I’m not claiming it changes Klein’s underlying point. But it does appear to be an error.