« The Lewis Doctrine | Home | Buyer's remorse coming for the Democrats? »
February 8, 2004
The Clinton Recession
John Kerry is fond of calling our recent economic troubles "the Bush recession." Anyone who was working in 2000 knows that economic weakness started that year (remember what the stock market did April 14, 2000?) and of course 9/11 made the recession worse than it otherwise would have been. Whether the recession is officially dated back to Nov. 2000 or March 2001, the trends was established earlier in 2000 and... does it really matter? Can anyone name a Bush policy that contributed to the recession? (In fact, here's praise from at least one Democrat that the Bush policies have helped improve the economy.) Bush deserves criticism for his failure to restrain spending but this hasn't slowed the economy down to date.
Worried about the deficit? Here's some perspective from WSJ.com - The Deficit Bugaboo. (Or see this page if you don't subscribe to WSJ.) In it Richard Rahn also makes the case that Clinton & Rubin may deserve some blame for the recession. Here's an excerpt (the whole piece is worth reading):
The failure of the Rubin deficit hawks to understand that high taxes on capital were more damaging to the economy than a modest deficit led them to embrace a budget surplus. While they received almost universal acclaim for this action, in effect, what they were doing was a costly drain on high-value, private-sector capital for the sake of reducing low-cost government debt. If in 2000, instead of running a surplus, the Clinton administration had enacted a tax cut to reduce the highest marginal tax rates, the corporate income tax and the double taxation of dividends, we probably would have avoided the most recent recession and all the misery, unemployment and hardship it caused.
No economist believes that Bush created the recession. Not even Kerry, in his most election-year moments, thinks that it is all Bush's fault. The question is whether the Administration's economic policies have made that recession more painful and longer than it would otherwise have been. I think there is some evidence to support that argument. But the real issue is more simple: can we sustain Bush's increase in spending coupled with his tax cuts? The answer to that is less doubtful. No. We cannot.
Make the argument that Bush has made the recession last LONGER than it otherwise would have. Come, can you even make an argument? If you can't then all this blather from the Democrats about the job's lost under Bush is intellectual dishonesty. Come on, you are a Keynesian--wouldn't he have wanted the tax cuts and spending that we have seen under Bush.
I hear criticism of Bush's spending from the right, but rarely from the left--all the Democratic candidates want to spend MORE than Bush. You know this. I agree that this is a long term issue that we have to tackle but 1) Democrats would make the deficit worse and 2) it has nothing to do with the current state of the job market.