Jon Chait says the so-called Bush Boom didn't do much for most people:
George W. Bush's Economy: The Invisible Hand Slaps Conservatives Again, by Jonathan Chait, TNR: ...Ah,... the Bush Boom. It's a bygone era, ... cut short--by ... the Bush recession. Actually, the second Bush recession, to be precise.
Now, I don't really think it's fair to blame a president for having the economy tank on his watch. But... For several years--the "Bush Boom" years--Republicans were essentially arguing that the mere fact that the economy was expanding should be taken as proof that Bush's economic policies succeeded.
President Bush would routinely announce facts such as..., "During the time when we cut taxes to today, our economy has grown by more than $1.9 trillion." He would mock his critics...
The whole trick here was to start at the bottom point of the economic cycle and assume that any subsequent improvement was the result of his policies. Of course,... the economy ... goes through cycles. ... Bush was claiming his miracle fertilizer succeeded because his plants were taller at the end of the summer than at the beginning of spring.
So the justification for Bush's economic policies was that the economy was no longer in recession. Now they can't even claim that any more. It's as if Bush's plants suddenly wilted in August.
I'd never go as far as conservatives do in attributing economic growth to tax rates. But ... let's see how the Bush Boom measures up... A recent paper by the Economic Policy Institute compares the Bush Boom to the ten previous periods of economic expansion since 1949. If you measure it from the peak of the previous business cycle, the Bush Boom ranks eighth out of the last ten expansions. If you measure it from the trough of the recession, Bush's preferred gauge, it ranks dead last.
And the meager growth that did occur accrued almost entirely to the rich... Median family income actually declined. ... So, from the standpoint of making most people better off--which, of course, is the whole point of economic growth--the Bush Boom was a staggering catastrophe.
The Bush Boom was accompanied by frantic attempts to convince Americans that things were actually going better than they thought. One comical subgenre of Republican argumentation was to explain away polls showing persistent economic pessimism as ... the fault of the liberal media playing up bad news and ignoring the glories of the Boom. ...
When Phil Gramm recently remarked that we were becoming "a nation of whiners, " he gave voice to what had become the standard Republican view. What's the matter with you people? Can't you see that Phil Gramm and everybody he knows are making out like bandits? ...
The initial effect of tax cuts for the rich is to increase public debt and income inequality. Conservatives justify these consequences by pointing to the alleged second-order effects of tax cuts--promoting stronger incentives and higher growth. But, if the second-order effects are so tiny they get washed out by larger economic factors--and the evidence overwhelmingly suggests they are--why should we pay the price for them?
When the macroeconomic rationale for upper-bracket tax cuts is gone, you're left with nothing but a naked upward-redistribution scheme. ...
Posted by Mark Thoma on Wednesday, August 20, 2008 at 01:08 AM in Economics, Politics |
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