The Bush legacies

A somewhat surprising piece at CBC.ca:

A snapshot of the world on September 12, 2001, would have revealed the following: an Iraq led by a brutal dictator defying UN inspectors and seeming to be on the verge of recreating a military program involving weapons of mass destruction; a strong and thriving terrorist network, supported by a Taliban-governing Afghanistan, celebrating the launch of the deadliest attack on U.S. soil; and Americans bracing for what most believed would be an inevitable second strike.
Taking that same snapshot more than seven years later, the world’s landscape has changed dramatically. Iraq and Afghanistan have become burgeoning, albeit troubled, democracies and strategic allies of the United States.
[…]
As al-Qaeda’s host, Afghanistan was the natural first target. NATO forces were able to overthrow the regime within months and put in place a Western-friendly leader, who eventually became the first democratically elected president of the country.
That means little to those who look at Afghanistan today and see a country still riddled with poverty, corruption, rising opium production, a presidency with little power and a resurgent Taliban.
Yet there have been important, if fragile, achievements in Afghanistan over the past few years — more widespread schooling, regional government, a more professional army — that hold out at least some hope for the future.
[…]
Today, Iraq has a badly-functioning but still democratically-elected government and GDP per capita higher than it was before the war. According to the Brookings Institute, Iraqis now have more cars and better access to phones, internet service and media outlets than before.
All achievements to be sure, although little comfort to the families of the tens of thousands killed and injured in the violence.

If Iraq and Afghanistan can become stable, functioning democracies, the 43rd President’s foreign-policy legacy might be salvaged. It’s his economic legacy from which his reputation – and his country – may never recover:

President Bush has presided over the weakest eight-year span for the U.S. economy in decades, according to an analysis of key data, and economists across the ideological spectrum increasingly view his two terms as a time of little progress on the nation’s thorniest fiscal challenges.
The number of jobs in the nation increased by about 2 percent during Bush’s tenure, the most tepid growth over any eight-year span since data collection began seven decades ago. Gross domestic product, a broad measure of economic output, grew at the slowest pace for a period of that length since the Truman administration. And Americans’ incomes grew more slowly than in any presidency since the 1960s, other than that of Bush’s father.
Bush and his aides are quick to point out that they oversaw 52 straight months of job growth in the middle of this decade, and that the economy expanded at a steady clip from 2003 to 2007. But economists, including some former advisers to Bush, say it increasingly looks as if the nation’s economic expansion was driven to a large degree by the interrelated booms in the housing market, consumer spending and financial markets. Those booms, which the Bush administration encouraged with the idea of an “ownership society,” have proved unsustainable.
[…]
Even excluding the 2008 recession, however, Bush presided over a weak period for the U.S. economy. For example, for the first seven years of the Bush administration, gross domestic product grew at a paltry 2.1 percent annual rate.
The administration also failed to gain traction on some of the fundamental economic and fiscal issues facing the nation — including solidifying the finances of Medicare and Social Security, simplifying the tax code, or making health care more affordable. Resolution of those issues might have left the government more flexibility to respond to the current crisis by lowering the nation’s future budget deficits.
The federal government had a modest budget surplus when Bush took office in 2001, but ran a deficit — funding itself to a significant degree with borrowed money — of 4.9 percent of gross domestic product in 2004 and 4 percent in 2005, even as the economy was growing at a healthy pace.

There was a time, not too long ago, when the Republican Party was considered the “fiscally responsible” one. Not anymore.
Damian P.

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16 thoughts on “The Bush legacies

  1. You can’t fault or praise presidents too much for GDP growth during their terms because the economy responds to signals that are often outside their remit. For example, Bush inherited a collapsing tech bubble and was then hit by the meltdown following 9/11.
    As for the modest surplus he had when taking over from Clinton, again, this was largely a function of factors outside his and Clinton’s control. A graph of the surpluses during Clinton’s second terms shows a rapid shrinking of the surplus that would have turned into a deficit no matter who was in office after Clinton. There was no escaping the tech collapse.
    However, I would fault Bush directly for the explosion of spending during his tenure. People will fault his tax cuts for this but government revenues also climbed during this time. It was spending that produced the deficits.
    Now, of course, we have a president and a congress that his committed to a vastly greater amount of spending. Say goodbye to the greenback and, perhaps, the reign of American economic might.

  2. “All achievements to be sure, although little comfort to the families of the tens of thousands killed and injured in the violence.”
    BULL CRAP. Even the Guardian noted that Saddam was culling 5,000 people a month from the population to the shredders and mass graves and to Quisay’s play rooms.
    Both Iraqis and Americans are safer today. It is a tremendous comfort. Ask the Shi’a who have their tribal heritage swamps re-flooded; Ask the Sunnis who have evicted Al-Qaeda; Ask the Kurds who no longer fear gas attacks; Ask the business men and women building Iraq’s new economy.
    Ask the Lefties here bitter that they have been proven liars and freaks. They may deride a man for being wrong; but they go simply apeshit when he’s right.
    As to the Republicans… Time was when they were Conservatives. Today the party is rife with liberals from the top down. It was that sick rot that left in place Clinton’s CRA housing loan laws, voted for No Childs Left Behind, Senile Prescription Benefits… pork pork pork.
    Bush leaves a flawed, blundered record. He acted on external existential threats while abetting internal threats. For this we are to be thankful?

  3. Damian, of course you’re right that the Republicans were viewed as the “fiscally responsible one.” And you’re right that Bush has put a torpedo in that reputation.
    But was that reputation even deserved? The modern Republican party begins with Reagan, and whatever Reagan’s virtues, fiscal prudence sure wasn’t one of them. Then came George H. W. Bush, who took essential steps to get the budget under control — and was reviled by Republicans for it. Then a Democrat who erased the deficit and left the books in such good shape that the great debate of the 2000 election was what to do with the massive surplusses that were coming. Then came Bush Jr, and we all know what happened next.
    Oh, and at the state level, mainly Republican governors (Democrats, too, however) cut taxes and boosted spending and the moment the economy wobbled their budgets went massively red.
    So why on earth did anyone think the Republican party is the party of fiscal prudence? I honestly don’t get it.

  4. “There was a time, not too long ago, when the Republican Party was considered the ‘fiscally responsible’ one.”
    Are you saying the Democratic Party is the “‘fiscally responsible’ one”? You know, the party about to give us the the trillion dollar “stimulus” pork barrel? The party that encouraged irresponsible lending by Freddie Mac and Fannie Mae?

  5. Republican, Democrat?
    They’re politicians. Have a look at this graph of government payroll and tell me which government of any stripe was being conservative.
    http://fabiusmaximus.wordpress.com/2009/01/20/milestone/
    The only one who seemed to decrease the size of government was first term Reagan, only to be foiled by his nemesis, the free spending second term Reagan.
    With Harper about to put on his best Layton impression up here, I’m wondering where everyone gets this fanciful notion of any elected government being responsible with taxpayers money.
    Oh and on that note, does anyone have an actual figure for the Bush legacy? Since wars don’t make it to the budget sheets and the Bush administration decided that it wasn’t anybody’s business how much US currency is in circulation, does anyone have a confident estimate of how much money has been printed?

  6. “Then a Democrat who erased the deficit and left the books in such good shape that the great debate of the 2000 election was what to do with the massive surplusses that were coming. Then came Bush Jr, and we all know what happened next.”
    It appears some of us don’t “know what happened next.” What happened next was a recession within months of Bush’s inauguration, inherited from the the Democrat who “left the books in such good shape…,” combined with the 9-11 attacks that further damaged the American and global economies.

  7. Chip, I just read your post, and I think you’ve said it all. The primary criticism Bush deserves on the economy arises from undisciplined increases in budgetary spending.
    Dara:
    The military spending on Iraq and Afghanistan is usually presented as a complete net negative to the U.S. economy. Stiglitz’ widely hailed book (widely hailed by the Bush-haters…) is a prime example. This simply isn’t accurate. Regardless of philosophical arguments about the morality of war, billions of dollars in additional economic activity has been generated from these conflicts, activity that would not have existed without the wars. From increased consumer spending by service members and their families, arising from combat pay and retention bonuses, to civilian defence-related corporations and their employees making more money, all this has to be factored in to determine the net cost of the wars.

  8. “Have a look at this graph of government payroll”
    Why, such… pretty pictures. :-]
    MIke H? You still tryin’ to teach it to sing?? Yipes. Look, military spending is less than a wash. It’s less wasteful as government spending in general, kuz the economic advantages obtained through industrial innovation often offset some of the loss. Thing is, it’s a necessary waste of treasure. Unlike, say, a job as a sanitary inspection engineer in the Provincial Recycling Ministry’s Mississauga office. THAT’s just a feakin’ hand-out.

  9. Mike,
    Should this net valuation for money getting kicked back into the economy be used for every government dollar passed out to citizens?
    Like for instance welfare meets your criteria of spurring consumer spending where there would be none.
    “Regardless of philosophical arguments about the morality of war, billions of dollars in additional economic activity has been generated from these conflicts, activity that would not have existed without the wars.”
    That statement would be perfect as a lead in for a criticism of the influence of the military industrial complex.

  10. “Should this net valuation for money getting kicked back into the economy be used for every government dollar passed out to citizens?”
    Of course not, Dara. The vast majority of “government dollars” are spent on vital, non-discretionary programs that a civilized, compassionate society is obligated to provide. Health care, education, public infrastructure, police and fire, and yes, welfare. There will always be debates over the dollar amounts and accompanying efficacies of certain aspects of vital program spending, but there is a baseline spending level that is as non-discretionary as the program is itself. The funding gap between that baseline level and the remaining program spending that would qualify as chopping-block- eligible spending often isn’t very significant, if it exists at all.
    The conflicts in Iraq and Afghanistan are different. The US government has committed the baseline spending to its military, whether it is used to fight a conflict(s) at a given point in time or not. To repeat my earlier point, the “war-spending” above that baseline does create considerable ancillary economic activity that would not have existed otherwise. While it is of considerable propagandist value to cite the up front expenditures on Iraq and Afghanistan as 100 % drains on the treasury, that just isn’t an accurate depiction of the net cost of these conflicts.
    “That statement would be perfect as a lead in for a criticism of the influence of the military industrial complex.”
    I don’t expect the nearly one million Rwandans butchered in 1994 would have begrudged certain Americans making additional income from a military operation initiated to save their lives, Dara.

  11. Ran:
    It’s pretty much impossible to accurately calculate the net cost of the conflicts in Iraq and Afghanistan, but there definitely is a net cost, and that number will be very different than the numbers we see being cited by people like Joseph Stiglitz.

  12. Mike, I see what you mean with it being an additional, non-systemic cost but I think that you’ve defined it loosely enough that a lot of things would qualify. Not that I completely disagree with all of them.
    For instance framing the recent bailout as a war on the credit crisis works under your terms above and certainly the cost of that will not be the original outlay of cash, hopefully.
    But a massive green program, like the one just proposed by the ex PMs, could be framed the same way. Should the costs for that be prorated, especially since you’ll be able to put a cash value on accomplishments in efficiency?

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