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Tilting at Windmills

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November 18, 2010

DON'T REPEAT FAILURE AND EXPECT SUCCESS.... When Republican policymakers slashed taxes early in George W. Bush's first term, they had high hopes about what the policy would achieve. Americans were told, for example, that these tax cuts would create millions of jobs, keep a balanced budget, and generate robust economic growth.

As this tax policy gets ready to expire next month, it's worth noting that the Republican plan failed rather spectacularly. On job creation, Bush's record was the worst since the Great Depression. On balancing the budget, Bush racked up the biggest deficits ever, and added $5 trillion to the debt, en route to being labeled "the most fiscally irresponsible president in the history of the republic" by his comptroller general.

But what about economic growth? Did the Republican tax policy generate the robust economy Bush promised? David Leonhardt, responding to a Fox News item, sets the record straight.

Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7.

The competition for slowest growth is not even close, either. Growth from 2001 to 2007 averaged 2.39 percent a year (and growth from 2001 through the third quarter of 2010 averaged 1.66 percent). The decade with the second-worst showing for growth was 1971 to 1980 -- the dreaded 1970s -- but it still had 3.21 percent average growth.

The picture does not change if you instead look at five-year periods.

This isn't a subjective question open to debate; we tried a policy and we can evaluate its results. In this case, Republicans said Bush's tax policy would produce wonders for the economy, and they got exactly what they wanted. We now know, however, that the policy didn't generate robust growth, didn't create millions of new jobs, didn't spur entrepreneurship and innovation, and certainly didn't keep a balanced budget.

And now, as the failed tax policy is set to expire, what's the new Republican message? That this policy must be extended at all costs, and anyone who disagrees is putting the economy at risk.

They not only say this with a straight face, the argument in support of a policy we already know didn't work manages to scare a whole lot of Dems.

Steve Benen 12:25 PM Permalink | Trackbacks | Comments (18)

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Comments

All that you say is true, but let us not forget that Obama said the stimulus would keep unemployment below 8.5%. Fair and balanced, my good man, always be fair and balanced.

(for those gentle readers new to this venue, the above is snark.)

Posted by: DAY on November 18, 2010 at 12:38 PM | PERMALINK

The Cheney/Bush policies didn't "fail".

They succeeded overwhelmingly in accomplishing what they were intended to accomplish: the most massive transfer of wealth in history from the US population as a whole into the hands of a tiny, ultra-rich, increasingly hereditary corporate oligarchy.

The only "failure" was the failure of the American people to see through the deliberate lies that the Cheney/Bush regime used to peddle their corrupt, criminal class warfare.

And that "failure" is understandable, given that the handful of giant corporations that own virtually all of the mass media in the USA, from which the overwhelming majority of Americans get the overwhelming majority of their information, knowingly aided and abetted the Cheney/Bush regime's deceit, beginning with the 2000 election campaign.

To say that the Cheney/Bush policies "failed" is like saying that a con artist who sells you swamp land in Florida as a "retirement home" and then absconds with your life savings "failed" because the swamp land was not in fact suitable for a retirement home.

What you should be telling people is not "don't repeat failure and expect success" but "don't get fooled again".


Posted by: SecularAnimist on November 18, 2010 at 12:38 PM | PERMALINK

It's not the tax cuts that ran up the deficit, it's all the unchecked spending that did!

Posted by: CT Voter on November 18, 2010 at 12:41 PM | PERMALINK

What is reality anyway? It's what you hear over and over. It's why the right is ascendant. They have megaphones and we have sign language for the hearing impaired. I wish it were different. I wish that people would actually think rather than simply believe everything they read in a chain e-mail or hear from a talk-radio blowhard. But that's not reality and until it changes, people will believe lies.

Posted by: walt on November 18, 2010 at 12:41 PM | PERMALINK

It would seem we've entered the age of the rule of post turtles. The rubes are so enamored with the turtles being up on the posts that they never bother to contemplate why.

Posted by: Gandalf on November 18, 2010 at 12:53 PM | PERMALINK

Actually, @CT, it was both - the tax cut redistributed public monies to the wealthy at a great expense to revenues, and at a time when "spending," as encapsulated primarily by the two wars and unfunded policies such as Medicare Part D, was piled on to the deficit. Combine the two and voila, massive deficit increase. Oddly, I don't recall any "tea party" protestations during this time period. Odd that.

Posted by: jsacto on November 18, 2010 at 1:05 PM | PERMALINK

One thing that has really annoyed me about Obama is that he seems a lot less wonky than I expected. I expected that he would really CARE about the difference between good policy and bad policy.

Instead he governs as if policy doesn't even matter. As long as he can reach a political consensus, the actual policy outcome is irrelevant. As a result we got a stimulus bill that was too weak. A health care reform bill that didn't do much about costs. And a FinReg bill that didn't end the structural problems that make future crises more likely. He even defended off-shore drilling as if it didn't matter whether the Dept. of Interior was prepared to provide adequate oversight.

I had HOPED that Obama would learn from the mid-terms that policy matters. Not just on the merits, but for politics as well.

It matters, politically, whether the economic policies work. It is better to go into an election with 5% unemployment and have the media call you a socialist than to go into an election with 10% unemployment and the media calling you a "centrist". It is better to have the media call you a socialist and keep Wall Street from melting down than to be seen as "business friendly" when the next crash occurs. It is better to have the media ask if you are a "European-style" politician and have people's health care premiums be cut in half than to be seen as a "free-marketer" while people go bankrupt from health care costs.

People called F.D.R. lots of names. He was elected 4 times.

Posted by: square1 on November 18, 2010 at 1:12 PM | PERMALINK

The zero years were a disaster for over 90% of the US population. Real wages fell. Costs for basic living expenses (food, housing, transportation, education, healthcare) skyrocketed. Yes a person could get a computer or other fancy electronics on the cheap. Yes Walmart gave us lots of cheap plastic toys (made in China) they gave us the illusion that we were 'rich' and lots of 'stuff'. But maintain that illusion millions of Americans were forced into debt just to afford the basics. Most people left the zero years poorer.

We deregulated the banks, slashed taxes for the wealthly left the decade with real unemployment/underemployment at double digits (17-20%). With real incomes lower than they were 2000. With a crumbling infrastructure.

The only thing that prevented another Great Depression was the much maligned 'social safety net' that did its job keeping 10s of millions employed and million unemployed out of poverty and feeding the millions who are in poverty.

And the public who lived through that decade just gave the win to the people who shout from the rooftops to continue with the exact same policies or better yet take them even further.

Posted by: thorin-1 on November 18, 2010 at 1:13 PM | PERMALINK

Maybe we should concede a point to the conservatives. The repeal of the Bush tax rates will eliminate all of the jobs that were created as a result of the Bush tax rates, zero.

Posted by: danimal on November 18, 2010 at 1:19 PM | PERMALINK

As usual, Benen and you liberals fail to understand economics.

The problem with the Bush application of supply side economics was due to insufficiently cutting taxes on the wealthy. As Arthur Laffer would tell you, if given a chance, his 'Laffer curve' proves that lowering taxes will generate greater receipts to the government coffers. You just need to cut the top rates even more to reach that point!

As every person knowledgeable about economics understands, the biggest problem now with our economy is that the wealthy do NOT have enough money.

When you have reached a reasonable level of wealth, then you too will be able to proudly proclaim the wealthy republicans mottos of:
- More is never enough!
- I've got mine, f*ck you!

Posted by: RepublicanPointOfView on November 18, 2010 at 1:37 PM | PERMALINK

I want to apologize for making it through 3/4 of RepublicanPOV's post before I realized that it was sarcasm. GOP: Too insane to satire.

Posted by: square1 on November 18, 2010 at 1:42 PM | PERMALINK

They not only say this with a straight face, the argument in support of a policy we already know didn't work manages to scare a whole lot of Dems.

Because Dems know that the vast majority of potential voters get their news from corporate media TV which never can spare the time to compare the claims to objective reality. Instead we'll get analysis on how Bristol Palin's status on Dancing With The Stars affects the half-term governor's presidential chances.

Posted by: KevinMc on November 18, 2010 at 1:47 PM | PERMALINK

GAME:

Bush On Jobs: The Worst Track Record On Record - Wall Street Journal 1/9/09

SET:

For Stocks, the Worst Decade Ever - WSJ.com 12/20/09

MATCH:

Aughts were a lost decade for U.S. economy, workers - Wash. Post 1/2/10


Posted by: mr. irony on November 18, 2010 at 1:54 PM | PERMALINK

So, the conservatives' plan on taxes failed, and spectacularly at that.

Perhaps someone should be talking about it on my TeeVee. Maybe someone with a bully pulpit. Who could do that? Hmm.

Posted by: terraformer on November 18, 2010 at 1:56 PM | PERMALINK


Insanity: doing the same thing over and over again and expecting different results.
--Albert Einstein

Posted by: Stephen on November 18, 2010 at 2:26 PM | PERMALINK

the argument in support of a policy we already know didn't work manages to scare a whole lot of Dems.

The donkey, an animal that can administer a pretty strong kick, is an extremely misleading symbol of the Democratic Party. Their logo really ought to be a pack of scared rabbits.

Posted by: low-tech cyclist on November 18, 2010 at 2:26 PM | PERMALINK

And Obama and the Democrats want to keep 70% of that fucked up policy in place. Because we pander to the demographics rather than the contributors. But it is no less fucked up. It is still the same fucked up policy with a little bit of the least defensible shit taken out. Because Obama is just about as gutless as the rest of the Democrats. But then this is probably where the electorate is at. They want their tax breaks. They want their Medicare. They love having this bad ass military. And if we don't get a handle on runnaway gummint spending we're all gonna die.

Posted by: SW on November 18, 2010 at 2:49 PM | PERMALINK

according to "bailout nation" by barry ritholtz, the increase in gdp during the five bush "growth years" [2002-2007], MINUS the activity created by people tapping their home equity lines [which, of course, was only possible because of the price bubble], the average yearly growth number was under 1%....the entire period was a recession...

he also notes the anemic job creation and adds that over 40% of all new jobs were related to the housing industry....and we know how well THAT worked out...

Posted by: dj spellcehcka on November 18, 2010 at 3:02 PM | PERMALINK




 

 

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