Bush's biggest economic errors
I have a new TIME.com piece up about George Bush's eight biggest economic policy errors. It begins here, but it's one of those irritating (but multiple page-view generating) galleries, so if you'd prefer to consume al a carte, here are the eight erroneous zones:
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1
in your article, you state...It's not all Bush's fault. He inherited an already-inevitable recession in 2001
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what, exactly, do you think made the recession "inevitable". Here's a clue -- there was almost no talk even a possible recession right up through the 2000 election -- indeed, both Bush and Gore never mentioned a possible recession during the campaign, and both based their proposals for 2001 on continued economic growth.
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what actually happened was "uncertainty" caused by the Florida election fiasco had an economic impact, reducing growth rates. But what really made the recession "inevitable" was Bush announcing that a recession was coming almost immediately after Florida was "resolved"; -- the slower economic growth made his proposed tax cut agenda look like a bad idea, so he decided to switch the rationale for those cuts, and declare that a recession was coming.
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Indeed, that declaration should have had a place in your list, because it did two things:
1) Businesses that had been basing their plans on continued economic growth wound up holding off on implementing their plans
2) Consumers cut way back on their Christmas shopping -- leaving retailers with enormous amounts of products on their shelves, and less cash available, forcing them to cut orders for spring and summer merchandise.
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Basically, this was an "instant recession" -- one that practically no one was predicting, and one that needn't have happened. -
2
Really? That recession seemed pretty inevitable to me, even as a college student. The stock market had skyrocketed and my dormmates were graduating with incredible stock portfolios. For some reason, the great selloff right after the millenium just seemed to come naturally, and I wasn't surprised at all by it.
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3
@plukasiak: A tech slowdown over the summer of 2000 began to turn into a broader business pullback in October or November. The economists--and the politicians--generally didn't see it coming. But then they usually don't. I guess it's possible that Bush made things worse with his statements, but from the perspective of somebody who was following business and not politics in those days it didn't seem all that significant, and I don't really see how we could have gotten through the collapse of such a gigantic investment bubble without at least some kind of downturn.
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4
I was squarely in the middle of the tech industry in 2000 (and am still approximately there in 2009). Everyone in tech knew this was going to end badly, and soon. The question was who was going to be able go get out before it happened.
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5
as I noted above, the rate of growth was slowing in the summer and fall of 2000, but the talk was about a "soft landing". Bush's pronouncement about an inevitable recession turned the soft landing into a thud of a recession.
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its important to note that Bush's tax cut proposal (which was based on continued strong growth in the economy, NOT stimulating the economy) remained the same -- it was never designed as a stimulus, he just wanted it passed, and used the word "recession" to accomplish that when it turned out that the strong growth numbers he was relying on didn't happen. (Congress forced changes in Bush's proposal that was designed for "stimulus' effect.) -
6
Yes, but apart from that, what did you think of the presidency?
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