September 16, 2012
It's Not Bush's FaultBy Ben Voth
Madeleine Albright recently made headlines responding to a question about when Democrats might stop blaming President Bush for economic difficulties and other contemporary problems. She flippantly responded: "Never." Her comment was symptomatic of our pathological intellectual culture that has been locked now for decades in a mode of denial about the fault lying among anti-conservatives for the nation's ills. Among the most treasured rhetorical heirlooms in this dysfunctional history is the meme "It's Bush's fault."
To be clear, the meme suggests that an array of problems all stem from the presidency of George W. Bush. Most principally, these problems include deficit spending, severe economic recession, unemployment, and global contempt for America. These problems are so profound and so entrenched that no Democrat or team of Democrats could ever hope to extract the nation from this Mariana Trench of political disaster. Mere mortals are slowly dragging the good ship America from this bottomless pit of despair.
The meme is so fiercely repeated that it is rare for Republicans or conservatives to deny that it is at least substantially true. President Bush is regularly dismissed from any public gathering of Republicans as a matter of obedience to Democrats, whom Republicans and conservatives regularly accept as the proper dispensers of political truths. Let's dispatch these misconceptions:
1. President Bush caused the economic collapse of 2008.
This overriding truth is the central reason why President Obama cannot be held accountable for current unemployment and general economic malaise. This falsehood rests primarily upon a rejection of the Democrats' role in causing the economic crisis. In the fall of 2006, the media and associated public culture celebrated the landslide win of Democrats in congressional elections that brought strong majorities in both the House and the Senate. The U.S. Congress holds the exclusive constitutional power over spending. More important, the Congress is charged with oversight roles regarding government economic activities such as Fannie Mae and Freddie Mac. Key leaders such as Chris Dodd in the Senate and Barney Frank in the House received huge campaign support from these GSEs that held the majority of American mortgage finances. Senator Obama was himself a tremendous recipient of campaign funding from Fannie Mae and Freddie Mac.
The purchase of democratic leadership in both chambers of Congress functionally deregulated the speculative U.S. housing market against the repeatedly expressed wishes of the Bush administration. People like Paul Krugman tend to promote the half-truth of "deregulation" causing the crisis but forget to complete the proper object of that regulation: government-sponsored enterprises such as Fannie Mae and Freddie Mac that controlled trillions of dollars in American mortgage equity. The government was not supervising its own interference in the free market. In fact, it was heavily subsidizing the risky schemes of the GSEs. Moreover, those agents had purchased the deregulatory relationship with Congress in the fall of 2006. The housing market in the U.S. devolved into a dangerous leveraged global gambling operation that financed a vulnerable house of cards over European banks. The leadership of Fannie Mae and Freddie Mac knew that the election of Democrats in the House and Senate would prevent any further calls by the Bush administration to tighten the regulations on these dangerous GSEs.
Here is a snapshot of the American economic scene when Democrats took control in January of 2007:
U.S. unemployment rate: 4.7 percent
U.S. 2007 deficit: 160 billion dollars
It is important to gain some perspective on these numbers that described our national economic situation just five years ago. The unemployment rate was half the over ten-percent levels it would rise to under President Obama. Moreover, the long spell of high unemployment under President Obama has made current rates misleading. Much of the slight fall in unemployment under President Obama is attributable to individuals giving up on seeking employment. This is not a productive economic development.
With regard to the deficit, the tax cuts of the Bush administration had in fact produced record tax revenues -- more than $2.5 trillion annually. Today, the government barely takes in $2 trillion. The 160-billion-dollar deficit for 2007 was part of a larger downward trend from the past two years. Today, annual deficits are ten times larger -- surpassing the one-trillion-dollar mark with regularity. Five years ago, the U.S. annual deficit was 90% lower than it is today.
By the fall of 2008, the decline and collapse of the U.S. and global economy were apparent. The financing of American homes saw the evaporation of 6 trillion dollars in values. As President Obama's election alongside a Democratic House and Senate became imminent, the economy steepened and accelerated in its decline.
The markets did not express a sense of relief upon the election of President Obama in early November 2008. What ensued was an economic panic. It was the most rapid and destructive loss of jobs and capital in U.S. history. Our pathological and reactionary intellectual community is eager to blame this on President Bush and denies that business leaders feared the coming onslaught of regulatory and redistributive fervor of President-Elect Obama and his supporters.
2. President Obama helped the United States recover economically from Bush's bungle.
The most decisive component of this argument is the suggestion that President Obama bailed out U.S. car companies and saved the auto industry. This argument is made continuously in election 2012. Fact-checkers and media outlets do little to challenge this myth. In fact, the car bailout was signed into law by President Bush. The man that Obama supporters blame most is the president who can be most credited with saving the American car industry -- or, more accurately, the automakers GM and Chrysler. Our intellectual community feigns ignorance and plays along with the falsehood that Obama saved the auto industry.
GM said this about the bailout from President Bush in December of 2008:
On his campaign website, President Obama describes that success this way:
The plain refusal of intellectual leaders to challenge the falsehood that President Obama made this decision is an effort to assist President Obama in his re-election effort. President Obama did not enact the bailout of GM and Chrysler. President Bush did. Moreover, the effort to pin the praise for this bailout on Obama and the fiscal blame of the costs of this bailout on Bush is the height of this dangerous intellectual propaganda collusion. The Bush bailouts for both the financial industry and the auto industry required the funds to be paid back. In fact, in both bailouts, these funds have been paid back to the Treasury.
Here we find the true audacity of hope. The success of bailouts -- both for the recipients and more importantly for taxpayers -- reflects the fiscal conservatism and successes of the Bush administration. These were temporary emergency funding actions that were paid back by the recipients with interest, and yet the Obama administration counts them as deficit spending actions committed prior to coming to office in January 2009. Yet those temporary emergency funding actions are counted as permanent budget allocations that allow Obama supporters to argue that Obama has increased federal spending less than most presidents. This is like a college student receiving an emergency bailout from parents after he wrecks his car and then insisting that a permanent increase in a weekly allowance now includes provision for a new wreck every week! The Obama budget office has switched the payback funds into general operating expenses of the nation that support his general revisions to stimulus that do not require recipients to repay -- such as the funds for Solyndra.
The failure to confront these twin pillars of rhetorical styrofoam supporting the Obama economic mythology is supremely important. The protracted economic malaise and the collusion of our intellectual community to suggest that the problem is intractable leaves the public believing that there are no solutions. Yet the solutions are self-evident. Capitalized recipients of government aid should expect to pay back emergency funding they receive from the government. This is reasonable and empirically proven by the successful policies of President Bush. Moreover, the government should not count the emergency spending of 2008 and 2009 as a permanent part of the budget process. This makes slashing almost one trillion dollars from the budget a reasonable expectation.
This simple reality explains rather readily why Senate majority leader Harry Reid has refused to pass a budget in three years. This is a way of hiding an emergency provision as a permanent addition to the budget in the beltway. The United States can recover from this crisis, but we will need to confront not President Bush or President Obama, but the intellectual culture that weaves these dystopian fairy tales and so darkens our shared American dreams.
Ben Voth is the chair of communication studies at Southern Methodist University and the director of debate.
FOLLOW US ON