Thursday, February 01, 2007

In The Shadows of Iraq

Bush's Real Record

Posted 1/31/2007

Economy: The mantra among critics of President Bush is that he's been "incompetent" as chief executive. To which we respond: Looked at the U.S. economy lately?

In his "State of the Economy" speech Wednesday, Bush expressed justifiable pride in his economic accomplishments. Our good friend Larry Kudlow keeps calling it "the greatest story never told." And indeed it is.

The Bush-is-a-failure mantra is, quite simply, out of touch with reality. What the economy's done in the past six years, especially in view of what Bush faced on entering office, has been nothing short of remarkable.

Remember that first bleak week, way back in January 2001? The economy was in a free fall, with job growth having peaked in mid-summer 2000. During Bush's first quarter in office, the economy actually shrank.

This wasn't surprising, given the Fed had been ratcheting up interest rates for two years and the stock market had just suffered its biggest meltdown. Americans took a $7 trillion hit from that debacle, and some feared we might even slide into a depression.

Then came the first attack on U.S. soil since Pearl Harbor, killing 3,000 people, costing $100 billion in direct costs to the economy and untold billions more in indirect costs, and damaging the national psyche. People stopped flying and buying. They cocooned.

It was the worst first year for a president since FDR. But Bush turned a potential disaster into one of the success stories of the post-World War II era. Yet few credit him for it.

His three tax cuts pushed 5 million mostly low-income families off the tax rolls and substantially shifted the tax burden toward the rich. Despite harsh criticism, the cuts revived the economy.

Where are we today? "Across our nation," Bush said Wednesday, "small businesses and entrepreneurs are creating millions of new jobs. Retail sales are up, consumer spending is strong, exports of goods and services have jumped by nearly 35%. The Dow (industrial average) has set records 26 times in the past four months. Productivity is strong, and that's translating into higher wages."

Every word true. And yet, our newspapers and TV talking heads are obsessed with stories of mass "inequality" and "middle-class squeeze" and "jobs shipped abroad" and "falling behind."

Reality is quite different, of course. But reality can never be permitted to get in the way of Bush-bashing — the stock in trade of the mainstream media and their allies in the Democratic Party.

So what's the real record? Since Bush's tax cuts took effect in mid-2003:

• Real gross domestic product is up to $1.33 trillion, or 12.6%.

• Existing businesses have hired 5.9 million workers (not counting the millions of jobs entrepreneurs have created).

• Corporate profits have soared 91% to $1.6 trillion.

• Tax receipts have leapt $503 billion, or roughly 1.1 percentage points of GDP, refuting the notion the tax cuts "caused" deficits.

And thanks to rebounding stock prices and huge gains in home values, Americans' total wealth has soared 39% to $54 trillion — the biggest expansion ever.

After such a stellar performance, a breather — what economists call a "midcycle correction" — would be in order. Yet the economy continues to power ahead.

In 2006's final period, GDP growth was 3.5%, and it has averaged 3% since the tax cuts. Real wages rose 1.7% in '06, much faster than the 0.3% average of the Clinton years. In just the last 12 months, unemployment plunged from 5.0% to 4.5%, near postwar lows.

More of us have jobs, own homes and businesses, and work for higher pay than at any time in history. We're the richest people on earth. For a change, let this story be told.

Those who have opposed this President from the very beggining love to label his entire administration as a "failure", but will history view him as such?

It is of course too soon to tell. Not only in regards to the situation in Iraq, which is teetering on the brink but not over, but also in regards to his domestic policies, which so far, have garnered very positive results, as well as his sucess in protecting the country and tracking down Al-Queda.

So if Iraq had never happened, or if by some miracle, we can end the fighting there and we end up with a stable government in that country, isn't the legacy of the Bush presidency thus far, incredibly positive?

Bill Clinton's entire legacy is based on three things. The amazing economic growth of the late 90's, scandal and his lacking response to events which led to 9/11.

This Administration's legacy should be based on more than the mistakes made in Iraq, and we should not even begin forming that legacy in our minds and especially in our media, until the four years in office which the President earned, have come to a close.

Sphere: Related Content


Shannonymous said...

But what about the national debt? (I'm honestly asking, not trying to be snarky.)

Anonymous said...

Cool blog man, I posted a link.

Good question Shannon, but deficit economics are quite complicated. We had a huge deficit under Reagan, but a vibrant economy. That's a good subject for discussion though.

Falling Panda said...

The national debt, which is now estimated at about $9 trillion, has been growing for the last 25 years and is something that we should remedy, but not at the expense of economic growth.

Some fear that a nation like China, which holds a large part of our debt could call a big slice of it in, and cripple our economy.

However, this is unlikely, as their economy is relient on our consumers in order to survive.

Anonymous said...

"I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."

Read the Patriot Act lately?

Didn't think so.