July 03, 2003
BUSHONOMICS....Not for the first time, Brad DeLong is puzzled by the fact that the Bush administration is manifestly pursuing economic policies that won't help the economy much,
despite the fact that a good economy would be a considerable benefit to
their reelection hopes. (Oh, and good for the country, too!)
I figure there are five possibilities here:
Despite abundant evidence to the contrary, they really do
believe that their policies will provide a strong short-term stimulus
to the economy. After all, they believe in creationism, so why not this?
They are so ideologically wedded to lowering taxes on
capital that they'd rather cut taxes than stimulate the economy, even at
the possible risk of losing the election.
They take the principled view that the president doesn't
actually have any effect on the economy at all, so why not just do what
they want anyway and hope for the best?
On a related theme, they figure their reelection depends only on whether people think they've tried hard. As long as the public sees plenty of activity, they will forgive a lack of results.
Karl Rove believes that Bush's reelection primarily
depends on fundraising. Cutting taxes on the rich brings in lots of
campaign cash, and that's all that really matters.
I'm sure there are other possibilities too, but that's
all I can come up with off the top of my head. The part I can't figure
out is, which of these possibilities is the scariest?
Posted by Kevin Drum at July 3, 2003 02:46 PM
6. Rove has decided that the election will be won or lost on national
security. Bush is going to run on the war and on his (undeserved)
image as a tough guy. The economy will be attributed to terrorist
attacks and Clinton. Since their strategy does not depend in any
substantial way on the economy improving, they're ramming through their
tax cuts while they can.
7. They know that computerized voting will give them the election no matter how people vote so why worry?
8. They're hoping to build a reverse image of FDR's longterm domination of the system, built around corporatism versus govt.
1. Ideologically deluded. "Idiotological"
8. No one who knows any better is listened to in this administration.
PS: My favorite part of Brad's comments have to do with the fact that
Mankiw is now acknowledging that maybe we aren't going to create 5.5M
jobs by 12/04. Amazingly, they didn't realize this until after they
pretended that the second tax cut would create 1.4M of those jobs. What a
If you want to keep score at home, take a look at Dr. Max's comments here:
"Greg Mankiw. Your office is calling"
I choose 4. May I pimp Demosthenes here? He says, on the Iraq war,
"Bush is discovering that just because something is good politics
doesn't negate it being bad policy, and that bad policy can only be spun
so far before problems start cropping up.... [big snip] Sooner or
later, bad foreign policy becomes bad domestic politics." Change
"foreign" to "economic," and I think this is dead on.
I think Bush's Admin views things in terms of political
victories--sticking it in the Democrats' eye. They rammed through the
Iraq war by saying it was about WMD and Al Qaeda, and they've rammed
through tax cuts by saying they're about jobs. The thing is, they
weren't, and people are beginning to notice the facts on the ground--no
WMD, a messy occupation, no jobs.
4.5 They realize that much of the federal government's ability to
'jumpstart' the economy is a myth, so if they look like they are doing
something they will get to take credit when the economy bounces back on
I think all 5 are true to some extent, but I love number 1 "They believe in creationism, so why not this?"
I think that's just about perfect.
1 and 3 just don't seem plausible. 4, 5, and Realish's 6 probably enter into Rove's calculations.
I'd propose a different take on 2. A lot has been written about GWB
"learning from his father's mistakes," and always in the context of
avoiding defeat for re-election. But GHWB's huge post-1992 loss of
status among his peers came only in part from losing the White House. He
was also held in low esteem for doing so little with the Presidency
while he had it. William Domhoff's "Who Rules America?" (1998 edition)
includes a fascinating account of GHWB's subtle but unmistakable
humiliation at the 1993 Bohemian Club festivities, which treatment
caused him to leave the famous Grove in anger and ahead of schedule.
GWB doesn't intend to lose in '04. But lose and be seen as a do-nothing, like his father? Unthinkable.
Shouldn't your reason be 3.5, since it is halfway between Kevin's number 3 and number 4?
Joshua's point 8 seems to be on to something. At times the Bush
administration seems to have a long term agenda and only snap back to
near focus for tactical needs.
Kevin's point 4 seems relevant as well. The appearance of tactical
action is important since people are impatient, often unwilling to wait
for strategic results, and prone to hijack by demagogues promising
"On a related theme, they figure their reelection depends only on
whether people think they've tried hard. As long as the public sees
plenty of activity, they will forgive a lack of results."
Hey, it worked for FDR.
Since the economy will probably bounce back by 2004, stimulus or no
stiumulus, they might as well go with policies that they think will help
growth long term. Permanent tax cuts fit in with that plan. (So would
permanent spending cuts, significant deregulation, and lowered trade
barriers, but those have been sadly neglected). Dress them up as
"stimulus" to placate all the folks that think we need one, and they're
good to go.
"Karl Rove believes that Bush's reelection primarily depends on
fundraising. Cutting taxes on the rich brings in lots of campaign cash,
and that's all that really matters."
The Republicans get more of their money from small-time donors than
the Democrats do. Cutting taxes on "the rich" isn't going to bring
hordes of $2000 donations from the middle classes, unless (a) the middle
classes are getting a cut, or (b) the middle classes expect to benefit
some other way. In this case, (a) and (b) are both contributing
It is #5.
Isn't that totally obvious? Hello??
"The Republicans get more of their money from small-time donors than the Democrats do. "
Show me numbers, because I don't think I believe this.
"Cutting taxes on "the rich" isn't going to bring hordes of $2000 donations from the middle classes"
No, but it WILL bring them in from the rich. One $2000 check from
each of the richest 100,000 people in America, and holy hell, there's
George's $200 million we've all been hearing so much about. (blah blah, I
know, everyone with that kind of money isn't going to give. You get the
"The Republicans get more of their money from small-time donors than the Democrats do."
I can't source that, but I believe it's true. Weird. All those Red states.
Remember that Bush's "God Squad Blue Club" or whatever the hell it's
called is composed of corporate donors who, through some not-so-subtle
encouragement, get the 1000s of people who work for them to donate $2000
Rich people can do more to affect an election than just write their little check. They can influence the little people.
I would lean toward the historian Barbara Tuchman's theory, expounded
in "The March of Folly: From Troy to Vietnam," where she describes a
historical phenomena that she calls "woodenheadedness" in describing the
abject stupidity of decision-makers' actions despite substantial
evidence in place that such actions would create an undesirable result.
The book is here:
My two cents…….
What about this options [or is it encapsulated in others]?
- "Tax cuts for everyone" [it's your money; you deserve it not the
gov't] is good PR period. Whether or not it actually helps anyone.
N+1. Groupthink. The Bush administration has started to believe it's own propaganda. It happened with Iraq, why not this?
the economy will probably bounce back by 2004
That's one elastic economy, bouncing back that far that fast. Or do you just mean that we'll gain back some
of the millions of jobs we've lost since Bush came into office? Hm, 16
months until November 2004 * 100k jobs / month = 1.6 mil. That would
only be about a third of the jobs that have disappeared since Bush came
into the office, with no power to affect the short-term economy, as you
seem to imply. Think it will happen spontaneously, as a natural force
of nature? Or just because the private sector is in such good shape,
and ready to start taking on workers?
I think you are saying that Bush can affect the long-term with
his many tax cuts, though; I hope that distinction between long and
short doesn't get blurry and confuse me. By the way, how many years
down the road are the tax cuts going to start helping us?
Dress them up as "stimulus" to placate all the folks that think we need one
Excellent! Deceive the stooges in the electorate who can't
understand the subtle distinction between the short and long terms. The
salt-of-the-earth types, simple-minded common folk, seem to have taken
our bait, and our plan is working just as we predicted. Soon, the
economy will get better all on its own, and we shall reap the glory due such skillful deceivers!
As I've already been pimped, I guess I'll jump in.
I vote "5.5", which is that Rove has realized that it's about fundraising, and about defining reality.
(Not spin... it goes further than that) He's realized the
postmodern/poststructural lesson that people relate to the world through
stories and narratives, and has long since figured out that they don't
necessarily have to correspond with reality... they just have to be
Actually, his job isn't hard. You just work the media to ensure that
they define issues, people, and the conventional wisdom the way you
want. Best way to do that is to function as their chief source of
information, create/exploit spin factories indistiguishable from "real"
news (Faux News, anyone), have allies charge that any attempt to portray
an interpretation aside from your own is "bias" so that the "objective"
position is closer to yours, and feed them the personalized stories
they so desperately crave. As long as it's all internally consistent and
the money spigots don't dry up, you're gold.
Problem is, you've got to ensure it doesn't wander too far away from reality, and ideology has a way of making that happen. If that happens to Bush, he's screwed.
(Un?)fortunately, that just might be exactly what's happening..
By the way, thanks Matt. (And for those who are at all curious, I've
been harping about that "defining truth" thing for the last little
while, most notably here).
(And yes, Kevin, I'll let you blatantly hijack one of my own comments sections too, if you want equal time.)
Partially #5, but principally none of the above. Bush and Rove admire
the Haitian economy, with its small but all-powerful rentier class and
its ready supply of servants. They hope to recreate it here.
9. The MBA approach:
The country's going under, so let's loot its assets before it does.
And if it's not going under, it will be after the looting.
This administration's economic policies are based solely on the
lessons of recent GOP presidential history as perceived by Bush, Rove,
1) Reagan cut taxes and was re-elected. Bush Sr. raised them and
lost re-election. Reagan pleased his base. Bush Sr. angered his and
they deserted him at re-election time. His son will never allow that to
happen to himself. Lesson learned: Cut taxes on the top brackets no
2) Both Reagan and Bush Sr. created huge deficits, but the electorate
didn't care. The centerpiece of Mondale's 1984 campaign was that he
would raise taxes to eliminate Reagan's deficits. Mondale was crushed
in one of the biggest landslides of all time. Deficits were eventually
eliminated later by Clinton who raised taxes which helped the GOP retake
Congress in 1994. Lessons learned: deficits don't matter to
re-election, raising taxes is death, and if necessary someone else can
fix the long-term problem by raising taxes after we're gone.
3) Reagan had a recession very early in his term and a recovery was
apparent by re-election time. Bush Sr. had a late-term recession and
recovery came too late to help with his re-election. A recession began
soon after Bush Jr. took office so ergo the economy should bounce back
in time to improve his chances in 2004. Lesson learned: Early
recessions mean the business cycle will take care of the problem and we
can do whatever we want.
4) Greenspan's refusal to lower interest rates during Bush Sr.'s term
to allow a (timely) recovery helped cost Bush Sr. re-election. In Bush
Jr.'s term, Greenspan has consistently lowered interest rates which
should allow for a timely economic boost. Lesson learned: If
Greenspan's on board, we're fine.
5) Bush Jr.'s economic policies not only please the base, but have
the additional benefits of rewarding his donors and creating good sound
bites for the 2004 campaign. Lesson learned: We'll have so much money
to buy so many commercials touting our tax cuts while painting the Dems
as "tax and spend" liberals that we can't lose.
Geez Kevin, your reasoning skill would have Brad DeLong pulling out his hair.
On number 5. Karl Rove believes that Bush's reelection primarily
depends on fundraising. Cutting taxes on the rich brings in lots of
campaign cash, and that's all that really matters.
Except for those un-bid contracts that give away the reason why Bush
gets those high dollar funds...Companies are buying government decision
Americans can see this too.
And also you and Brad already know why Bush is doing what he is
doing. It's because Bush is responding to his campaign contributors
wishes NOT the American citizens. It's what Bush's campaign
contributors want and paid for and YOU KNOW THAT.
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