Dubya's mad-dog economics

Who says this surplus-squandering hothead is "conservative"?

Published March 16, 2001 9:00AM (EST)

Now he gets it.

On Wednesday President Bush took a break from defending his flip-flop on carbon dioxide emissions to send a shout out to the ailing American economy.

"I've got great faith in our economy," Bush said, sounding a little like he does every time Dick Cheney has a heart "procedure" -- optimistic but not terribly informed about the exact details of what's wrong with the patient.

But the real question is, does the economy have great faith in Bush? The new president can't be blamed for all or even most of the market's woes, but it's hard not to notice how much worse things have gotten since last Nov. 7. Since Election Day, the Dow has dropped from 10,952 to just over 10,000 on Thursday, while the NASDAQ lost almost half its value, dropping from 3,415 to 1,940. Even before the Supreme Court made Bush president, he and his administration-in-waiting never missed an opportunity to sound the wrong note on the economy, out of political opportunism, ignorance or some combination of the two.

The Florida ballots were still being recounted, you'll recall, when Bush began talking darkly about an economic downturn, laying the groundwork for blaming any possible recession on his predecessor. Meanwhile, the Bush family's Florida fixer, James Baker, warned that the post-election gyrations of the stock market were due to the electoral instability brought on by Al Gore's demand that we count every vote. Then Cheney hit the political talk-show circuit to argue that the economy might be "on the front edge of a recession," to build support for the stimulus of a big Bush tax cut. Given that the stock market is prone to falling at the slightest hint of bad news from on high, the bad-mouthing was economic and political malpractice.

On Wednesday, Bush finally changed his tone on the economy -- sounding a positive note, oddly, on a day the Dow and NASDAQ dived, and a recession indeed began to loom like a real threat -- "because he has a direct understanding that what is happening in the markets affects real lives," his staff told the New York Times. (The anonymous Bush staffer assigned to explain his inscrutable statements -- like the one who insisted "That's how the president speaks" when Bush said North Korea was violating agreements it hadn't even made -- has become a staple of Times stories.) It seems more likely that Bush has figured out that the real lives and real worries of Americans affect the markets, and his doom-saying could become a self-fulfilling prophesy. Either way, once again, he's learning on the job and finally starting to understand the role the president can play in keeping economic panic at bay.

His predecessors learned on the job, too. President Clinton screwed up early in his first term by questioning the value of the dollar, throwing currency markets into disarray. That was one of Clinton's rare stumbles when it came to the economy. Elected on a platform of expanding government investment, Clinton switched courses once in office and made deficit reduction his top goal, after a post-election roundtable with top economists and business leaders managed to change his mind about the role of the deficit in dampening economic growth.

There's been no such change of mind over in Bush land, where the slogan seems to be "A mind is a terrible thing to open." Bush's own post-election economic hoedown was a tony Who's Who of industry titans who backed him, where never was heard a discouraging word about his plan to slash taxes and reward the wealthy individuals and industries that supported his presidential campaign.

There's no consensus about what will keep the current downturn from evolving into a full-blown recession. But the economic brinkmanship behind the Bush tax cut proposal can't help but be a factor. Almost to a person, economists agree the cut can't be defended on economic-stimulus grounds, since it kicks in too late to make a difference in the current downturn. And relying on a surplus that may quickly evaporate -- especially now that the plummeting stock market will no doubt depress tax revenues too -- seems especially irresponsible today, a move that's almost certain to return the country to the days of Reagan-Bush era deficits.

It's also worth asking whether worries about Bush's competence are worsening the current economic malaise. Everyone expected Cheney and Co. to be running the show, but it's Bush himself who's out in public every day, making loopy statements that need to be explained by his handlers. And if things really do go wrong, and the Reagan model of massive tax cuts and give-backs to the rich doesn't work, does anyone have confidence that Bush will have the intellectual capability and grasp of the issues to chart a new course?

Clearly, if the economy continues to falter, and Bush gets his way with tax cuts, there will be nothing to soften the pain for the losers in our winner-take-all economy. The last recession, of course, was presided over by Bush père. And the prosperous Clinton years may now be bookended by another Bush recession. You'd think that the GOP would have learned its lesson about the dangers of deficits by now. But these days conservatism has come to stand for mad-dog economics.

You can say this about conservatives: They're smarter and better organized than liberals. On Bush's right, his allies are plumping for even bigger tax cuts -- intending, no doubt, to make their president look like a moderate by comparison. But what they're not is true conservatives. They're shirking their responsibility to conserve the nation's resources, to hold off on rewarding themselves and their wealthy friends until we know that projected surpluses will actually materialize.

By Joan Walsh

Related Topics ------------------------------------------

Dick Cheney George W. Bush Great Recession U.s. Economy