Which Party Ruined the Economy?

Here’s a quick, hopefully thought-provoking post.

Under Pres. Reagan there was a large expansion in the size of the federal government. Who had control of Congress during those years? Democrats. Pres. Clinton gets credit for having a good economy and balancing the budget but who is responsible for making and passing budgets? Congress. Pres. Clinton did the politically expedient thing and worked with the Republicans in Congress to get the budget balanced (although, the budget would prove to be unsustainable because it was based on unrealistic expectations of future tax income; the balanced budget was in trouble starting in late 2000 and early 2001 when a recession hit).

We had a good economy in the 1990s with Republicans in charge of Congress and with a Democrat in the White House. Things went south with the Internet bubble burst in 2000 and 2001. That was the start of a recession made much worse by the events of 9/11. Thankfully, the “Bush” tax cuts (Republicans were still in control of Congress) were passed. They helped shorten the recession. What was not good was passing them and increasing our federal spending. The economy was going along quite well until the housing market crashed in 2006-2007. This was one of the main factors resulting in the biggest recession the U.S. has faced. I’m not going to blame any political party for the recession but I have to point out that Democrats (and many Republicans) helped put in place government housing policies in the 1990s that were factors in the housing bubble burst. Further, Democrats were the ones opposed to regulations Republicans were trying to put in place that might have reduced the housing market crisis. Both parties are culpable for their actions or inactions though.

In 2006 (2007) Democrats took control of the House and Senate. In 2007 the recession officially started. Things were bad with the Republican Pres. Bush and a Democrat majority in Congress. They passed some bailout policies that were weakly effective at best and harmful at worst. Then Pres. Obama took office in 2009 (2008 election). He nearly had a Democrat supermajority in Congress with which to work. It seemed the perfect time to get things done to help the economy but instead of focusing on the economy, or at least trying to stay out of its way (there were other bailouts, some that seemed effective – the auto bailouts – but most have no measurable effects other than a huge deficit), Pres. Obama and the Democrats passed an environmental bill (which no one had the opportunity to read before it was passed) and a gigantic health insurance bill (which also was not read before it was passed).

In 2010, after about 2 years in office, Pres. Obama said he was serious now about the economy. Things were still bad. In 2010 (starting tenures in 2011), Republicans took control of the House and gained seats in the Senate. In 2011 the economy finally started to improve after Democrats no longer had complete control of Congress. It’s still rough but getting better.

What I think is interesting is that the economy seems to flourish when Republicans are in charge of Congress and it seems to flounder when Democrats are in charge of Congress. It also seems that our economy is finally starting to recover in spite of the worst efforts of many Democrats (and many Republicans who either went along or didn’t fight bills enough). It seems like the best course of action would have been either to do nothing or pass smaller, more focused stimulus measures. Tax cuts always work to improve the economy and are usually the best way to stimulate the economy. They just have to be accompanied by a reduction in spending. Basically, the government should get out of the way of the economy and provide focused regulations when necessary.

This post is biased. I wrote it this way on purpose to provide a counter-point to many arguments I have heard or read that praise Pres. Clinton for the good economy of the late 1990s, blame Pres. Bush for the 2007 recession, and praise Pres. Obama for the current economic improvements. There are many people who blame all good things on actions of Democrats and all bad things on actions of Republicans. That’s such a gross oversimplification of who things actually work that it’s not an effective argument (well, it is often effective because many people do not think critically and just accept it as truth). I wrote this post to show that I can argue just the opposite – that poor economies are the result of the actions of Democrats; after all, Congress is in charge of spending and passing laws and our economy suffered the most with Democrats in charge.

What’s the truth? Probably something in the middle (Democrats and Republicans are both responsible). Our federal government is too big and certainly too inefficient. I’d argue that the inefficiency (bureaucracy) is worse than the size of government. We need a Congress and a president who are willing and able to increase the efficiency of the government in part by reducing its footprint.

White House Boosts Deficit Projections – WSJ.com

White House Boosts Deficit Projections – WSJ.com.

The budget deficit was predicted (by the administration) to be $1.752 trillion for the current fiscal year. How much money is that? It’s $1,752,000,000,000. That’s too large a number to really understand. If you took $1 bills and laid them end to end around the earth, you would wrap around the earth 6,477,130,690 times! That’s about 6.5 billion times. That’s still too large a number to really understand. Using the same end-to-end laying of $1 bills, you could travel to the sun and back 865,700.554 times! What that means is that using $1 bills, we could travel 1,731,401.11 AU (astronomical units). That’s 27.38 light years! These are astronomical amounts.

Of course, my use of the length of the U.S. $1 bill was arbitrary, I could have made any number of other comparisons but the point remains the same; that is a lot of money. And that’s just the projected 1 year budget deficit! Of course, that deficit includes additional bailout money Congress might not approve but even so, we’ll have at least a $1.5 trillion budget deficit with another large one next year (and so on for the forseeable future). I’m not even going to broach the subject of the actual national debt.

I appreciate that Pres. Obama and Congress are trying to address the weak economy and the budget shortfalls but right now Pres. Obama seems too much like Pres. Lyndon Johnson trying to escalate the Vietnam War while pushing for his Great Society; it was more than he could handle so he wasn’t particularly successful at either. I’m not saying all of the Great Society programs were bad – many were good – but he was not able to focus on both social and military programs at the same time. He should have done one or the other, not both. Pres. Obama, like LBJ, is trying to do everything. I think he’s more capable than LBJ was but Pres. Obama is not only trying to “fix” the economy, he is trying to create his own Great Society while fighting the War on Terrorism (including two ongoing campaigns – Iraq and Afghanistan). I recognize that Pres. Obama was thrown some flaming torches and asked to juggle them but instead of letting some fall and go out, he decided to keep juggling them all while asking for more.

I applaude that Pres. Obama did not implement his original plan to start taking troops out of Iraq immediately, at least he listened to his military leaders and implemented what is essentially Pres. Bush’s withdrawal plan (although Pres. Bush did not like that word). I think some bailouts were probably necessary, although they should have been much smaller than were approved, but much of Pres. Obama’s “stimulus” or other budgetary monies are going towards social programs at a time when we cannot afford them. Increaing Pell Grants is a nice idea (I know many other conservatives disagree) and as a researcher, I always appreciate having more money available for reserach grants, but this money is borrowed money. It’s not real; we are borrowing against the future for things we cannot afford now. Fix the budget first, then try to work on social programs. We need to cut spending, not increase it.

All politics, all the time – Romney, Cantor say market turmoil mostly to blame for 2008 loss « – from CNN.com

CNN Political Ticker: All politics, all the time Blog Archive – Romney, Cantor say market turmoil mostly to blame for 2008 loss « – Blogs from CNN.com.

Whenever I feel like punishing myself I read comments on CNN.com political stories. They are seriously that bad. I don’t mind intelligent commentary from liberals or conservatives or whomever but there are so few logical, balanced, and intelligent comments that it is painful for me to read, which is why I rarely do. On this particular story, not more than 10% of the comments are from conservative posters. That is the norm for CNN.com stories. Why are only about 10% of comments from conservatives?

I posted a comment a number of hours ago, well before some of the most recent comments. Is my comment on the site? Nope. Hmm, maybe I didn’t submit it correctly. Maybe my 15 year experience with the world wide web does not give me enough skills to successfully interact with websites and successfully submit my comments. That’s probably why my comment went missing.

Or, maybe my comment was too inflammatory. I guess when I set up a straw man and ad hominem attack like the following it is to be expected that my comment would not be posted: “Isn’t it funny that so many liberals comment so frequently on CNN.com stories. Maybe it’s because they are all living off welfare and aren’t doing anything more useful than comment on online news stories while conservatives are out working or at church (since it is Sunday) or otherwise being productive.” Okay, I really did not post that. I didn’t even think of it until just now as I was trying to come up with some completely off-the-wall, ridiculous, and stupid comment for my somewhat sarcastic post.

So what terrible comment did I really post? I replied to the many people who said things like, “This just goes to show that this Dying Old Party has not got a clue” or ” It was because of the Bush Economics [sic] that the economy fell apart”. Mainly I replied to the people who posted scathing, hateful comments that insulted Mitt Romney (and Republicans in general) as well as who said that he was just trying to deny any Republican responsibility (e.g., “The arrogance of this party [Republicans] is revolting. Still not willing to own up to any thing, truly pathetic [sic]”).

This is roughly what I said (I’m expanding on my comment here on my blog). Romney was not denying Republican responsibility. He said, “Republicans and Democrats have been playing this game, passing the hot the [sic] potato, spending money like there was no tomorrow.” All he did was include Democrats in his criticism yet so many people think he’s trying to push the blame onto anybody but Republicans or Pres. Bush (“speaking” of Pres. Bush, here’s a wonderful, hateful ad hominem comment on the story: “The Republicans still don’t get it…They picked a drunk sot, hooker chasing, coke sniffing, moron, loud mouth, scum bag, out of Texas in 2000…”; I guess it could have been worse!).

Romney was simply criticizing the constant fiscal irresponsibility of Washington. Democrats are to blame as well as Republicans. Democrats have had control of Congress since 2006. Congress have the authority to actually pass budgets; they have to work with the executive branch but Congress “pays the bills” (technically, we pay the bills, or actually the Chinese and the rest of the world who loan us the money, but that’s beside the point).

Further, the causes of the economic crisis started in the 1990s (actually, they started a long time ago when we as a people started individually being more fiscally irresponsible, which I believe started en masse some time after WWII). Some people decry the Republicans for not providing enough oversight of Wall Street (hindsight is 20/20, isn’t it? Not that more regulations are the best idea.) while forgetting that many Republicans (including Pres. Bush) pushed for oversight of Fannie Mae and Freddie Mac in 2004 and Democrats refused to vote for that oversight (to be fair – so did some Republicans). Further, in general, Democrats weren’t exactly clamoring for any sort of financial markets oversight. In fact, it was mainly Democrats (including Clinton) in the 90s who pushed (successfully) to force lenders to carry more risky debt by offering mortgages to historically unqualified borrowers (again, Republicans are partially to blame for this too). If you want a cause of the financial crisis, that’s certainly a big part of it.

Romney did criticize Republicans but he also criticized Democrats. He criticized all wasteful spending, regardless of who authorized it. Pres. Bush was a big spender (actually, Congress was the big spender, Pres. Bush just asked them to spend a lot of money; however, Pres. Bush’s spending is “small potatoes” to Pres. Obama’s spending). Unlike what many people believe, Pres. Obama is not spending money (again, it’s really Congress spending the money) to clean up Pres. Bush’s mess – that’s a naive and ludicrous argument; it’s like saying Pres. Bush physically caused Hurricane Katrina (there are people who believe that!) and Pres. Obama has to clean up New Orleans because of Pres. Bush’s hurricane. Republicans in general did not even cause the financial crisis. We (citizens of the United States) all did – all of us who were irresponsible with our money, from the top down and the bottom up! We speculated on speculations of real estate or oil or whatever else we could. We let the government’s size grow out of control and few even tried to stop it; certainly most Democrats didn’t.

That’s basically what I posted (it was much briefer on CNN.com). Yet, my comment did not make it through moderation; however, hateful anti-Mormon comments (e.g., “Romney still does not get it! No one will vote for him a cult member aka MORMON.” [note: that is a direct quote]) and otherwise inane or bigoted comments did. Like I said, I only read CNN.com political comments when I want to punish myself.

Who Will the Michigan Democrats Vote for in the GOP Primary?

It seems odd that Democrats should have the opportunity to play a key role in who wins Michigan’s GOP primacy and potentially the GOP nomination. However, Democrats may never have a better chance. Because Democrats can vote in the Michigan GOP primary and there is no real Democrat race, there is high incentive for Democrats to cast their voice in the GOP contest. The question is which GOP candidate will the Democrats choose?

McCain
If they vote for McCain they will be voting for the candidate which polls show has the best chance of beating Hillary or Obama in November. Voting for McCain will also add momentum to his nomination which is at the verge of critical mass already. Both these options should deter Democrats from voting for McCain assuming they want the Democrats to have the best chance of winning in November and they want to prevent the GOP from identifying their candidate quickly. Nonetheless, McCain is leading the GOP for support from Independent and Democrats in opinion polls. Perhaps many Democrats in Michigan are trying to setup a win-win situation for November: If their candidate loses, at least McCain is more liberal (i.e., moderate) than most of the GOP candidates and will be more palatable as president for them.

Romney
If they vote for Romney they will vote for the main candidate that has one of the least chance of beating Hillary and Obama in November according to current opinion polls. Voting for Romney will also create a three man race which will draw-out the GOP contest, increase tension within GOP party lines and decrease the odds of a strong unified GOP to contest with in November. A few Democrat strategists have advocated this tactic; I would expect at least some Democrats to make this move and vote Romney.

Huckabee
The only reason that a Democrat in Michigan would vote for Huckabee is because Huckabee, like Democrats, is a populist and perhaps they think Huckabee would be a palatable consolation prize if their Democratic candidate loses in November. I find this unlikely as most realize that a populist GOP president is much less likely to have the ability (due to GOP opposition and greater difficulty working across the isles) to fulfill his populist promises as a Democratic president who has most populists on his/her side of the isle.

Thompson/Giuliani/Paul/Hunter
Will these guys ever quit? The writing is on the wall, but I guess they need to spend the money they raised. Regardless, there is no reason for Democrats to vote for them in Michigan there aren’t enough Democrats that will vote in the GOP race to raise them from single digits to compete with the front-runners.

Romney has never had a better chance to win a big contest. Michigan is his birth state, he leads McCain 2-1 among GOP voters there and the questionable politics of the Democrats should be on his side.