The Bush Economy

Editorial - January 17th, 2009 - The Wall Street Journal

Mr. Bush has tried to explain events with one of his populist aphorisms: "Wall Street got drunk and we got a hangover." The remark is ruefully amusing and has an element of truth. But it also reveals how little the President comprehends about the source of his Administration's economic undoing. To extend his metaphor, Who does Mr. Bush think was serving the liquor?

The reality is that few in business truly understand the economy. There is a lot of difference between the skills necessary to run a business and the skills necessary to keep our economy on course. The additional problem is that even our government experts often use metaphors and analogies, which though incredibly complex, still do not really explain reality either. They work for some period in time, but then the true complexity changes slightly and they stop working. Just look at Keynes and the disasters that he ultimately caused.

This decade is also an example. Alan Greenspan and his disciples, Ben Bernanke and Donald Kohn, using techniques that worked well in earlier decades, mis-managed our monetary policy to keep the good times going during the last of the Bush years until the bubble burst. By the time it had burst, it was too late to apply any step by government to fix the problem. However Bush and Paulson tried. They just tried the very worst solution possible.

If we learned any lesson during the great depression, it was that government efforts to fix the problem simply exacerbate the pain. That is what we are doing right now. We are once again taking a recession and turning it in to a depression. We are even doing it with the same misguided and failed techniques that the fascist FDR used; government programs.

Obama is going to spend a fortune hiring government employees to make people create a "green" economy. It will work no better than all of FDRs workfare programs. At the end, government will be bigger, more intrusive, and more fixated than ever on finding scapegoats that they can blame. The rich, white and Christians in our midst are about to become the fall guy for the socialist failures.

George Bush started us down this socialist nightmare road because he was so ignorant of anything about America's business community and America's form of government. His solution was big government bailouts, just like FDR. As this article notes, he still does not understand what he did.