The economic expertise of Republicans

Back during the 1980 presidential campaign, Ronald Reagan got lots of political mileage out of the sloganeering description of much government spending as "Waste, fraud and abuse," making it appear that our government had a single line item "WFA" that could be easily eliminated. Well, investigators have concluded that Iraqi reconstruction accounts for at least $125 billion worth of "WFA."

He said bribes of tens of thousands of dollars were regularly delivered in pizza boxes sent to US contracting officers.
In one case, an American soldier put in charge of reviving Iraqi boxing gambled away all the money but he could not be prosecuted because, although the money was certainly gone, nobody had recorded if it was $20,000 or $60,000.
In many cases, contractors never started or finished facilities they were supposedly building.

As Digby points out about those who are criticizing the American Recovery and Reinvestment Act:

The people who are now keening over "reckless spending" are the same ones who blindly sent pallet-loads of shrink wrapped hundred dollar bills to a war zone and didn't bother to keep any records.

Even if we put aside the arguments of WFA, the pure, blatant plunder involved in the war, there is still the constantly escalating cost of the Iraq War. It's not entirely clear what the increase in money is for, whether it's for the greater use of airpower or payments for mercenaries, but the cost-per-month has been rising steadily, from nearly $5 billion per month in 2003 to over $11 billion per month in 2007.

The Bush Administration has had other financially-suspicious problems.

When reviewing the record of July and August of 2001, Bill Bergman noticed a $5 billion surge in the currency component of the M1 money supply—the third largest such increase since 1947. Bergman asked about this anomaly—and was removed from his investigative duties.
Those who follow the history of the 9/11 fact-finding movement know that there is a laundry-list of unanswered questions that are just as compelling as those put forth by Bergman.

George W. Bush ran two oil companies as a private citizen back during the 1980s, Arbusto and Spectrum 7 and was on the board of directors for Harken Energy, altogether equaling about four years of deep involvement with energy production. Oil prices remained relatively stable until he took office and then really started rising about the beginning of 2003 and reaching a peak at the end of 2008. They then dropped precipitously. Apparently, Bush never had a clue as to why that was. In April 2008, he said:

"I think that if there was a magic wand to say, "OK, drop price,' I'd do that. ... But there is no magic wand to wave right now."

The idea that Bush couldn't fix the high price of oil is something I find entirely credible. What I do not find credible is that someone so deeply involved in energy somehow didn't have a clue as to why oil prices were as high as they were. My own suspicion is that his constant saber-rattling towards Iran had an absolutely huge amount to do with it. As to the effect that the oil price rise had on the economy, a Congressional Budget Office (CBO) paper from July 2006 (PDF) showed that

Households’ income and spending were both affected by the rise in energy prices. The growth of real hourly compensation slowed (the result of a slowdown in nominal wage growth combined with the increase in inflation). At the same time, the average household’s annual spending on energy goods and services rose by about $1,700 between 2003 and mid-2006, and their saving rate dropped sharply.

Other, macroeconomic effects were more modest, effecting the US economy by a quarter to a half of a percentage point. Corporations were significantly less affected than households were. The CBO study lists a few foreign problems and adds:

In addition, worries about the potential consequences of international objections to Iran’s nuclear program may have caused some oil businesses to stockpile part of their supply in recent months rather than sell it.

In his State of the Union Address for 2007, Bush announced:

For too long, our nation has been dependent on foreign oil. And this dependence leaves us more vulnerable to hostile regimes and to terrorists who could cause huge disruptions of oil shipments and raise the price of oil and do great harm to our economy.

This entirely accurate assessment was, unfortunately, not followed up with any significant action. A year and a half later, New York Times columnist Thomas Friedman described Bush's energy policy thusly:

It is hard for me to find the words to express what a massive, fraudulent, pathetic excuse for an energy policy this is.

Bush accurately identified the problem, but did nothing to solve it.

Bush's big priority upon taking office in 2001 was tax cuts. Throughout the debate over the 2009 American Recovery and Reinvestment Act, "tax cuts" were the Republican answer to everything. How did that 2001 tax cut work out? Paul Krugman put together a chart showing the effects of the Bush tax cuts of 2001 and also of 2003. The effects of the tax cuts? Negligible. If Krugman didn't mark where the tax cuts occurred, we'd never have known that anything had been done. And actually, the Clinton tax increase of 1993 appears to have had a serious positive effect.

What's the really primary economic problem of the day? Economist Dean Baker of the Center for Economic and Policy Research (CEPR) tells Congress (PDF) that the housing bubble is. He dates it from 1996 to 2006, so yes, the problem originated during the Clinton Administration. In a round table with CNBC (Video), Baker places the bulk of the blame squarely on Alan Greenspan's shoulders. And what was Republican Senator John McCain's opinion of Greenspan's expertise?

“I want to set up a committee headed by Alan Greenspan, whether he’s alive or dead, it doesn’t matter,” he said, prompting laughter from the crowd. “If he’s dead, we’ll prop him up and put dark glasses on him, like in ‘Weekend at Bernie’s.’”

So, do Republicans have any credibility when it comes to the economy? Can the party make the slightest claim to expertise? Sorry, but no.

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