Paul Krugman on G.W. Bush & U.S. economy

Written by  //  August 29, 2008  //  Economy, Public Policy  //  1 Comment

Feeling No Pain
PAUL KRUGMAN
(NYT) My first reaction to Bill Clinton’s convention speech was sheer professional jealousy: nobody, but nobody, has his ability to translate economic wonkery into plain, forceful English. In effect, Mr. Clinton provided an executive summary of the new Census report on income, poverty and health insurance — but he did it so eloquently, so seamlessly, that there was no sense that he was giving his audience a lecture.
My second reaction was that in Mr. Clinton’s speech — as in the speeches by Hillary Clinton and Joe Biden (this column was filed before Barack Obama spoke on Thursday night) — one heard the fundamental difference between the two parties. Democrats say and, as far as I can tell, really believe that working Americans are getting a raw deal; Republicans, despite occasional attempts to sound sympathetic, basically believe that people have nothing to complain about.
As it happens, the numbers support the Democrats.
That Census report gives a snapshot of the economic status of American families in 2007 — that is, before the financial crisis started dragging the economy down and the unemployment rate up. It’s a given that 2008 will look much worse, so last year was as good as it will get in the Bush years. Yet working-age Americans had significantly lower median income in 2007 than they did in 2000. (The elderly, whose income is supported by Social Security — the program the Bush administration tried to kill — saw modest gains.) Meanwhile, poverty was up, and health insurance — especially the employment-based insurance on which most middle-class Americans depend — was down.
But Republicans, very much including John McCain and his advisers, don’t believe there’s a problem.
Former Senator Phil Gramm made headlines, and stepped down as co-chairman of the McCain campaign, after he described America as a “nation of whiners.” But how different was that remark, really, from Mr. McCain’s own declaration that “there’s been great progress economically” — progress that’s mysteriously invisible in the actual data — during the Bush years? And Mr. Gramm, by all accounts, remains a key economic adviser to Mr. McCain.
Last week John Goodman, an influential figure in Republican health care circles, explained that we shouldn’t worry about the growing number of Americans without health insurance, because there’s no such thing as being uninsured. After all, you can always get treatment at an emergency room. And Mr. Goodman — he’s the president of the National Center for Policy Analysis, an important conservative think tank, and is often described as the “father of health savings accounts,” a central feature of the Bush administration’s health policy — wants the next president to issue an executive order prohibiting the Census Bureau from classifying anyone as uninsured. “Voilà!” he says. “Problem solved.”
The truth, of course, is that visiting the emergency room in a medical crisis is no substitute for regular care. Furthermore, while a hospital will treat you whether or not you can pay, it will also bill you — and the bill won’t be waived unless you’re destitute. As a result, uninsured working Americans avoid visiting emergency rooms if at all possible, because they’re terrified by the potential cost: medical expenses are one of the prime causes of personal bankruptcy.
Mr. Goodman has in the past, including in an op-ed for The Wall Street Journal, described himself as an adviser to the McCain campaign on health policy. The campaign now claims that he is not, in fact, an adviser. But it’s a good bet that Mr. McCain’s inner circle shares Mr. Goodman’s views.
You see, Mr. Goodman’s assertion that lack of health insurance is no problem precisely echoed what President Bush said a year ago: “I mean, people have access to health care in America. After all, you just go to an emergency room.” That’s because both men — like Mr. Gramm — were just saying in public what modern Republicans say when they talk to each other. Despite attempts to feign sympathy, the leaders of today’s G.O.P. fundamentally feel that Americans complaining about their economic and health care difficulties are, well, just a bunch of whiners.
And that, ultimately, even more than their policy proposals, is what defines the difference between the parties.
It’s true that elected Democrats are often too cautious — and too beholden to major donors — to be as progressive as the party’s activists would like. But even in the face of a Republican Congress, Mr. Clinton succeeded in pushing forward policies, like the State Children’s Health Insurance Program, that did a lot to help working families.
And what one sees on the other side is a total lack of empathy for and understanding of the problems working Americans face. Mr. Clinton, famously, felt our pain. Republicans, manifestly, don’t. And it’s hard to fix a problem if you don’t even think it exists.

 

http://matthewyglesias.theatlantic.com/archives/2008/01/responsibility_knocks.php

GDP Growth:

INSERT DESCRIPTIONEnvious presidents?

 

Employment growth:

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 Poverty rates:

poverty_cs_20080826113720.jpg

 (“What Happens to Income and Poverty in 2008?,” WSJ Real Time Economics Blog, August 26, 2008)

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Housing prices:

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Oil prices:

INSERT DESCRIPTIONGreater fuel theory


Bush expansion vs. average post WWII expansion:

Bush boom

Berkeley economist and former Clinton Assistant Treasury Secretary Brad Delong on John McCain’s economic policies (“John McCain and the Decline of America“):

Back in 1981, America’s Republican Party gave up all belief that the government’s budget ought to be balanced. The idea took hold that tax cuts should be undertaken all the time, at every opportunity, because reducing taxes supposedly raised revenue.
Irving Kristol, sometime editor of the magazine The Public Interest and one of the intellectual midwives of this idea, later wrote that he was interested not in whether it was true, but in whether it was useful. Years later, he spoke of his “own rather cavalier attitude toward the budget deficit and other monetary or fiscal problems. The task…was to create a new…conservative… Republican majority – so political effectiveness was the priority, not the accounting deficiencies of government…”
Now it has become clear that John McCain – who once criticized George W. Bush’s tax cuts as imprudent and refused to vote for them – has succumbed to this potion. He appears to be proposing further tax cuts that promise to cost the United States Treasury some $300 billion a year, to “offset” them with cuts in earmarked spending accounted for at $3 billion a year, and somehow to balance the budget.
We know the consequences: McCain’s fiscal policy is likely to be standard Republican fiscal policy – and since 1981, standard Republican fiscal policy has increased the ratio of gross federal debt to GDP by nearly 2% per year. By contrast, a typical post-WWII Democratic administration has reduced the debt-to-GDP ratio by more than 1% per year. This is one of the issues at stake in this year’s presidential election.

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One Comment on "Paul Krugman on G.W. Bush & U.S. economy"

  1. mrinternet September 17, 2008 at 6:36 am · Reply

    Excellent compilation of data to support a perspective rarely seen by most Americans. I will use your data with due credit for upcoming article I am currently researching (which is how I found you).

    Keep up the great work and I am going to keep your perspective at the top of my list of great resources.

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