Maybe we should let them have it. With the news today that Ben Bernanke elected to slash interest rates by another fifty basis points (making it 125 in eight days), leaving the federal funds rate scraping bottom at three percent, it seems clear to me that the Bush administration is well aware that a Democrat will win the 2008 election. They are so confident of this, in fact, and so politically cynical, that they are trying to wreck the country before that happens so that we have to clean up the resulting economic and political mess. Even Alan Greenspan, who created the real estate bubble by encouraging Americans and America to continue borrowing and spending in good times and bad, never played with our money supply with such cavalier disregard for the long term impacts.
As we plunge into a recession that looks to be longer and deeper than any in recent memory (including the ones that began under Republicans Ford, Reagan, Bush, and Bush--not that that says anything about their economic prowess), due in no small part to Greenspan-backed Republican tax cuts and Greenspan-spawned Republican fiscal policy (the latter continuing unabated under the DLC-spawned Clinton presidency), one wonders why we are trying so hard to win this election. Sure it would be much better for the country, but how have we faired as a party in the past after inheriting Republican recessions? Just ask Jimmy Carter. And the situation he had to deal with in Iran was not nearly so bad as the one Bush appears anxious to create.
Of course I do not truly advocate allowing the Repubicans to win this election and further destroy America, but we should think carefully about how to proceed into the first months of a Clinton or Obama presidency. If Congress continues to drag its feet on key economic and foreign policy reforms under a Democrat as it has under Bush, and if we do not introduce tough policy measures like deep cuts in "defense" spending, speedy withdrawal from Iraq, and higher taxes on the wealthy, we should not expect the "eight years of [insert favored Democratic candidate's name here]" that Democrats inevitably mention when discussing their choice between the two remaining frontrunners.
1.30.2008
On second thought...
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Wow. You know, it's kind of silly to call these "Republican recessions." When, for instance, did the economic begin to shrink that started our last so-called "recession?" 3rd quarter of 2000, right? So the economic mess of the beginning of the 21st century has a lot to do with the stock market bubble and a general global slowdown, not the policies of one party or another. And we know that other recessions, from the 1970s and 80s, were products of oil shocks - something that certainly doesn't have a partisan association to it.
Looking back on the past 25 years, you'll notice that recessions have become far less common and much shallower. Why is that? I'm probably not qualified to answer such a complicated question, but I think we are a much more flexible economy because we trade more, our taxes are lower, and we have an active Fed. Both parties deserve credit for this - Kennedy and Reagan slashed taxes, all presidents have embraced trade, and all presidents have supported Fed chairman with a proclivity for slashing rates.
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