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It seems that President Bush is running around claiming that he "inherited an economy in recession." (See below.)
Just to be clear, the NBER declared the beginning of the recession to be in March 2001, AFTER the current administration took charge.
This isn't to say that Bush somehow caused the initial recession (although it certainly didn't help that VP Cheney was running around in the country in late 2000 and early 2001 telling everyone how the economy was in bad shape.)
It is also unlikely that the recession was caused by any Clinton policy - the recession was largely a result of decreases in business investment - and the federal government simply didn't do anything in the late 1990s that would have had a significant impact on the short-run macroeconomic situation.
The important question is not whose fault is the recession, but rather what has been the response of the administration to the economic situation. We have seen 3 major tax cuts - one per year - totaling around $1.75 trillion over ten years (and this is a gross underestimate since the cost assumes that many of the provisions are allowed to sunset) each of which were sold as economic and job stimulus, but which in reality had very little to do with good counter-cyclical fiscal policy, or with the current economic problems.
The result? Unemployment continued to increase and is up to 6.1%, and there have been 2.5 million jobs lost since March 2001. As a result of the revenue reductions from the tax cuts and the weak economy, the federal budget has gone from a record surplus to a record $400 billion deficit.
We are continually told that the Republican Party is a supporter of personal responsibility. The administration should not be playing the blame game when it comes to the economy, and should take responsibility, at the very least, for the ineffectual policy response and the current dismal budget situation.
The original NBER announcement
The latest update
As 2004 Nears, Bush Pins Slump on Clinton (washingtonpost.com)
With the start of his reelection campaign in the past two weeks, President Bush has revived his pastime of blaming his predecessor, Bill Clinton, for the economic recession.
"Two-and-a-half years ago, we inherited an economy in recession," he told donors at a Bush-Cheney '04 reception yesterday in Miami. He has raised the same accusation in fundraising appearances since mid-June in Washington, Georgia, New York, Los Angeles and San Francisco.
It's a good applause line for a crowd of red-meat political supporters. The trouble is it's a case of what the president has called, in another context, revisionist history. The recession officially began in March of 2001 -- two months after Bush was sworn in -- according to the universally acknowledged arbiter of such things, the National Bureau of Economic Research. And the president, at other times, has said so himself.
The bad news came on Nov. 26, 2001. The NBER, led by an informal economic adviser to Bush, Martin Feldstein, pronounced that economic activity peaked in March 2001, "a determination that the expansion that began in March 1991 ended in March 2001 and a recession began."
At the time, Bush accepted the verdict with perfect accuracy. "This week, the official announcement came that our economy has been in recession since March," he said in his radio address the next weekend. "And unfortunately, to a lot of Americans, that news comes as no surprise. Many have lost jobs or seen their hours cut. Many have seen friends or family laid off. The long economic expansion that started 10 years ago, in 1991, began to slow last year. Many economists warned me when I took office that a recession was beginning, so we took quick action."
Until the NBER's official pronouncement, Bush had avoided the "R" word. He spoke earlier in 2001 of an "economic slowdown" as administration officials noted, correctly, that the pace of economic growth began to slow (but not contract) in 2000, under Clinton's watch. "In terms of how you call it, what the numbers look like, we've got statisticians who will be crunching the numbers and let us know exactly where we stand," Bush said in October 2001. "But we don't need numbers to tell us people are hurting."
...
Feldstein's NBER, which earlier said it gives "relatively little weight" to the quarterly growth figures from Commerce, is not joining in the revision. Two weeks ago, it issued an updated report sticking by its assessment that the recession began in March 2001.
It seems that President Bush is running around claiming that he "inherited an economy in recession." | Posted July 1, 2003 01:09 PM by John Irons
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I agree with you that neither Bush nor Clinton caused this recession, but you can hardly expect Bush to say nothing when, if he does, the Democrats will gleefully be claiming he caused it since, after all, it didn't officially start until he was in office.
Bush's sin is not causing the recession, it's failing to do anything useful to stop it, while lying about economic matters.
This is the DeLay depression folks. In 1997-1998, when a bubble was brewing and fiscal policy could have been used effectively, we had a congress bent on paralysis and investigating the President.
Put the blame for the recession where it belongs, on Congress.
The response to it, however, is on Bush, and the attempt to blame Clinton for the poor job market will not ring true in 2004. People will say "you've had every branch of government since the 2002 elections."
Which is why the devaluation policy is in place: a hope to produce enough stimulus to get through 2004.
>>but you can hardly expect Bush to say nothing when, if he does, the Democrats will gleefully be claiming he caused it since, after all, it didn't officially start until he was in office.
HUGE, HUGE difference between lieing and saying nothing. Only the morally bankrupt - and those desparately trying to spin an agenda - would confuse the two. So what next - that the Democrats *forced* Bush to lie? Right. Interesting way to look at the "party of personal responsibility" when lieing is proffered as the only alternative to defending one's economic record.
So even with the benefit of hindsight you beleive that the Clinton Administration did nothing wrong?
That must surely make it the first economic policy ever with a 10/10 ex ante rating.
I think if you asked anyone in the previous administration, they'd say variously that they should have have run a tighter fiscal policy in 1997, changed tax treatment of directors stock options, put pressure on Greenspan to raise interest rates earlier etc.
And another thing to consider; the earlier the recession started, then the more time the Bush Administration will have had to correct things, and the earlier it should have started taking action; so in what way does is shifting its start favor the Republicans?
Unless you take a 60's view that the econom can be switched on and off at 3 months notice with the approoriate policies I 'm afraid that your whole politico economic thesis stacks up like a pile of marbles.
Giles needs to reread Andy. The first issue to consider here is the lack of honesty. Next, second orders spinning is just plain silly ("...so in what way does shifting its (the recession's) start favor Republicans?"). If the Bush people think it is to their advantage to claim the recession started before it did, then claiming it is not in their favor is not really defense, more of a critique of Karl Rove's spin. The obvious point here is the one that the Post suggests and that Irons has drawn - Bush is being dishonest in pursuit of political advantage.
no, cliaming it is not in their interest is not a defense, it just pours cold water on an outbreak of paranoia.
Maybe they are changing the date because that is the truth and make history easier to understand; didnt you think it was odd that the democrats lost the last election despite the economy being in great shape? Or might it be that they lost because the economy was in recession; doesn't that add a little more plausibility to history?
With the benefit of hindsight the problem is rather clear: for 2 years the US government was adrift in a sea of artificial scandal when it should have been doing the people's business.
It was a rabidly partisan Congress which shot down any proposal to deal with the monetary policy bind of 1997-1998.
Just a (relatively ignorant) question here:
How much of the recession was due to the Californian economic slowdown due to the energy market manipulations that seem to have occurred there? I mean, I'm a comp sci major, but shutting down the world's 7th largest economy for several weeks is hardly consequence-free.
I think we should wait a few years before being so sure there was a recession in 2001. The case presented by NBER is tenuous. In any event, as a statistical phenomenon, if it happened, it was extraordinarily short and mild.
What is not so mild is year after year of substandard growth.
Also not so mild is how the consequences have affected localities. California's recession, as mentioned above, was caused largely by the machinations of Enron, although the consequences of the so-called "tech bubble" were also significant. New York has suffered terrible economic damage following 9/11 in large measure because Bush reneged on pledges to provide billions in aid for disaster relief and reconstruction.
Indeed, a topic worthy of interest is how well-targeted this "recession" has been. It has overwhelmingly affected urban, Democratic areas. In other areas that have been adversely affected, Texas' problems, for example, are directly traceable to Bush's looting of the public Treasury on behalf of his wealthy cronies.
I don't call it a recession. I call it economic warfare.
Of all the words of mice and men, the saddest are `It might have been.