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Bushama Economics

January 18, 2013

Bushama Economics 

Bush and Obama 

The Obama partisans think Bush and Obama are so different.  I wish they would subject Obama to the same standards to which they subjected Bush.  If they did, they couldn’t possibly support him. 

Surprisingly, economic policy is one area where they are more alike than different.  Both of them directed hundreds of billions of dollars to favored constituencies at the expense of the rest of us.  Bush directed money to faith based organizations as one clear example.  Other examples are more subtle.  He increased Federal education spending by leaps and bounds, to the benefit of public sector unions.  This was probably an attempt by the Republicans to convert this powerful interest group to their side.  The Republicans should have known the Democrats have the public sector unions locked up for the foreseeable future. 

Another Bush-Republican attempt to buy off an interest group was expansion of Medicare to include drug coverage, Medicare Part D.  That made sense politically because the elderly are the most powerful interest group in every democracy.  It doesn’t make sense as economic policy when 1) most of those receiving a subsidy don’t need it and 2) we can’t afford another entitlement program piled on top of the ones we already have. 

Obama and the Democrats have appropriated hundreds of billions of “stimulus” dollars to, among others, state and local governments.  Thus, public sector jobs (a Democratic Party constituency) have grown in number during much of the current recession while private sector jobs plummeted.  Any connection there?  If you are taking hundreds of billions out of the private sector, which is inevitable if the government is spending hundreds of billions to “stimulate” the economy, the private sector will lose jobs as a result.  Many people seem to think government spending comes out of dollars sitting around unused and don’t stop to think of what the economist Bastiat called the “unseen” effects of a given policy.  The unseen in this case is money removed from the private sector to support government. 

Both Presidents disregarded consumer interests from their first days in office.  Early on Bush placed tariffs on imported steel so that domestic manufacturers could raise prices.  This served the interests of steel manufacturers and powerful steel unions.  Why did he do it?  Because at that time there were some steel-producing states closely divided between Republicans and Democrats, such as West Virginia, and Bush wanted to tip the balance toward Republicans for the future.  We all paid the price for this favoritism in the form of higher prices for every product containing steel.  This policy was eventually rescinded because it was ruled illegal under international trade agreements. 

Obama changed a policy under Nafta during his first days in office.  He terminated the right of Mexican truckers to bring Mexican produce into the United States.  The produce had to be transported on U.S. driven trucks once it crossed the border.  He gave safety as the justification despite the fact Mexican drivers had a better safety record than U.S. drivers.  What was the real reason?  The Teamsters.  He promised during the campaign he would do this, thus acquiring Teamster support.  Recently he retreated from this policy as a result of negotiations with the Mexican government. 

Obama, like Bush, instituted a new entitlement program: Obamacare.  Not only is it an entitlement in a general sense because of its myriad subsidy schemes, it also contains specific entitlement programs within it.  One is called the CLASS Act, of all things.  It provides subsidies for the purchase of home care insurance and its structure almost guarantees trillions in additional unfunded liabilities.  Even the Obama administration has retreated on the CLASS Act because of the financial impossibility of the program. 

Bush and Obama have turned the U.S. into a crony-capitalist country.  One author speculated about the tipping point and concluded it occurred during either the Bush bailout or the Obama stimulus package, each one totaling almost one trillion dollars.  Does it really matter how we apportion blame when they both deserve it? 

The Who performed a rousing song about revolution entitled “Won’t Get Fooled Again.”  The last line is “Meet the new boss; same as the old boss.” 

Republican and Democratic partisans argue about the righteousness of their parties, not acknowledging how similar the parties are in their desire for ever increasing power.  To Democrats I say:  “Subject Obama to the same standards you subjected Bush and you can’t rationally support him any more than Bush.”  To Republicans I say: “With friends like Bush, you don’t need enemies, especially if you are concerned with the fiscal disaster we are courting.”  Presidents such as Bush who have the label “conservative” are especially pernicious because fiscally conservative policies get blamed when in fact we had a spendthrift Bush-Republican regime. 

Rick Miller

Please also see my article on the Manhattan Libertarian Party website: http://manhattanlp.org/category/serf-city-news/

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