External Influences on the U.S. Economy Are an Excuse for Obama, but Not for Bush

     Lately, the Obama Administration has been blaming the recent economic slowdown in the United States on the Japanese earthquake and tsunami, the European debt crisis and the Arab Spring and the global rise in energy prices. At least now the Administration is not blaming everything on former President George W. Bush. 
 
     There is some merit to the argument of the Obama Administration and its defenders that external influences and other such matters beyond a president’s control can have an impact on the economy, although the economy’s current underlying weakness is at least partly attributable to some of the Administration’s policies. But it was different when Bush was in office. Then, he was blamed for every economic ill that befell the American economy caused by external influences by the same liberals who are now excusing Obama.

     When Bush came into office in 2001, an economic slowdown had been ongoing since the year before. Not long after, a series of scandals shook confidence in American businesses. Then, just as the economy began to recover after his tax cuts were signed into law, the September 11 Attacks occurred. September 11 represented a trillion-dollar blow to the economy. There was little public surprise when a recession was the result. After the tax cuts took effect more fully in tax year 2002 and the approval of additional tax cuts, the American economy began to recover gradually once again. Then, in mid-2005, energy prices rose sharply because of increased demand from developing countries as the global economy was prospering. Although inflation remained surprisingly low, despite the increase in energy prices, the resulting slight rise in interest rates was enough to burst the housing bubble and touch off the financial crisis and the Panic of 2008, which sent the global economy into the Great Recession. Also, during the later part of the Bush Administration, unlike during the Clinton Administration, most Americans lived in states with Democratic governors who raised taxes, which slowed growth across the Union. In short, the economy during the Bush Administration was hampered by a slowdown that began before he took office, business scandals, the September 11 Attacks, the rise in energy prices, the bursting of the housing bubble and anti-growth state policies – all matters beyond Bush’s control.

     Yet, liberals blame Bush for everything bad in the American economy. They ignore the years of prosperity from 2002-2008, when the economy grew with low unemployment, low inflation and low interest rates, despite all the external challenges, while they do not hold their liberal governors’ to the same standard. The liberals also do not acknowledge any responsibility of the liberal Democratic Congress of the last two years of the Bush Administration that refused the Administration’s repeated requests to extend the Bush tax cuts and to regulate better the federally-backed mortgage corporations that were at the heart of the bursting of the housing bubble that led to the financial crisis which exacerbated what would have been an average recession into the worst one in decades. 

     I have often posted that the purpose of government is to protect the liberty of the people, not to manage the economy. Prosperity is often a result of greater liberty, achieved by wise, but minimal law, but prosperity is not the purpose of government. Except for socialist regimes, governments cannot even propose to guarantee economic results, in part because of matters beyond their control. Although it is necessary to point out that liberals have been applying a double standard to government responsibility for economic performance, it is more important to focus on how government’s policies are unnecessarily slowing economic growth by unwise policies that restrict economic freedom.

     The Obama Administration, which came to power promising an improvement in the economy, which it considered its responsibility to guarantee, has failed to implement sound policies that increase liberty economically. Although external matters are hampering its efforts, the Obama Administration must be judged by the same standard it applied to the previous Administration it criticized and promised to apply to itself. Therefore, external matters ought not to be an excuse for an Administration that came to power insisting that everything in the American economy is attributable not only to government, and not only to the federal government, but in particular only to the policies of the President of the United States. We conservatives must continue to focus on promoting fiscally responsible policies that encourage economic growth and increase economic freedom.