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Tuesday, May 22, 2012

The president whose name dare not be spoken

Posted By on Tue, May 22, 2012 at 11:07 AM

THANKS BUT NO THANKS: Mitt Romney couldnt bring himself to name George W. Bush after he gave Romney his elevator-is-closing endorsement.
  • THANKS BUT NO THANKS: Mitt Romney couldn't bring himself to name George W. Bush after he gave Romney his elevator-is-closing endorsement.

Ernie Dumas writes this week about Mitt Romney's dilemma — how, really, can he avoid mentioning George Bush, whose policies put the country into an econommic free-fall?

Read on:

By Ernest Dumas

You can appreciate Mitt Romney’s dilemma. The economy is supposed to be the win-or-lose issue in the presidential election, and your advantage is that voters tend to forget fairly soon how the bad times started and instead blame the man who inherited them. But how do you avoid triggering inconvenient memories?

George W. Bush, who left office only 40 months ago with a 22 percent approval rating, has helped the cause by staying out of sight and out of mind—until last week, when he told an ABC reporter as he was squeezing into an elevator that he supported Mitt Romney for president.

In the two years since he started running for president—actually since he started running the first time six years ago—Romney has rarely uttered the name of the former Republican president whose taxing and spending practices, including a fourfold increase in military spending, sent the national debt spiraling out of control and whose regulatory and economic policies produced the worst economic collapse since 1929.

Romney called Bush to thank him for the endorsement and then avoided using his name so assiduously the next day that the media had to take notice. In a speech in Florida in which he attacked President Obama’s debt and spending record, Romney alluded to Bush five times, but each time only as the president’s “predecessor.” He said Obama had justly criticized the big deficits of his predecessor but that Obama’s were much worse.

That has been Romney’s refrain for a long time. He can justify it by the raw numbers, as long as he doesn’t have to explain them, but in a head-to-head campaign with the president rather than with a choir of Republican candidates it will be unavoidable. Obama’s deficit and debt numbers are worse because the economy was in a free-fall when he took office. The collapse of government revenues, Bush’s wars and the rising cost of income security in the recession meant necessarily rising deficits and debt.

Yes, there was Obama’s big stimulus program, squeezed through Congress with the support of only three Republican senators, in the spring of 2009. It came to $815 billion, spread over three years. The nonpartisan Congressional Budget Office calculated that it added from 500,000 to 3.3 million jobs and raised GDP by up to 4.5 percent—not nearly enough according to Republicans and liberal Democrats, but better than Bush’s record the preceding three years. Along with his predecessor’s bank bailouts, it meant that a financial panic did not produce a depression for the first time in the nation’s history.

Romney has two big problems with his argument about the failure of Obama’s economic initiatives.

First, when he was governor of Massachusetts and his state was failing to keep up with other states climbing out of the little Bush recession of 2001, Romney proposed stimulus programs with taxpayers’ money totaling $600 million, mostly bribes to corporations to hire workers. It would come to $30,000 a job.

Second, Romney’s oft-repeated charge that Obama inherited a bad economy and job situation and then proceeded to make it much worse will not withstand a minute’s debate. When Obama took office the economy was losing an average of 750,000 jobs a month. The job losses shrank as the stimulus kicked in that summer until October, when the unemployment rate bottomed out at 10 percent. The jobless rate now is 8.1 percent and it may not get back to
Bush’s ending rate of 7.6 percent before the election, but the reason for that is perverse for Romney, if he cares to pursue it.

The economy has regained about 4.3 million private-sector jobs so that there are more people employed in the private sector than when Bush was president. The jobless rate is still high because in the same period the number of government workers has fallen by 607,000 and governments are continuing to shed jobs. Republican orthodoxy is that eliminating government jobs is supposed to be a good thing.

Can you make people believe that Obama should have stopped the economic freefall the day he took office and that those millions of jobs lost in his first several months in office were his fault? No, you just avoid the discussion if you can.

Oh, and the equity and credit markets are all far better than the predecessor’s. The Dow stood at 7,949 and the S&P at 805 when Bush left. Now the Dow wobbles around 13,000 and the S&P hovers around 1,315.

It is hard to construe those numbers as “much worse” than for Obama’s anonymous predecessor.

Romney says he’ll repeal the remedies to the financial collapse that Obama put in place, starting with the banking rules that are supposed to prevent another bailout. But won’t you have to go back and talk about what happened and how you would do it differently?

That unpopular bailout that Romney sometimes subtly acknowledges was Bush’s? Obama modified it by making shareholders take a haircut and forcing $140 billion of private money to recapitalize the 19 largest banks and unfreeze the lending market. The result was the banks repaid taxpayers with interest. Under the predecessor plan, the taxpayers might still be out $700 billion.

Yes, the biggest banks are bigger than ever, as Little Rock financier Warren Stephens lamented the other day in the Wall Street Journal, but that is thanks to the mergers engineered by Bush before he departed.

Same story with the automakers. They were going under with the Bush bailout. Obama re-engineered it, demanded that workers take a hit and put in more cash. America now has a growing auto industry and most of the $80 billion has been returned to the treasury.

If George W. Bush will stay off the stage, maybe Romney can stick to the simple message and avoid those troublesome details.

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