Tuesday, June 01, 2004

Babbling Brooks

As must be apparent to anyone who has visited this site, I believe that the Iraq war is the most salient issue in this presidential election. It is imperative that the impending defeat of the Deserter be interpreted, by the political establishment and by the international community, as a rejection of his militarist and imperialist policies.

It would be nice if the impending election could also be seen as a referendum on the Deserter's economic and tax policies, but given that the electorate's tolerance for politics is finite the game of "issue emphasis" is largely a zero-sum game - an increased focus on Iraq must detract from the focus on the Deserter's plundering of the national weal. It was therefore refreshing to see Krugman and Brooks with dovetailing pieces in the NY Times on the Bush administration's economic performance.

Krugman launches his usual broadside with deadly accuracy, revealing precisely why it is necessary for the Bush administration to lie so clumsily about its fiscal policy.

Brooks' attempted defense of Bush fiscal policy is, predictably, weak. Brooks' recounts the following defense offered by an administration official in response to a criticism from economists that faulted the administration for its emphasis on short-term fiscal policy at the cost of long-term prudence.

[The administration] decided to do what was necessary to head off any immediate catastrophe. As Stephen Friedman, director of the National Economic Council, sums it up, "We didn't want to err on the light side when it comes to stimulus." Hence, the large tax cuts.
How can Brooks repeat this absurdity without the slightest skepticism? Doesn't he realize that the Bush tax cuts were uniquely non-stimulative? If, as the Bushies argued, demand was sagging and the specter of deflation loomed, what good was it to grant a massive tax break to the wealthy?

But Brooks gains a measure of redemption with the following, subsequent paragraph (one of four listing objections to the Deserter's tax cuts):

The second objection is that the cuts were poorly designed. They were drawn up in the midst of prosperity and then wheeled out in response to recession. Even Decision Economics' Allen Sinai, a big supporter of the cuts, says the stimulus could have been stronger if more of the cuts had been distributed down the income scale. The White House lacks a compelling response to this.
Indeed. But while the Bush team's response is less than compelling, it is amusing. They credit their tax giveaway to the rich with leading the recovery from recession, a recovery that has been, by any historical standard, a most tepid recovery from a very mild and brief recession, a recovery essentially devoid of job creation, a recovery that only recently exhibited any robustness. And no sooner did the rate of job growth increase than inflation was invoked by the Fed to warn of an impending monetary belt-tightening that will mute the already whispering recovery.

Brooks closes with an entreaty to the Bush administration to deal with long-term problems. "Let's talk about the consequences of the aging baby boomers. Let's talk about reforming the tax code to encourage domestic savings."

I give David credit for espousing long-term fiscal prudence. But I must damn David for pretending as if the Bush administration would ever risk its grandiose plans for everlasting war by expending its political capital on doing what is right for the country.

UPDATE: Noam Scheiber of The New Republic takes apart Brooks' slack-jawed encomium to Bush fiscal policy with even greater assiduity than Josh Marshall's talking point of this morning.


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