First of all, although I know Obama has set an American Presidential record in terms of badmouthing his precessor in terms of duration and frequency, which clearly suggests a lack of confidence in his own agenda and a paucity of legitimate policy ideas to spur economic growth, I don't like the idea of Bush and Cheney taking a higher profile, because it simply gives the Obama Administration another excuse to bash the Bush Administration. Obama is rapidly running out of time to use that excuse, having now been in office for over 5 months; we should soon be able to see macroeconomic impact on the economy based on Obama's policies. We already know that Obama's hyped goals for passing the so-called stimulus package, e.g., capping unemployment below its current level, have already failed to hold.
As to Gibbs' reaction to the Bush criticisms that "We kept score last November, and we won": once again, the Democrats are confused: it was an open election with neither Bush nor Cheney on the ballot, and second, Bush and Obama did agree on a number of things, e.g., TARP funding and a targeted shutdown of the Guantanamo Bay detainee center. I attributed Obama's victory to principally two reasons: a vast campaign fund advantage, and significant economic distress which traditionally has been an advantage to the party out of power. Obama did not win by a landslide on which he could claim a significant mandate, nor did his individual policies; the polls have consistently shown that Obama's own ratings rate above the popularity of his policies. At most, Obama can claim a win in terms of personal style, not on policy substance.
Second, the former President puts in a vigorous defense of the private sector: "Government does not create wealth. The major role for the government is to create an environment where people take risks to expand the job rate in the United States.." This seems to be addressing Obama's patently absurd concepts of "investments" in education, green energy, and health care, as driving American growth. (Obama has a conceptual problem in confusing periodic/operational expenses with the concept of an investment.)
By any objective standard, green energy solutions are not significantly scalable in the short term for a number of intrinsic difficulties, such as the lack of cheap mass storage and means of distribution. It's also not clear why growing economies, such as China and India, with surging needs for energy, would unilaterally assume the higher costs of green energy, narrowing competitive cost advantages fueling their growth. For example, I've seen that China is averaging the opening of one coal-based power plant per week. It is not making this kind of investment in energy infrastructure for the short term. Obama has deliberately misled the American people, not pointing out that the US has been investing in and subsidizing in green technology solutions for decades while taking American sources of carbon-based energy essentially off the table. This is a deliberate strategy of the environmental leftists: they hardly oppose higher energy costs; they figure that the higher costs will force American consumers to be more energy-efficient. There is a major problem, though: the Democrats and environmentalists have been stonewalling domestic energy exploration while maturing oil and gas fields continue petering out, increasing America's dependence on carbon-based energy imports. There is a problem, though--net foreign energy supplies are not increasing fast enough to satisfy both America's increasing dependence on carbon-based supply as well as the emerging market's demands.
There is no denying that the status quo is not a long-term solution, but what the liberals won't tell you is that every barrel of domestic production which peters out without new domestic sources replacing it is a barrel we have to pay for on the expensive international market, We don't know when we'll get some scalable breakthrough in green technology, but it is sheer madness for Obama to be playing Russian roulette with the nation's economy.
However, Bush is also pointing at other issues as well, in particular, Obama's penchant for micromanaging the private sector, including the auto and financial services industry. It is certainly egregious for Obama to demagogue over "lobbyists" (naturally, not including his own special interest groups, like ACORN, the unions, the environmentalists, etc.) and the "rule of law", when he is willing to do away with contractual retention clauses in management contracts and throw securitized bondholders under the bus in favor of his crony union unsecuritized interests.
The problem that I have with Bush speaking up on this topic is due to the fact that in September, he himself was in charge when we saw government takeovers of AIG, Fannie and Freddie Mac, etc. He punted the ball on the automakers to Obama. So when he paints himself as aligned with the interests of the private economy, we would not be in the position we are in today if Bush had been more vigilant in defending the private economy instead of keeping failing business models going on the taxpayer dime; after all, that's the private enterprise system.
Third, Bush references Obama's tax-and-spend record: "I know it's going to be the private sector that leads this country out of the current economic times we're in. You can spend your money better than the government can spend your money." Well, the low-tax message is laudable, but guess what, Mr. Bush? Obama co-opted the message in his redistributionist tax scheme. He saw your tax cuts and raised them with tax credits/refundable rebates. for lower/middle-income workers. He simply continued your example of no net federal income tax for about 40% of the workers--that means, 40% of voters without any qualms of spending what's in the other guy's pocket. Why should they care whether federal money is being being spent efficiently or effectively? Somebody else is paying for the bill; they're getting something for nothing. Don't bite the hand that feeds you. Now Obama wants to raise the number of these workers to about half the working population.
The problem, Mr. Bush, is that you can only cut taxes so far: you have to pay the bills sooner or later. Obama, of course, is passing massive spending bill after massive spending bill, resulting in quadrupling the last fiscal year budget deficit under Bush. Oh, to be sure, Obama pays lip service to the concept: of fiscal conservatism; with a straight face, he talks about about a $17B deficit reduction in the face of a $2T deficit. He talks about "pay as you go", but the only times he threatens to veto spending is in Defense Department budgets (in the face of increasingly strident North Korea and Iran).
Perhaps Obama doesn't care about the climbing aggregate deficit; he certainly didn't micromanage the Congress (unlike private companies, like GM) or threaten the stimulus bill and omnibudget spending bill with vetoes. Maybe he's under the impression China and other countries will continue to buy up T-bills, keeping interest rates artificially low relative to inflation risks. Or maybe he's going to put it on the bill, so a future President and generations will have to pay for his spending sprees, at the price of future higher taxes and lower economic growth.
Mr. Bush, the solution is not simply lower taxes. You have to have federal revenues for a given level of spending. It is true that Wal-Mart could increase profits through aggressive discounts; but the problem is a diminishing return of tax rate cuts. If Wal-Mart sells at cost, it earns no profits. It continues to drive up sales volumes with price cuts, and aggregate profits will continue to increase as volume makes up for lower profit. But at a certain point further decreases in price will lower, not increase aggregate profitability, as the increased volume does not make up for lower profits. For, for Wal-Mart, the issue is finding that optimal price point. The same thing holds true for tax rates. In setting the "right" tax rate, one must first know how much federal revenue you need. You can argue a "starvation diet" for federal spending given low tax rates, just like Obama and the environmentalists unrealistically argue a "starvation diet" for energy consumption. The problem is that serious budget cuts are easier said than done.
The problem, of course, is the fact that the Bush Administration increased spending more than the revenues brought in under the Bush tax cuts, something that Democrats are all too eager to point out was not Clinton's legacy (although they fail to point out that only GOP-controlled Congresses have yielded a balanced budget over the past half century). A lot of that deficit spending had to do with fighting two wars in Iraq and Afghanistan; there were also increases in homeland security spending and the new Medicare drug benefit. However worthy these spending priorities, I don't think Bush ever seriously addressed how to pay for the additional expenses. So Bush has less moral authority to argue about a budget deficit in general; he certainty did not do a government streamlining or a "pay as you go" policy for paying for the additional spending. Instead, his only spending vetoes were for limited spending bills like an upgraded SCHIP, which, of course, Democrats tried to paint as Bush standing in the doorway of a hospital emergency room trying to prevent a poor orphan from getting life-and-death surgery, instead of above-average income taxpayers trying to dump their children's medical bills onto the American taxpayer.
Fourth, Bush looked at the issue of Guantanamo Bay detainees: "The way I decided to address the problem was twofold: One, use every technique and tool within the law to bring terrorists to justice before they strike again...I'll just tell you that there are people at Gitmo that will kill American people at a drop of a hat and I don't believe that -- persuasion isn't going to work. Therapy isn't going to cause terrorists to change their mind." Whereas I'm sympathetic to the argument of judicious application of enhanced interrogation techniques to high-ranking terrorists, I'm not sure (if allegations are correct) why these techniques may have been applied as many times as they were. I do think Bush has to address a number of questions: Why would the CIA have dropped the technique in 2006 if it had been effective? For example, suppose Osama bin Laden was captured alive. Are we saying we wouldn't use enhanced interrogation techniques on him to obtain what he knows about projected attacks? Second, I would like to understand better why, if Bush is correct about the dangerous Gitmo detainees, did his administration release so many detainees whom ended up on the battlefields of Iran and Afghanistan battling American forces? Third, Bush needs to flesh out his differences with Obama on the idea of closing Guantanamo Bay detention center, to which he himself agreed in concept.
Fifth, Bush sought to defend his administration from its part in the housing bubble, noting that they had attempted to rein in Freddie and Fannie Mac, but ran into political roadblocks. There are a number of issues that needed to be addressed, but the fact is the market was awash in speculation: we had markets, e.g., California, Las Vegas, and Florida, where housing prices were far outstripping wages, we had largely unregulated derivatives being used for bank reserves, we had Mortgage-Backed Securities on the market which weren't properly diversified by geographic risk and other factors, and we had gimmick home mortgages being extended without down payments and verified employment. I don't think this excuses the Democrats, because both political parties benefited from the expansion of home ownership and the Clinton Administration was an enabler of a deregulated financial services industry.
A Critique of George W. Bush
I do think that history will be kinder to George W. Bush than present-day ratings indicate. But there are some criticisms which will persist. First, George W. Bush largely threw away the "competent manager" card, which is particularly notable given the first MBA President. This is clear from the chaotic mess of post-invasion Iraq, including a lack of planning, an undermanned occupation force, the decision to disband the Iraqi Army, and decisions essentially shutting out the Sunni minority from power and influence. There were unforced errors in terms of issues with captured enemy combatants in Iraq and Afghanistan. Bush tried to nominate his Texas cronies to positions for which they had questionable qualifications, e.g., Harriet Miers to the Supreme Court and Alberto Gonzales for Attorney General. Bush gave undue deference to a clearly dysfunctional New Orleans mayor and Democratic Governor of Louisiana during the Katrina disaster. He clearly didn't pull the hook fast enough during Katrina and the Iraqi quagmire.
Second, Bush's party leadership was problematic, particularly during his second term. In a baffling decision, he waited until AFTER the 2006 election to announce Rumsfeld's termination and a new Iraq strategy. If this decision had been announced before the election, several Congressional seats would likely have been saved--including control of the Senate. Another notable problem was how Bush handled the economic tsunami, never even seriously taking into consideration the views of House Republicans. Bush's timing and mishandling of the immigration reform issue was a contributing factor towards McCain's losing a significant portion of the Hispanic vote. Bush seemed to retreat to a defiant "I-am-the-decider" stance, contributing to the political polarization in Washington, a contributing factor to Obama's misleading but persuasive "turn-the-page" rhetoric. McCain had no coattails from Bush's endorsement, given Bush's growing unpopularity with voters except for the Republican faithful, and McCain found it difficult to separate his policies with those offered by Bush, which was expertly exploited by Obama. Finally, Bush failed to challenge the Congressional Republicans, especially after regaining the Senate in 2002, to hold true to the reform agenda and fresh ideas that led to the GOP's House victory in 1994 and the longstanding Republican emphasis on a balanced budget
Third, Bush made some key strategic blunders. One of those was taking on a sacred cow of American politics, social security, and introducing certain reforms (i.e., privitization of a portion of contributions) early in his second term, and the Democrats were easily able to foil the attempt with fear, uncertainty and doubt. Another was failing to seize the opportunity of bipartisanship after his deft handling of 9/11 and the subsequent defeat of the Taliban in Afghanistan. This was particularly mystifying coming on the heels of his well-regarded bipartisanship as Texas governor. This is an odd case whether the son followed his own father's blown opportunity in the aftermath of the first Gulf War with approval ratings near 90%. Finally, Bush's public relations were handled ineptly, as Bush's adversaries were largely able to define him.
Finally, Bush failed to emulate Reagan's communication skills (with the exception of certain post-9/11 moments) and Reagan's pragmatic leadership. Bush often came across as strident versus open and flexible. The media/pop conservatives, for instance, choose to ignore one of Reagan's first steps as California governor was to raise taxes, and he came to a compromise with the Democrats during his first term as President for payroll increases for social security.
Concluding Remarks
I do commend President Bush for not returning in kind the polemical and, in my view, hypocritical scapegoating rhetoric and Roveian-style tactics of Obama, whom had promised a post-partisan Washington but has resorted to voting gimmicks and picking off individual Republican senators to avoid genuine bipartisan compromise. I do wish, however, that a former President whom oversaw protectionist steel policies, agricultural subsidies, and an unprecedented massive state intervention during the recent economic tsunami needs to go beyond pro-market sound bytes to differentiate his policies from Obama. The same type criticism can also be applied to Bush's other statements.
But at the present time, it's important that the Republican Party finds fresh voices and ideas to confront the vapid, pretentious leadership and ideas of Obama and his Congressional cronies. It's been less than 6 months since your Presidency ended, Mr. Bush. We are still coping with the worst recession in decades that started on your watch. Now is not the time to revisit the past; we need to focus on the present challenges.
