Jeffrey Frankel is not, by nature, a bitter or a partisan person. Yet today a huge number of people who--like me--do not think of themselves as by nature bitter or partisan neverthless find that we are bitter, very bitter, and have become partisan, very partisan. Consider that back before the George W. Bush administration even a figure like Paul Krugman was careful to stay even-handed: to balance a criticism of the supply-siders in the Republican Party with one of the strategic traders in the Democratic Party, to balance a condemnation of the Republican establishment for thinking that boosting corporate profits solves all ills with a condemnation of the Democratic establishment for thinking that neoliberal reforms in developing countries solve all their ills.
Why do so many of us who worked so hard on economic policy for the Clinton administration, and who think of ourselves as mostly part of a sane and bipartisan center, find the Bush administration and its Republican congressional lapdogs so... disgusting, loathsome, contemptible? Why are we so bitter?
After introspection, the answer for me at least as clear. We worked very hard for years to repair the damage that Ronald Reagan and company had done to America's fisc. We strained every nerve and muscle to find politically-possible and popularly-palatable ways to close the deficit, and put us in a position in which we can at least begin to think about the generational long-run problems of financing the retirement of the baby-boom generation and dealing with the rapidly-rising capabilities and costs of medicine. We saw a potential fiscal train wreck far off in the future, and didn't ignore it, didn't shrug our shoulders, didn't assume that it would be someone else's problem, but rolled up our sleeves and set to work.
Then the Bush people come in. And in two and a half years they trash the place. They trash the place deliberately. They trash the place casually. They trash the place gleefully. They undo our work for no reason at all--just for the hell of it. Reading Suskind's The Price of Loyalty shows just how casual and unthinking it was. As the Economist writes:Economist: On the other side of the Atlantic, the budget is even less balanced--thanks in part to three rounds of tax cuts enacted since President George Bush took office--and the controversy just as bitter.... Paul O'Neill, Mr Bush's former treasury secretary... laments Mr Bush's style of leadership (disengaged), his case for invading Iraq (disingenuous) and his fiscal record (dismal). The last of those flaws has excited the attention of the International Monetary Fund, which gave a warning in a report last week that America's deficits, if left unchecked, posed a gathering threat to America and the world. Mr O'Neill says that when he raised his concerns about fiscal profligacy with Dick Cheney, the vice-president, he was told "deficits don't matter." The IMF insists they do. The decade of deficits that lies ahead for America will put upward pressure on interest rates, crowd out private investment and erode longer-term productivity growth...
And every single senior Republican economic policy appointee comes out of a look back at the past three years looking very badly. X fails to organize meetings so that the long-run budgetary consequences of short-run policy moves are properly considered. Y pirouettes in midair and transforms from a deficit hawk into a deficit dove so as not to offend White House Media Affairs. Z lowballs the interest rate effects of higher deficits--and manages not to talk about the savings and investment effects at all. W mutters in the privacy of his own office about the importance of maintaining a surplus--but doesn't have the nerve to say "Boo!" to a goose (let alone to George W. Bush) once he steps outside his office door. V remains silent while the clown show that is the Bush economic policy process--a process he cannot view with equanimity--rolls forward. U cuts his own agency staff off at the knees and shows no interest in the very important and interesting work on the long-run fiscal options that they have done. Outsiders like R who assured me back in the fall of 2000 that Bush understood and would tackle the long-run problems of funding entitlements and the social-insurance state manage not to emit a public peep of complaint. Q talks about how much the president wants to reduce the deficit without daring to put his own position on the line within the administration by demanding that words like "deficits are bad" be accompanied by an actual plan to reduce the deficit. Every one. Every single last one.
And it is worth pointing out that it's not just the economic policymakers. The same holds true of all the other executive-branch Republican political appointees: defense, international affairs, science policy, social policy. Is there anybody (with the exceptions of John Donaldson and Mark McClellan) who has emerged or well emerge from this administration like a reputation? And it's all the Republican senators and members of congress as well. People who used to have some claim to respect--paging Pete Domenici, anyone?--have simply rolled over and played dead.
"Is George W. Bush the worst president ever?" is the question that George Akerlof asks. A fish rots from the head, yes. But this fish is rotted all the way down to the tail.
So we sit here out in the Alpha Quadrant, bitter.
Perfectly said. GWB has managed to transform rationalists into rabid partisans. Quite a trick.
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