In an earlier posts I poked some fun at the possibility of Jeb Bush, the younger brother of President G.W Bush, both sons of President G.H.W. Bush, seriously considering bid for the White House in 2016.
But more seriously, it’s true that Jeb Bush is an individual and is neither his father nor his brother. And I really hate to be in the business of discriminating against the younger Bush in a manner that is consistent with the concept of corruption of blood, but there are two reasons, very good ones in my opinion, that I am leaning that way.
The first is that the economic policies of the two former Bush presidents had undesired effects. Both left office on the heels of a recession, with the last Bush leaving office on the precipice of the worst recession since the Great Depression that left no small impact upon my family.
Some have suggested that much of the origin of that recession has to do with stupidity on the part of particular policymakers in the area of monetary policy while stressing the relative independence of the Federal Reserve. But after watching the controversy over QE play out in public, in Congressional testimony, in the media and other venues, and witnessing a reversal that lead to the infamous ‘taper’, the notion of independence of the Federal Reserve and understanding of the influence behind the formation of policy remains somewhat murky. In my view. it’s questionable as to whom is actually pulling the strings.
Match this with the fact that policy hawks cannot get on the Federal Reserve’s Board of Governors without being politically connected and without going through the nomination and confirmation processes, and the point that none of the drivers behind the policies implemented have anything to do with politics appears rather impossible. If anywhere, the stupidity lies with the politicians in either taking economic-based rhetoric at face value or actually meddling in the implementation of what might have otherwise been good policy, or some combination of these.
In my view of the origins of the Great Recession in the sense of macroeconomics is that it became inevitable once the Board of Governors of the Bernanke Fed was fully constituted by the end of 2006 with like-minded individuals who were not bashful about expressing their anti-inflation tendencies and credentials. And, the only way to get on the BoG is to be nominated by the President and confirmed by the Senate which were controlled by the same party at the time of these nominations. No one with the power to prevent the BoG from implementing bad policy did so because, presumably, those doing the nominating and confirming agreed with the intent – full steam ahead into a brick wall.
My memory gets foggier as the years go by, combined with my lack of paying as close attention to policy debates back then as I have the last few years. But I can remember something of the complaints about inflation in politics back in 2000; not that it was a huge issue, but I remember hearing about it despite my lack of close attention, followed by a recession in 2001 that never really had the feeling of subsequent recovery, discussions about jobless recoveries being the new normal, and complaints that without the boom in housing the economy would be rather bad. It’s all anecdotal, of course, but reviewing these memories helps to provide some context to the larger picture regarding policy intent and effects during that time period. It also helps to search the CSPAN archives to review what was actually said during confirmation hearings and various speeches about economic policy. I don’t care much for what I heard while doing so as much of it points to the political formation of a critical mass of irrationality regarding deflationary policy preferences.
After reading the latest news about Jeb Bush calling for 4% GDP growth in a speech he gave in Detroit last week, I momentarily felt excited about what that might mean for monetary policy. I went to CSPAN again to search for the video of the speech to hear what he actually said. The takeaway was more than disappointing when the call was followed by the dissing of monetary “stimulus” and the suggestion that structural reform is what will deliver the results. Is he best buddies with Jens Weidmann?
The story about this speech that I found on Market Watch quotes Bush as saying thus:
WASHINGTON (MarketWatch)—Jeb Bush said on Wednesday that the U.S. economy should grow at a rate of 4% a year. Looking at recent history, that’s a pretty ambitious goal.
Speaking at the Detroit Economic Club, Bush said during a wide-ranging speech: “I don’t think the U.S. should settle for anything less than 4% growth a year, which is about twice our current average.” At that rate, Bush—who leads the field for the 2016 Republican presidential nomination but hasn’t yet declared himself a candidate—said, “the middle class will thrive again.”
Bush said “the opportunity gap is the defining issue of our time,” and said closing that gap starts with improving education. Key to that goal is accountability for teachers and school administrators, as well as high achievement standards for students, he said.
Is it just me, or do these things together create a non-sequitur?
I grew up in the public education system and I am not necessarily as ignorant as a box of rocks (yes, I can acknowledge that my punctuation skills are an issue – but I survive). This, of course, doesn’t mean that the current problems in education are not real problems and have no economic impact at all. But it seems to me that regardless of the current state of education (largely contributed to by G.W.’s ‘No Child Left Behind’ initiative), it really does not matter how educated our children become if we persist with tight money policies that produce nothing but mediocre growth if any at all. The opportunities have to be there for the educated to claim. Otherwise, we will keep churning out new, educated generations with limited opportunity, leaving large swaths of generational peers living with their parents until after 30.
Just a few days ago I was listening to a talk radio show where the millennial generation was discussed, and the hosts basically labeled them as slackers because of a poll that showed more than 50% of them with college education still live with their parents. It’s quite an unfair judgment to pass given the economic circumstances of the last several years.
Then, I think about what kind of attitude and reasoning must exist behind the suggestion that the most pressing issue involved in the “opportunity gap” lies in the education system, and I realize that there is very little about Jeb Bush that separates him from either his family members in politics or the political forces in the Republican Party establishment who thought that nominating Romney, an elitist billionaire, in the aftermath of Great Recession was a good idea. Romney may actually be a really great guy on a personal level. But participating in the class-warfare of elites right out in the open during his campaign was bad for his image and everyone else involved.
So the part where Bush says “the middle-class with thrive again” I read as meaning the ignorant underclass will thrive again – once they become less ignorant. Tight money works – it’s the underclass that needs the fixing.
Really, after having big expectations about the call for 4% GDP growth, I ended up insulted instead.
No more Bushes.