B-School Profs Bash Bush Economic Policy

Businessweek has an article about a letter that originated at Harvard blasting Bush's economic policies.

"The data make clear that your policy of slashing taxes — primarily for those at the upper reaches of the income distribution — has not worked," the letter says. "Nearly every major economic indicator has deteriorated since you took office in January, 2001…[and] if your economic advisers are telling you that these deficits can be defeated through further reductions in tax rates, then you need new advisers."

First of all, I would say that slashing taxes for the wealthy is more about fairness than economics. Secondly, we are at war, which is probably causing a large part of the deficit. Do these professors give Bush any direction?

What should Bush do? The letter doesn't spell it out exactly, but the signers point to the basic economics textbooks Bush would have read in the 1970s: Reduce the budget deficit before it starts to act as a dead weight on the economy and forces interest rates higher. That means spending cuts and tax increases. "You can't have long-term tax cuts and have spending continue to grow," Wells adds. Or as the letter says, "from a policy standpoint, the clear message is that more of the same won't work."

Yes, deficits are generally bad economic policy. But so is a nuclear bomb going off in Manhattan. If deficits due to a war on terror help prevent that, it is money well spent.

I am no fan of Bush. I support stem-cell research, which he doesn't. I was against the prescription drug bill, the steel tariffs, the campaign finance reform bill, and the farm subsidy bill. While I don't think Bush is stupid, I don't think he is sharp enough to be President either. But could I vote for Kerry? I don't think so. To me it has come down to voting for the "tax and spend" Democrats or the "cut taxes and spend" Republicans. Does anyone care about shrinking the size of government? Nope. Does anyone care about introducing accountability into the public school system so that Americans don't fall behind the rest of the world? Not really (though they will both pay lip-service to it). So to me it basically boils down to the war on terror, which means as of now, Bush will get my reluctant vote.