Uncle Sam is hard at work for U.S. corporations
Monday, September 27, 2004
WALTER WILLIAMS
GUEST COLUMNIST
In assessing President Bush's four-year economic
performance, the standard measures show overwhelmingly
that his record puts him at the bottom among the post-World
War II presidents.
Also, the average family has lost ground during Bush's
presidency. Since 2000, median family income (adjusted for
inflation) has dropped by $1,535, or 3.4 percent, to $43,318.
When the eight previous postwar recoveries are measured two
years out from their low points, the average annual real
growth rate is 5.7 percent. Bush's economic growth rate is
one-third lower at 3.6 percent, the lowest annual growth rate
except for his father, George H.W. Bush.
George W. Bush has the worst performance on job creation of
the postwar presidents with roughly a million net jobs lost
since his inauguration. He will join Herbert Hoover as the
only presidents to experience such a net decline of jobs.
In 2003, the number of people in poverty and those with no
health insurance rose for the third straight year. Since 2000,
the ranks of the poor had increased by 4.3 million persons.
The number of individuals who were uninsured reached a
record high of 45 million. Bush's 2003 budget deficit of $445
billion is the highest in history.
In the face of such results, Bush has sought to put the blame
on extraordinary difficulties, such as the recession and the
terrorist attacks, and claim that he has turned the economy
around. His administration has ballyhooed 12 straight months
of job gains that yielded 1.7 million new jobs -- an average of
140,000 new jobs a month -- as a signal achievement.
These gains, however, fall almost 40 percent below the
average increase of 230,000 jobs a month at comparable points
after the last two recessions in the early '80s and early '90s.
Thus, the Bush administration's one-year shortfall is over a
million new jobs (12 months times 90,000 fewer jobs) less
than the average performance by Presidents George H.W.
Bush and Clinton.
The assertion that his performance has suffered because of
more difficult problems is questionable. What Bush
confronted, even the attacks, were not necessarily tougher
economic challenges than those faced by past presidents.
Rather Bush's dismal performance on almost every economic
measure comes from his inefficient tax cuts totaling $1.7
trillion.
Such tax reductions stimulated economic activity but were far
too costly and became the main cause of the massive deficits.
In their April 2004 report , "Tax Returns," Isaac Shapiro and
Joel Friedman, senior fellows at the Center on Budget and
Policy Priorities wrote that "the tax cuts are responsible for
more than half of 2004 deficit."
Efficient stimuli would have been concentrated on putting
funds in the hands of those who would spend it rapidly.
Shapiro and Friedman have noted that Bush spurned the most
efficient means, such as extending unemployment insurance
benefits that generate 73 cents per dollar of lost revenue.
Instead, he unwisely opted for a dividend tax reductions that
only generated 9 cents, and hence far greater budget deficits.
The most dangerous results from Bush's economic policies are
those that have provided corporate America and the wealthy a
disproportionately high share of the benefits and greater
power at the expense of ordinary citizens.
Columbia University historian Alan Brinkley has written:
"Since 1932, we have not had a president who has been more
closely allied with business and more sympathetic to large
and powerful corporations."
During the past three years, Bush's tax cuts have provided as
much of his total reduction in income taxes to the top 1
percent of the population, whose average yearly earnings are
$1.2 million, as to the bottom 80 percent. The middle class
now has a larger share of the tax burden and faces a
materially heightened threat to its long-term economic
security.
The worsening income disparities between the rich and
ordinary citizens -- the greatest since the 1920s -- have been
a major factor pushing the nation into plutocratic governance.
The tax reductions for the wealthy and major business firms
provided money that helped fuel the campaigns of Washington
politicians.
Under George W. Bush, the United States has become a
government of the corporation, by the corporation and for the
corporation, to paraphrase Abraham Lincoln's Gettysburg
Address. Such an entrenched plutocracy is totally
incompatible with the form of governance created by the
Constitution to support representative democracy.
This dimension of Bush's failed fiscal policies carries his
performance into a different, frightening realm from his
postwar predecessors. My overall assessment is that Bush's
four-year economic record is not only the worst in the postwar
era but also by far the most dangerous for America's future
economic and political health.
Walter Williams is a professor emeritus at the University of
Washington's Daniel J. Evans School of Public Affairs and is the author
of "Reaganism and the Death of Representative Democracy."
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