Bush Tax Cut Flops, And No "Plan B" For Economy

by Robert Scheer

No kidding. The pity is that it took him so long to acknowledge the obvious, but then he was relaxing on his 26-day vacation while all those layoffs were announced.

For this president, who's never had to work to pay the rent or a mortgage, unemployment for others might even seem like a good thing, a chance for folks to relax as he does. Man, imagine how they would have lambasted Bill Clinton if this economic meltdown had occurred on his watch and if he had dared to seem so nonplused. The "they" are the talking heads that dominate the ever more illiberal media and who are willing to play the fool to help George W. look good. Bush does not look good, the stock market is in the toilet, profits are weak or nonexistent, unemployment is on the rise and consumer confidence, for good and obvious reasons, is crumbling.

The Clinton years are looking spectacular in retrospect, while all Bush has to show as an achievement for his time in office is a tax cut for the rich that was supposed to stimulate the economy but has been a bust. Funny that even though that gift for the wealthy is going to end up being paid for by funds collected for Social Security, Bush still brings it up as the source of our economic salvation.

What he doesn't seem to grasp is that most of the checks have been mailed and cashed, so far to no avail. The expensive platinum-plated bullet is proving to be a dud.

One of the president's elders should point out that the signature victory of his presidency has come up a cropper, so he should stop bragging on it. They should have warned him in the first place that a tax cut for the rich would not work as a stimulus to the economy because it is analogous to pushing on a string. Give money to the rich, and they'll squirrel it away. As Bill Gates once told me, you can only drive one fancy car at a time. Give that same money to people who are struggling to get by, and they will spend every penny, producing that famous multiplier effect that we all learned about in Econ 101.

George W. should have expected as much: If he does not get the buying habits of the rich, what does he know? What would Bush do with his and Laura's $600 rebate? Not likely that he would shout, "Hey, Laura, we just got this check from the government, let's blow it down at the mall."

So much for the tax cut bust, but what does he do now? The other Republican panacea, monetarism, also has failed miserably. Who'd have thunk it, that the great Alan Greenspan and his successive rate cuts would prove impotent. But they have, and what's a free market Republican ideologue to do when tax cuts and the Federal Reserve have failed to stem the hemorrhaging of the economy?

Why, it's back to the wisdom of John Maynard Keynes and the Social Democrats. The federal government has to spend money to boost the economy, and the best way to do that would be to put money quickly into the hands of people who need to spend it. A check to the working poor who qualify for the earned-income tax credit would do the trick.

Too compassionate for this conservative? Well, how about a gift of a fast computer, the latest software and high-speed Internet access to every classroom in the land? That might give the NASDAQ, which has lost more than three-fifths of its value in this downturn, a shot in the arm. It might get the technology sector off life support and do more for education than terrorizing kids and teachers with test scores.

Heck, you could just repair the potholes in every city, big and small, and look like an economic wizard.

Probably too socialistic for W. The only way Bush will spend real money is on the military, needed or not. Too bad he'll blow it on pie-in-the-sky antimissile technology that only fattens up the defense contractors and fuels a nuclear arms race.

He'd do better to double the pay of all enlisted military personnel, who, far from being rich, would spend it in a nanosecond.