I generally agreed with your commentary on Keynesian and the need for public spending to get the economy moving again. This seems so obvious yet it is debated.
But, I disagree with you putting all the blame on Bush. No doubt his tax cuts were a contributing factor and continue to be a problem for the federal budget, but Clinton deserves a lot of blame for the economic mess. His policies started the housing bubble by pushing lenders to loan loosely for home ownership. Perhaps he had a good intention — getting as many Americans as possible into home ownership — but that was the seed of the bubble. He rode that bubble and the Internet bubble to the surplus you mention. He was lucky to leave before the bubbles inevitably burst.
Even worse, his policies allowed the contagion of the burst bubble to create a massive economic meltdown. He ended Glass Stegall, decided that the derivatives market should not be regulated, put in place NAFTA and trade policies that empowered corporations at the expense of governments and created interlocking economies that brought the world down together. In many respects, I blame Clinton more than Bush for the extent of the economic damage. Yet, he tends to get off without blame — even with praise.
KZ
I would generally agree with your assessment. Clinton however, did not have Dick Cheney pushing him into an unnecessary and costly war, which also helped push the U.S. over the top financially.
Also I have to wonder how easily the banks could have been pushed into making loans to unqualified buyers if they were not raking in huge origination fees.
What I’d really like to see however is some use for all these people hanging in the social safety net. We’re paying to support them so could we at least get 20 hours of work from them each week? These people could retain or gain new skills, stay productive, and we could certainly use the help.
EDITOR: Amen. A New Deal type Job’s Corp for our recent and less recent high school and college graduates? Most people want to work.
Well, it was Phil Gramm who pushed for the repeal of the provisions of Glass-Steagall that had separated investment banking from commercial banking, as I’m sure you know. But yes it’s fair to place some of the blame on him for signing his name to it.
Again with derivatives regulation, to whatever limited extent Clinton was involved, he seems to have simply trusted his Federal Reserve Chairman, his Treasury Secretary, and the Chair of the Council of Economic Advisors to handle the arcane issue.
The housing bubble was just part of the story. It was the deregulation of the financial sector that packed the bubble with dynamite. I blame deregulation mania.
PBS Frontline has produced some excellent documentaries on this topic, including Inside The Meltdown, The Warning, and Money, Power and Wall Street
http://www.pbs.org/wgbh/pages/frontline/warning/view/
http://www.pbs.org/wgbh/pages/frontline/meltdown/view/
http://www.pbs.org/wgbh/pages/frontline/money-power-wall-street/#a