But the opponents of change, those who want to keep the Bush legacy intact, are not without resources. In fact, they’ve already made their standard pivot when things turn bad - the pivot from hype to fear. And in case you haven’t noticed, they’re very, very good at the fear thing ... When the economy is doing reasonably well, the debate is dominated by hype - by the claim that America’s prosperity is truly wondrous, and that conservative economic policies deserve all the credit. But when things turn down, there is a seamless transition from “It’s morning in America! Hurray for tax cuts!” to “The economy is slumping! Raising taxes would be a disaster!” Thus, until just the other day Bush administration officials were in denial about the economy’s problems. They were still insisting that the economy was strong, and touting the “Bush boom” - the improvement in the job situation that took place between the summer of 2003 and the end of 2006 - as proof of the efficacy of tax cuts. But now, without ever acknowledging that maybe things weren’t that great after all, President Bush is warning that given the economy’s problems, “the worst thing the Congress could do is raise taxes on the American people and on American businesses.”
If you think this was a bit unfair to the Bush cheerleaders, read Larry’s latest:
the Goldilocks economy remains alive and well. It’s still the greatest story never told ... And the reality is that today’s economic weakness is coming from the business side, not the sub-prime/housing/consumer side. We’re witnessing high energy and raw-material prices cause unit costs for businesses to rise faster than prices. That spells weakening profits … Right now the single best thing President Bush and Congress can do is slash the corporate tax rate for large and small businesses. Bush must reach out to Charlie Rangel and move the corporate tax to 25 percent from 35 percent. Then, instead of taxing successful capitalists as an offset, Congress can entirely abolish corporate-tax subsidy loopholes, special provisions, and other corruption-inducing K-Street earmarks. A middle-class tax cut to help families and small businesses would also work wonders.
Times are good? Give everyone a tax cut. Times are not so good? Give everyone a tax cut. In Larry’s world – there is no long-run government But the suggestion that today’s weakness is coming from the business investment side and not the housing investment side sort of ignores the fact that business investment has increased by more than 5 percent in real terms since last year, while residential investment has declined by more than 16 percent in real terms. Does anyone at NRO fact check Larry’s fluff before publication?