Bush's economic non-policies

Bush has hit the road to promote his economic policies. Yet reading through the article, it was hard to figure out exactly what those policies are. Let's start with:

Bush was set to celebrate his recently expanded authority to negotiate international trade agreements and to point out the difference trade can make to farm states with bountiful harvests ready for the world's markets.

Bush has thrown the concept of free trade out the window when it has suited his political needs. But every nation in the word has a protectionist lobby, and those lobbies must be defeated to pass any free trade treaty. Yet Bush has set a bad example -- caving to the steel and agriculture lobbies and maintaining or instituting protectionist measures on their behalf. As the pro-free trade CATO institute wrote:

The root of the problem is the administration’s unwillingness to stand up to protected U.S. industries. Consequently, its credibility in urging other countries to face down their protectionist lobbies is abysmally low. The U.S. trade negotiating posture with Latin America currently boils down to “do what I say, not what I do.” Unsurprisingly, this is not going over well.

Now that it is politically expedient for Bush to be seen "doing something" about the economy, he suddely backs free trade again. The rest of the world, facing its own set of economic and political problems, is not ready to prostrate itself before Bush's insencere trade efforts.

And they are insencere. Bush is only interested in appearing engaged, and negotiations are a good way to accomplish that goal. In practice, Bush is more than happy to maintain protectionist subsidies for politically powerful industries. African nations recently called on the developed world -- including the US -- to open their markets to African agricultural goods. Canadian PM Chrétien echoed the sentiment, calling US agricultural subsidies "stupid". But there's no way Bush wants to further upset the ag industry. Indeed, he's already angering them over...

Cuba. If Bush was concerned about opening up the world's markets to us agricultural exports, then why the opposition to lifting the Cuban embargo? Farm state legislators, both Republican and Democrat, see the value in selling food to Cuba, but once again, Bush is a hostage to political pressures from a narrow (and irrational) special interest group (anti-Castro Cuban Americans). In Bush's White House, domestic politics will always trump trade. Other nations see this and are thus emboldened to follow suit.

Bush's other economic "initiative" is the refusal to spend $5 billion allocated to homeland defense. I'm confused about this measure -- as far as I thought, Bush either 1) could veto the bill; or 2) was required to spend allocated moneys. Perhaps someone out there could clarify this...

Regardless, $5 billion in the face of a trillion dollar plus budget is beyond inconsequential. And the money was earmarked for homeland defense issues, some very legitimate (like new computers for the FBI, and better communication for emergency response agencies). Killing the funds, which also included money for veteran's medical care, seems politically misguided. (Josh Marshall says the move was politically "stupid".)

Of course, the move makes a lot more sense in the face of this latest news nugget:

The U.S. federal budget is headed for a deficit of $157 billion this year, Congress' nonpartisan fiscal watchdog estimated on Friday in the latest report illustrating the sharp reversal in the nation's fiscal position as tax revenues plunged.

After 10 months of the current fiscal year -- which ends in September -- the government was running a deficit of $150 billion, a sharp reversal from the $172 billion surplus recorded over the same period last year, the Congressional Budget Office said in its August monthly budget review.

That's a $322 billion shift from last year. Or almost $400 billion from Clinton's last year in office.

So to recap Bush's bold economic initiative, designed to show the country he is on top of the situation, and "doing something", he has:

1. proposed a new free trade pact, even though he lacks credibility on the issue domestically and internationally; and

2. boldly tackled the squandered surpluses by killing $5 billion in homeland defense spending.

Am I being partisan, or is this really, really sad and pathetic?

Posted August 14, 2002 09:21 AM | Comments (3)