Get Ready, Get Set...Here We Go Again

Without a doubt, the midterm elections of 2010 will be framed in terms of Obama versus Bush.  As the Democratic Party and Obama has let us know at every turn, this administration inherited such terrible calamities from the previous eight years that it will take time to reverse all those horrors unleashed at the hands of George Bush.  Political pundits like James Carville have noted and Politico has reported that the Democrats explicitly will attempt to yet again run their Congressional candidates against Bush and “the same failed policies of the previous eight years.”

Without getting into the obvious denials of reality regarding the loss of State houses in Virginia (no surprise) and New Jersey (should have been a wake up call) and the Senate seat in Massachusetts (ouch!), the Democrats tend to look not at the anger of the electorate, but to say that Obama’s policies have had enough time to take effect.  They argue that these electoral losses are not a referendum on Obama and, in fact, they are not.  What they are, more importantly, is a referendum on his policies- actually a rejection.

A couple of months ago, Carville, in editorials in major newspapers, laid down the gauntlet.  So some his “facts” need to be clarified.

LIE #1:  Health insurance costs doubled under Bush and spiraled out of control- From 2001 to 2008, health care costs increased, on average, 6.3% per year.  Over eight years, that is a 50.4% increase- not a “doubling.”  In the final three years of the Clinton administration, private health care costs increased an average of 7.2% per year.  In the 1980’s the rate of inflation for health care costs was 11.1% per year and 12.1% per year in the 1970’s.  If anything, the rate of inflation in health care actually decreased under Bush.

LIE #2: The number of uninsured has skyrocketed under Bush.  Actually, that is not true.  The Census Bureau indicates that the number of uninsured has remained a fairly steady 20% of the population since 1978.  Of course, the absolute number of uninsured has increased because the population overall has increased.

LIE #3:  Federal deficits went out of control under Bush and the Republicans.  In fact, liberal news oragnizations often take Republicans to task and characterize Republicans as myopic at best, hypocritical at worst to use this as a campaign issue.  Specifically, they attribute the deficits to an unfunded war in Iraq and tax cuts that they claim benefit only the rich.  Federal deficits are pretty much the norm whether a Democrat or Republican occupies the Oval Office.  What makes them bad is their size relative to the GDP.  Bush deficits, as a percentage of GDP, are as follows:

         2001-  +1.3% (a surplus);   2002:  -1.5%;     2003: -3.5%    2004:   -3.6%         

         2005:   -2.6%;      2006:   -1.9%      2007:    -1.2%   2008:   -3.2% (TARP)

The average deficit as a percentage of GDP over eight years of Bush was -2.1%, which is the same average over the previous four decades (from 1961 to 2000) which included Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush and Clinton.  By mu count, that makes four Democrats and four Republicans.  For comparative purposes, the deficit under 1+ years of Obama is -9.9% of GDP.  Most economists, maybe even Paul Krugman, will tell you that is not very sustainable for too long.

LIE #4:  Bush deregulation policies led to the financial crisis that Obama inherited.  By any standard, when it came to banking regulation enforcement, Bush exceeded his predecessors.  In 2000, about $1 billion was spent on financial regulations and by time he left office, spending had increased to $2.5 billion.  That is a doubling of spending.  When Clinton left office, there were 71,593 pages of regulations in the Federal Register.  When Bush left office, there were over 80,700 pages.  If the Democrats are insinuating that banking deregulation equals repeal of Glass-Steagall, that occurred in 1999 and was signed into law by Clinton after a 90-8 vote in the Senate.  Among those voting for that repeal were such suddenly concerned Senators as Chuck Schumer, John Kerry, Chris Dodd, Dick Durbin and Joe Biden.  Compare these facts with recent statements.  Barney Frank:  “This is the fruit of decades of deregulation.”  Or Nancy Pelosi:  “This is the result of the Bush administration’s eigt long years of failed banking deregulation.”

LIE #5: Bush/Republicans were asleep at the wheel during the financial meltdown.  In 2003, a liberal mouthpiece, the New York Times, wrote this editorial: “The Bush administration is rightly pushing for the Treasury Department to regulate the two giants, along with the network of federal home loan banks.  Freddie Mac and Fannie Mae provide the financing to lenders by creating a secondary market for mortgages.”  And this is exactly led to the financial collapse of 2008.  It would appear that Bush was actually five years ahead of being at the wheel as the New York Times noted in 2003.  And who was primarily responsible for killing this proposed action of the Treasury Department?  None other than Barney Frank.

There are plenty of facts and ammunition to counter these Democratic lies and mischaracterizations.  This election is not a referendum on Bush, but it just may be one on the policies of Obama.  So if the Democratic Party desires to run against George Bush and perpetuate lies while ignoring the anger of the electorate and their repudiation of Obama policies, they do so at their own peril.  In fact, if that is their strategy, then Republicans need no very little to make great gains.