I can’t believe I am actually wasting time writing this, but someone needs to point out to Jimmy Carter that when it comes to Presidents with lousy economic policies, his Administration still takes the cake no matter how bad things have gotten in the current financial crisis. Under the Carter Administration, inflation skyrocketed into the double digits–reaching 13.5% at the time of the 1980 Presidential campaign. Unemployment was at 7.7% nationwide by 1980 and worse in various industrial pockets. Interest rates were at a shocking 21.5%. Any President who is responsible for such a sorry spectacle has no business lecturing successors on how to set economic policy.
Contrary to Carter, “spending, borrowing and tax cuts” have nothing to do with the current economic crisis. As anyone who hasn’t been living in a cave knows, the current economic crisis was brought about by the Community Reinvestment Act of 1977–signed by Jimmy Carter–along with Fannie Mae and Freddie Mac, all of which conspired to introduce Americans to the phenomenon of subprime mortgages. We thus started down the primrose path to offering mortgages to people at risk of not being able to pay those mortgages back. Mortgage-backed securities arose from subprime lending and while it is tempting to blame a lack of regulation for the emergence of MBSs, it has been conclusively demonstrated that deregulation is not the villain in this story. Indeed, opting for regulation–as Carter, with financial lust in his heart, appears so plainly to do–will have a deleterious policy effect.
I realize that Carter wants to obscure a clear examination of his calamitous economic record by trying to get people to dislike George W. Bush and I understand why Carter is resorting to tired shibboleths as he makes the effort. But that shouldn’t excuse Carter’s rhetorical dishonesty. Carter’s Pavlovian answers do nothing to address the current financial crisis and despite the news of the moment, the economic disaster Carter helped bring about does not even remotely look better over time.