By Waller H. Wilson
Don't just blame it on Bush!
Leroy Donald's letter to the editor, "Enough with the Bush Blaming," in the Aug. 18 edition of the Northern Virginia Daily misses the point. Lest we forget, the financial harm that Mr. Donald speaks of was not caused by overspending. It was caused by the financial meltdown which left the 99 percent without jobs and those with jobs without credit and those with jobs and credit scared to death to spend their money.
Republican policies (Bush policies and now Romney policies) call for tax cuts, less regulation and more money for the military. Those policies, not overspending, resulted in the Great Recession, which left us in a very deep hole. Obama made policy decisions that while unpopular stopped the bleeding of jobs and prevented the problem from becoming significantly worse. And against all odds and without any help from Republicans, we have slowly been digging our way out of that very deep hole ever since.
I would like to know what Mr. Donald and the Republicans think is an appropriate economic engine for recovery. Have they told anybody yet?
There is only one economic engine for recovery: increased demand for U.S.-produced goods and services. It is absolutely the only thing that will get us going again. Tax cuts create demand only to the extent that those benefiting from the tax cuts spend their money on U.S. produced goods and services. Yes, watch out for that word "spend."
Following the Bush financial meltdown, many if not most of those who had disposable income decided to save it rather than spend it. The 1 percent who had it in spades decided to sit on it -- not spend it, not invest it. So did the rest of us. Why? Because we were scared that things might get worse.
Now why would we think that? Because long before the stimulus had had a chance to work Republicans began to scare us by saying that Obama's policies had failed. That is what you call a self-fulfilling prophecy. When it became clear that Obama's policies were succeeding, the Republicans decided to scare us again with their refusal to extend the debt ceiling. And now we have the "fiscal cliff" to scare us. You have to give them credit. The Republicans have done a really good job of scaring us into not spending. No spending, no demand, no jobs. It is that simple.
Regarding Republican regulatory policy then and now: The lack of strong regulations and/or the weak or nonexistent enforcement of those regulations was the immediate cause of the financial meltdown. If you don't think so, just remember "No Doc" mortgages and what the big New York investment banks did with those "No Doc" mortgages. They bundled them and then paid the essentially unregulated ratings agencies to give those bundles AAA ratings (the best possible). When the economy slowed down during the last years of the Bush administration, people who lost their jobs couldn't pay their mortgages, and the whole financial house of cards crashed. Did they really think the real estate boom would go on forever and ever?
Regarding military policy: Republican policies are the same, then and now -- spend more on the military. Military policy is debatable, if you don't mind risking World War III. But it is undoubtedly good economic policy because at least most of what we spend on the military is spent for U.S.-produced goods and services. It certainly helped prop up their financial house of cards during the Bush administration.
Don't just blame it on Bush. His policies were just Republican policies and they still are. Be careful who you vote for in November!
Waller H. Wilson is a resident of Front Royal.