First things first: pay no attention to apologists who try to defend the Bush economic record. Since 2001, economic conditions have alternated between so-so and outright bad: a recession, followed by one of the weakest expansions since World War II, and then by a renewed job slump that isn’t officially a recession yet, but certainly feels like one.
Over all, Mr. Bush will be lucky to leave office with a net gain of five million jobs, far short of the number needed to keep up with population growth. For comparison, Bill Clinton presided over an economy that added 22 million jobs.
And what does Mr. Bush have to say about this dismal record? “I think when people take a look back at this moment in our economic history, they’ll recognize tax cuts work.” Clueless to the end.
Yet even liberal economists have a hard time arguing that Mr. Bush’s cluelessness actually caused the poor economic performance on his watch. Tax cuts didn’t work, but they didn’t create the Bush bust. So what did?
At the top of my list of causes for the lousy economy are three factors: the housing bubble and its aftermath, rising health care costs and soaring raw materials prices.
Sunday, July 13, 2008
The causes of our crappy economy
Krugman on what has caused this decade's crappy economy: