Saturday, January 17, 2009

A Farewell to George W. Bush

On Tuesday, January 20, 2009, President George W. Bush will cease to be president of the United States as Barack Obama takes the oath of office. Many people will be happy to see him step down. For the last half of his presidency, he has been dogged by low approval ratings. Many, especially in the media, consider him to be the worst president ever. He has been charged with being everything from an imperialist mastermind to a mindless puppet.

In the 1980s, President Reagan was referred to as the Teflon President because bad publicity never stuck to him. President Bush should be referred to as the Velcro President because everything seems to stick to him, even things that are not a result of his policies. A fair look at President Bush’s record reveals that he is neither the worst nor the best president that the United States has ever had.

The most important aspect to the Bush legacy deals with his response to the 9/11 attacks. In the dark days of 2001, President Bush rallied the nation and helped to prevent a panic. He took the necessary steps to help prevent future attacks on the United States as well. Many of these steps have been criticized, such as his program of eavesdropping on telephone conversations between terror suspects and American citizens (which was recently ruled legal by a federal intelligence court) and the detention of Taliban fighters and other terrorists at Guantanamo Bay, Cuba. President Bush’s decision to take the fight to the terrorists, rather than waiting for them to attack American targets, is directly linked to the fact that the US has not experienced a major terror attack since 9/11.

A second controversial legacy is his decision to depose Saddam Hussein. Based on the information available at the time, this was the right decision to make. The intelligence agencies of virtually every allied country believed that Iraq possessed weapons of mass destruction and was working to develop nuclear weapons. It was also common knowledge that Iraq was supporting terror groups worldwide. Additionally, Iraq remained in a state of war with the US, firing at Coalition aircraft patrolling no-fly zones on an almost daily basis. Finally, the world was aware of the atrocities committed by Saddam’s government, including the mass murder of hundreds of thousands of Iraqis. Any one of these actions, by itself, would have justified the removal of Saddam.

Since the regime fell, we have learned that many of the pre-war statements were not incorrect. The primary failure was the inability to find large stockpiles of WMD. It has been determined conclusively that Saddam’s Iraq was a state sponsor of terrorism. UN inspectors found that Iraq possessed al Samoud 2 missiles that violated the Gulf War ceasefire. We also learned that Saddam had corrupted the United Nations Oil-for-Food program. Saddam bribed UN officials and businessmen worldwide as a means to successfully circumvent the sanctions imposed after the first Gulf War. Saddam was working to eliminate the sanctions totally, after which, he would have restarted his weapons programs. Finally, the discovery of artillery shells in Iraq containing the deadly nerve gas sarin were conclusive proof that Saddam had once possessed chemical weapons. The question of what happened to these weapons was never conclusively answered.

President Bush is ultimately responsible for the victory in Iraq. After 2004, as al Qaeda funneled fighters into the country and violence increased, many called for a withdrawal and stated that there was no military solution possible in Iraq. President Bush, along with Senator John McCain, believed otherwise. They fought Congress for money to send additional troops to secure Iraq. This “surge” in forces eventually led to what is now known as the Anbar Awakening. New commander General David Petraeus shifted to a strategy of clear-and-hold, which removed American troops from fortified bases and placed them alongside Iraqi civilians. The reduction in violence was swift and immediate. Because President Bush remained true to his principles, American troops will be leaving Iraq under much different circumstances than the Democratic withdrawal plan envisioned.

President Bush also had foreign policy successes that had nothing to do with the War on Terror. For instance, he helped supply African nations with lifesaving anti-AIDS drugs as part of the President’s Emergency Plan for AIDS Relief (PEPFAR). Created in 2003, PEPFAR focused on both treatment and prevention of AIDS in Africa and has saved countless lives while helping to slow the spread of the disease.

President Bush also took the lead in an initiative to stop human trafficking and sex tourism. Under President Bush, the Department of Justice has not only sought to prosecute child pornographers, but also US citizens who travel abroad to have sex with children in other countries. The Bush Administration also worked internationally to stop the trafficking of modern day slaves, particularly children and young women, who are often used for sexual purposes. As President Bush said, “Human life is the gift of our Creator— and it should never be for sale.”

On the domestic side, President Bush’s largest success was undoubtedly his tax cuts. When he took office in 2001, the country was entering a recession. Eight months later, the shock of the 9/11 terror attacks threatened to slow the economy even further. President Bush’s across-the-board cuts to tax rates provided the spark needed to restart the economy. After the tax cuts were enacted, the United States entered a long period of sustained growth, in which the US outperformed its peer group of countries (which includes Canada, the European Union, and Japan).

Interestingly, after the tax cuts took effect, federal tax receipts increased. The federal tax share of the GDP remained near the historical average, and even climbed above the average prior to the current recession. At the same time, the top taxpayers shouldered a larger percentage of total taxes paid, while the bottom taxpayers paid less.

George W. Bush also had a solid record of supporting pro-life legislation. He banned the use of taxpayer funds to pay for abortions in other countries as well as banning the use of federal funds for embryonic stem cell research. He also signed several important pro-life bills into law including the Partial-Birth Abortion Ban Act, the Unborn Victims of Violence Act, and the Born Alive Infants Protection Act. He fought UN attempts to recognize a fundamental right to abortion and appointed judges who interpret the law as it is written, rather than substituting their own morals and values. These constructionist justices will likely have a positive impact on many other issues as well.

It would not be fair to discuss President Bush’s legacy without addressing his failures. Many of his problems resulted from poor communication. America’s image might have been less tarnished internationally if the United States had made better use of propaganda and communication in the War on Terror. Many domestic critics accused the Bush Administration of imperialism and war crimes and these charges were never answered loudly or strongly enough. The media bias in this country and around the world is to blame for this as well.

Many of President Bush’s most notable failures were on the domestic side. One of the most serious lost opportunities were his failed attempts to reform Fannie Mae and Freddie Mac. As far back as 2001, the Bush Administration believed that Fannie and Freddie could be a problem. Despite numerous attempts at reform, nothing was done until the problem could no longer be ignored by Congress and the economy was in shambles.

President Bush’s attempt at Social Security reform likewise was blocked by Congress. Unlike Fannie Mae’s excesses, Social Security is still a ticking time bomb. Taxes paid into Social Security go into a trust fund, which was long ago robbed by Congress. According to current projections, in 2017 Social Security will begin paying out more money than it takes in. At that point, unless benefits are cut or taxes are increased, Social Security will be totally bankrupt by 2041. Similarly, Medicare will be bankrupt by 2019, if current trends continue.

President Bush’s proposal involved letting workers who chose to do so invest their Social Security money in the private accounts. The money in these accounts could then be invested in a variety of financial products. Investing one’s Social Security money in the stock market over the long term could provide much greater retirement benefits than is typical under traditional Social Security, especially given that the program will likely be bankrupt by the time workers born after 1990 retire. At present, the twin crises in Social Security and Medicare are still unresolved.

A more recent failure of the Bush Administration was its inability to reform immigration. In the aftermath of 9/11, it became obvious to many Americans that it was no longer a good idea to allow “undocumented workers” to simply walk across our borders unmolested. Similarly, many immigrants who entered the US legally overstayed visas and remained in the US illegally or falsified visa applications and travel documents. The 9/11 hijackers used a combination of falsified applications, new passports (to hide travel to training camps in Afghanistan), gaming the systems, and overstaying visas to remain in the US until 9/11. Most were also able to obtain state identification, such as driver’s licenses, in spite of the fact that they were foreign nationals on temporary visas.

The Bush Administration’s attempt at immigration reform failed for several reasons. Most obvious was its size. The attempt was a bipartisan effort at comprehensive immigration reform, remaking the whole system. The bill eventually drew opposition from both the left and right. The right opposed the idea of amnesty for illegal aliens and doubted that the borders would ever be secured. The left opposed restricting the flow of “undocumented workers” into the United States for humanitarian reasons. In the end, a grass roots effort derailed comprehensive reform.

In October 2006, President Bush did sign the Secure Fence Act, which authorized the construction of a 700 mile border fence between the US and Mexico. Bush also used the National Guard to patrol some border areas in the southwest and asked Congress to add 6,000 Border Patrol agents. Under President Bush, Immigration and Customs Enforcement (ICE) significantly stepped up prosecution of employers who knowingly hire illegal aliens. Much of our borders remain unsecured, however, and vulnerable to passage by terrorists.

For all the small failures, there are two glaring errors that will undoubtedly cause problems for the United States long after President Bush leaves office. One of these errors is in the realm of foreign policy, while the other relates to domestic policy.

In foreign policy, President Bush’s most glaring omission was in not dealing with Iran’s nuclear weapons program. On February 9, 2003, the oil rich nation of Iran revealed the existence of several nuclear facilities that would eventually be able to enrich uranium. They announced in 2006 that they had successfully enriched uranium, a necessary step in creating nuclear weapons. Iran has repeatedly stalled against UN demands for inspections and a halt to enrichment, while at the same time, purchasing advanced air-defense systems from Russia (who is also providing nuclear reactors). Current estimates are that Iran may have an operational nuclear weapon as early as 2011.

A large part of the difficulty in dealing with Iran was a National Intelligence Estimate issued in 2007, which assessed that Iran’s nuclear program was ended in 2003 and had not been restarted. This assessment seemed to fly in the face of the statements of Iran’s leaders, but, due to Bush’s problems with intelligence reports in Iraq, made it politically impossible to use military force to destroy the Iranian nuclear facilities, even in light of the fact that Iran was implicated in assisting Iraqi insurgents to kill American soldiers. The determination of Iran’s leaders to gain a weapon to destroy Israel made a diplomatic option unworkable. President-elect Obama is unlikely to have success diplomatically and is even less likely to use military force against Iran. At present, the Iranians are still working on their bomb. The first indication of their success may be a mushroom cloud over New York or Tel Aviv.

As dangerous as nuclear weapons in the hands of Muslim extremists would be to the US, the unprecedented infusion of government money into the private sector may be even more dangerous to American society in the long run. Amid the collapse of the mortgage industry, in February 2008 President Bush and Treasury Secretary Paulsen first passed the Economic Stimulus Act of 2008, then, when that failed to restart the economy, pressured Congress to pass the Emergency Economic Stabilization Act (EESA) of 2008 in October. Neither stimulated nor stabilized the economy.

The danger in these laws lies in the fact that Congress appropriated $700 billion to the Treasury with very little direction on how to spend it. Many experts believed that, if anything, the government should have purchased “toxic” securities from banks in order to free up credit markets. Instead, the Treasury chose to force nine major banks to sell stock to the government. The government also engineered several takeovers of failing banks. Additionally, in December 2008, $5 billion in bailout money was injected into GMAC, the parent company of Chrysler, with the promise of more money coming in 2009 with a larger Democratic majority in Congress. The Congressional Budget Office estimates the 2008 deficit at $1.2 trillion, or 8.3% of GDP. This will be the largest deficit since WWII.

It is here that the greater danger lies. By creating a precedent for government intervention, and takeover, of the market, President Bush has set the stage for even greater meddling by the Obama Administration. Bush has already requested the release of the second $350 billion of the EESA from Congress at Obama’s request. Obama’s advisors say that he also plans to ask for additional stimulus that will cost at least $775 billion. This could put the deficit as high as 15% of GDP. This is even before many of Obama’s campaign promises, such as universal healthcare, or a bailout of Social Security and Medicare are considered.

Many of Obama’s stimulus plans are of questionable immediate economic value. These include a tax credit for middle and lower income taxpayers, many of who already do not pay taxes, rebuilding roads and bridges, and money for schools and education. Additionally, cities, states, and numerous industries are all lining up to request stimulus money from the taxpayers.

The current crisis resembles the Japanese recession of the 1990s, now known as “the Lost Decade.” Both recessions began with crashes of the real estate and stock markets. The Japanese, like our current government, attempted to stabilize and prop up failing companies. This policy led to prolonged economic suffering and an extremely slow recovery. Even twenty years later, Japan’s stock market has not fully recovered to the levels of the 1980s. The United States suffered a similar lost decade in the 1930s when President Roosevelt’s interventions turned a recession into the Great Depression.

The temptation to continue the government intervention in the market started by President Bush is likely to be too much for Obama and the Democrats to resist. This is likely to continue the recession for years to come. This would lead to lost wealth for the majority of Americans.

Additionally, the higher taxes that will eventually be needed to pay for the stimulus will likely lead to lost economic freedom. We are likely to see vastly increased government regulation in an attempt fix the current crisis and prevent future problems. The Index of Economic Freedom shows a strong correlation between economic freedom and national income. Even in today’s economic climate, the US outperforms other countries, even the social democracies of Europe that the Democratic Party seeks to emulate.

President Bush’s legacy is not firmly established. Other presidents who were unpopular while in office have enjoyed the vindication of history. Harry Truman is a prime example. President Bush’s defense of the United States and his liberation of, not one, but two repressed countries will likely assure that history will be kinder to him than public opinion has been.

FNMA Reform
Social Security
Financial bailout
Digest Vol. 09 No. 2,


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