The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- It is an article of faith among Democrats that the administration of George Bush caused plagues, pestilence and the nation's economic woes -- and by derivation the political morass that bests Washington.
New York Times
asserts huge budget deficits have resulted from the Iraq and Afghanistan wars and Bush tax cuts -- which by the way lowered tax burdens for all Americans not just millionaires and billionaires.
Consider, in 2007 -- the last fiscal year before the Great Recession and the Democrats took control of Congress -- the deficit stood at $161 billion -- about one-tenth its present size. Two wars were at full tilt, and the Bush tax cuts and prescription drug benefits, which congressional democrats are always inclined to cite, were in place -- all for several years.
Hmm, how can that be? If Mr. Bush's policies caused the current big deficits, why did those require a change in party control, in Congress and then the presidency, to happen? Simple observation indicates those policies were not the cause, and huge deficits, like a lot of ills, were caused by the economic collapse of 2008, which was motivated by bad economic policies that political parties had a hand in creating.
Mr. Bush, like Mr. Obama, inherited a country with deep economic troubles -- granted Mr. Obama's situation was much worse, because the nation's structural problems have been cascading through cycles of expansion and recession for several decades.
Mr. Bush did pursue pro-growth policies and got unemployment down to about 5% before the Great Recession.
Roots of a Problem
The terrible event was caused by "financial reforms" Treasury Secretary Larry Summers persuaded President Clinton to push through Congress. Those repealed Glass-Steagall and other constraints on abusive behavior by financial institutions that now plague Wall Street and America, and a gaping trade deficit that is nearly all accounted for by excessive reliance on imported oil and a massive trade deficit, mostly with China, and the rest of Asia. The latter deficit is a major component of the imbalance in demand for goods and services between the economies of Asia, the U.S. and Western Europe, and a significant reason Asia grows at near 10% and the West at only about 2%.