As we explained recently, Senator Marco Rubio’s response to President Obama’s State of the Union address presented nothing more than a warmed over version of Mitt Romney’s rejected agenda. Upon closer inspection, however, it turns out Rubio’s agenda is even worse that that, as he has apparently signed onto an attempted revival of the failed economics of George W. Bush and Calvin Coolidge.
The telltale sign here was Rubio’s identification of 4% growth per year as the solution to our economic problems:
But if we can get the economy to grow at just 4 percent a year, it would create millions of middle class jobs. And it could reduce our deficits by almost $4 trillion dollars over the next decade.
There is no dispute that sustained 4% growth per year would be a good thing economically (though ensuring that such growth reduces inequality, rather than simply benefiting a narrow economic elite is another story). As such, Rubio’s statement initially appears to be little more than a wishful statement, similar to saying that it would be great if student achievement improved or if people donated more to charity.
After a little sleuthing on the internet, however, it appears that Rubio was referring to the 4% Growth Project, an initiative of the George W. Bush Institute, which posits that our economic, tax, energy, and other policies should all be focused on the overarching goal of achieving 4% real economic growth for at least the next decade. The Bush Institute has published a book on this same topic, titled The 4% Solution, and the Institute is bragging on its website about how Rubio used its 4% growth idea in his speech.
The thought of using George W. Bush as an inspiration of one’s economic policy proposals is, of course, laughable. The economy grew at approximately a 2.5% per year rate during Bush’s presidency, and never got above 3.5% growth in any single year. Bush’s job creation performance was the worst of any President since records started being kept in 1939. Bush turned the Clinton era budget surpluses into deficits, with a $1.2 trillion deficit projected for 2009 when Bush left office. And, of course, eight years of the Bush Presidency culminated in the economic meltdown of 2008 that we are still digging our ways out of.
Digging a little deeper into the people behind the 4% Growth Project raises even further concerns. For example, the founding executive director of the Bush Institute is James K. Glassman, a conservative best known for co-authoring the wildly inaccurate book titled Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market (the Dow has never gotten higher than a little over 14,000).
In addition, the director of the 4% Growth Project is Amity Shlaes, a former Wall Street Journal editorial board member who recently finished the book Coolidge, which is part of a growing conservative effort to revive the economic legacy of President Calvin Coolidge. Coolidge, of course, was President from 1923 to 1929 who presided over a time of strong economic growth, but also massive economic inequality and Wall Street speculation that, seven months after Coolidge left office, culminated in the stock market crash of 1929 and the ensuing Great Depression. Yet conservatives such as Ms. Shlaes are trying to revise the widely accepted negative assessment of President Coolidge, and deflect blame for the Great Depression away from him, because Coolidge enacted an aggressive version of the conservative economic agenda of austerity, financial deregulation, and lower taxes on the wealthy that they so desire.
This revisionist history of Coolidge is disconnected from reality, as Jacob Heilbrunn artfully described in his review of Coolidge:
This is flapdoodle. No, Coolidge was not single-handedly culpable for the economic calamity of the 1930s. But neither can he be safely extracted from the ruin that followed his presidency. Quite the contrary. Coolidge was the pre-eminent cheerleader for the economic nostrums that led to the crash. His opposition to regulation allowed Wall Street and the banks to engage in rampant speculation and insider trading, practices that were not curbed until Joseph Kennedy was appointed head of the new Securities and Exchange Commission by Franklin Roosevelt to ban the very practices he himself had employed. So deep was Coolidge’s antipathy to any form of government action that he even viewed his gifted secretary of commerce and successor Herbert Hoover with a measure of contempt, calling him the “wonder boy” because he fell into the progressive Republican camp.
With yet another tribute about to appear — “Why Coolidge Matters,” by the former Claremont Institute fellow Charles C. Johnson, will be published in March — Coolidge will surely continue to enjoy a comeback on the right. Yet his actual record shows that he was an extraordinarily blinkered and foolish and complacent leader, no less than George W. Bush before the stock market plummeted in 2008. The bogus nostrums that Coolidge touted have directly led either to enormous deficits during the Reagan era or to outright catastrophe during the Bush era. Shlaes never stops to ponder the abundant literature chafing at and exposing the conformity and avarice of the Roaring Twenties, but the prosperity offered by Calvinism has always proved as elusive as the promise of the green light that Jay Gatsby watches at the end of Daisy’s dock. Conservatives may be intent on excavating a hero, but Coolidge is no model for the present. He is a bleak omen from the past.
Yet that “bleak omen from the past” is celebrated by the folks at the 4% Growth Project, with President Coolidge identified as a “Contributor” to the project.
Given their track records, taking economic advice from Bush, Coolidge, and Glassman seems about as useful as calling the Psychic Friends Network for advice on one’s love life. At a minimum, one would expect that people urging a return to the economics of George W. Bush and Calvin Coolidge would at least try to explain how repeating their economic policies would lead to a different result than higher economic inequality, increasing deficits, the Great Depression, or the Great Recession. But no such explanation is provided on the 4% Growth Project’s website. Instead, they just advocate for the same set of tax cuts for the wealthy, deregulation, and austerity (combined with good support for immigration reform that, unfortunately, Senator Rubio appears to be trying to scuttle) that led to disaster in both the 1920s and the 2000s. And Senator Rubio has apparently signed up to push that exact same disastrous agenda. No amount of wishful thinking about 4% growth can change that reality.