Now, to return to what was supposed to be the main point of my coverage of the Rove speech at AEI this morning: Overall, it was a tour de force. Rove did quite well what the administration long needs to have been doing better and more often — and what our feckless Congress has not done with even a smidgen of energy or success — which is to tout the brilliant results, overall (at least short-term; the higher spending is more a long-term problem than a short-term one), of Bush’s economic policies.
The fact is, as I argued here, we in the United States are living today in the best economic times in human history. Without making such a sweeping claim as that, Karl Rove brilliantly reviewed the evidence: By December of 2000, BEFORE Bush took office, business leaders meeting in Austin with the Pres-elect quite rightly told Bush he would be inheriting “a hurtin’ economy” — because the NASDAQ had lost 50% of its value just since March of that year, the broader stock indices were all down since January of that year, the tech bubble had burst, and the recession had already started (which was confirmed with the next quarter’s statistics). And that was BEFORE the 9/11 attacks caused $100 billion of economic losses, before the corporate scandals (Enron, etc) that had occurred before Bush took office came to light (roiling the markets and the economy even more), before the economy lost 1 million new jobs in the next year (again, this was all before the first Bush economic measure even began to take effect). Yet the Bush policies of tax cuts and trade liberalization (and to a tiny extent, regulatory relief, although Rove didn’t talk about it) kept the bottom from falling out, kept the recession short and shallow, and then spurred a phenomenal rebound.
Particularly important were the dividend and capital gains tax cuts signed into law on May 28, 2003, Rove said. And he’s right. He noted that they worked exactly as promised: Between that date and Sept 30, 2005, top American corporations raised their dividend payments a whopping 727 times, thus helping shareholders and pensioners, etc. immensely. The stock market is again nearing the record highs it last reached a full year before Bush took office. Tax revenues, even adjusted for inflation, are at an all-time high. And the tax burden is falling MORE heavily, not less, on the wealthy: The share of overall taxes being paid by the top 1% of earners ($317,000+) is up 1.5% since May 28 of 2003; it’s up 5% for the top 3% of earners; and up 3 percent for the top 5 percent (141+K) of earners. Overall revenues, BECAUSE OF (not despite) the tax cuts last year were $274 billion (15%) greater than the official forecasts; so far this year, they are exceeding forecasts by 11%, or $137 billion. Despite the recession of 2001, real disposable income in the U.S. has grown 14% since Bush took office. Yet inflation so far (and for the entire Bush presidency) has stayed in check; for the past 12 months, Rove said, it has run at 2.1 percent. The American economy in recent years has added more jobs than have economies in the entire European zone and Japan combined.
Which is why, on the investment tax cuts, Rove is right to say that “The President’s critics …could not have been more wrong.”
Finally, kudos are in order for Rove for NOT backing down from the administration’s advocacy of personal retirement accounts within Social Security. Although the White House tactics on this issue last year were muddled and ineffective, and although the vast bulk of congressional Republicans cut and run, on what COULD have been and may one day be a winning issue, like so many skittish jackrabbits (and that is being KIND to the cowards!), the president’s courage on the subject was extraordinary, and he was right on the substance. Anyway, Rove this morning again explained the necessity and the wisdom of personal retirement accounts within Social Security.
The quote of the day, though, came later on, when answering a question from CNN’s John King about political considerations. “Get the right policies,” said Rove, “and the politics will take care of themselves.” Too few GOPers on Capitol Hill understand the profound but oft-proven truth of this statement. But Rove is right. Do the right things, for the right philsophical reasons backed by the best empiracal evidence, and the results will be good and the American people will respond positively. Ronald Reagan proved that time and again. Rove, for all his alleged cynicism (if you believe the mainstream media), truly seems to understand and believe this Reaganesque insight — and so does President George W. Bush.
These guys play hardball sometimes, but idealists (NOT ideoLOGUES, by the way) as well as cynics can play hardball; and Rove and Bush are far more idealistic, in the best sense (i.e. a realistic sense, not a dreamy one) than anybody seems to give them credit for.
Memo to White House: Get Rove out in public more often. He does a very good job.