Fixing His Own Mistakes?

Last Thursday President Bush talked about the economy while visiting Bakersfield, CA. As usual these days, he used the chance to lobby for making the 2001 tax cuts permanent:

[W]e need to make sure the tax cuts are permanent. See, the tax cuts are set to expire. That’s what a lot of people don’t understand. This is an important part of the dialogue in Washington, D.C. now, is how to make sure the economy continues to grow. These job creators need certainty in the tax code. You can’t have taxes go down one year and up the next. They need certainty when it comes to planning. They need to be able to have certainty when it comes to their investment deductibility. That’s what they need. And yet aspects of the tax code are set to expire.

Those dastardly, devious Washington D.C. types! How could they arrange such a terrible tax system where taxes are going down one year and up the next?

In fact, he’s right – uncertainty in the tax code really does tend to inhibit business spending. So who is responsible for these down-one-year, up-the-next tax cuts? Of course, Bush did sign these down-and-up tax cuts into law back in 2001 – but at least he must have really chewed them out for setting up such a crazy tax scheme, right?

George Bush, June 7, 2001: Remarks by the President in Tax Cut Bill Signing Ceremony:

This tax relief plan is principled. Today is a great day for America. It is the first major achievement of a new era, an era of steady cooperation. And more achievements are ahead. I thank the members of Congress in both parties who made today possible. Together, we will lead our country to new progress and new possibilities. It is now my honor to sign the first broad tax relief in a generation.

Remember this, whenever you hear Bush talk about how harmful it is for the economy to have taxes changing erratically from year to year: he didn’t think it was such a bad idea back in 2001. In fact, he thought the 2001 tax cut plan, with its down-and-up taxes, was a great idea. Why? Because, as has become standard operating procedure in the Bush White House, political expediency trumped economic sensibility. And that is exactly why after three years in office, the Bush White House has been unable to do anything to help the economy.