President Obama’s re-election strategy will be predicated on blaming the economic stagnation on George W. Bush, and, thus, the GOP, my colleagues Frank Cannon and Jeff Bell persuasively argued recently in The Weekly Standard. Cannon and Bell are right. And, that said, Bush’s fiscal policies were not the culprit.
Bush was mugged by the Fed. The Fed produced a Hurricane Katrina of louche money. The Fed produced the housing bubble, which, popping, caused the panic of ‘08. The Meltdown developed on Bush’s watch. More voters therefore still blame Bush than Obama for the lousy economy. Obama is exploiting that at the heart of his campaign strategy. But Obama’s strategy of blaming Bush can be forced to backfire.
Flipping the Obama campaign on its back requires that the Romney campaign exploit this vulnerability: Obama has embraced the same Fed whose policies caused the catastrophe. Romney can use this to turn Obama’s line of “Blame Bush” attack back on Obama. But he can do so only if his political team shows the same degree of savvy as does his economic team.
Romney’s economic team is led by R. Glenn Hubbard. Hubbard, although having done a stint as chairman of the council of economic advisers under Bush, gets it. He unflinchingly attacks the Fed policies that torpedoed the economy. If Romney’s political strategists will pivot and open fire on the real culprit, defective central planning by the central bank, Obama’s main campaign thrust is parried and can become fatal to the president’s reelection hopes.
Cannon and Bell observe that “Obama strategists would treat Romney’s selection as a vice presidential running mate of anyone who could be portrayed as a Bush-era economic policymaker (such as Ohio senator Rob Portman) as a gift from the political gods.” This is emphatically true applied to “a Bush-era economic policymaker” who misunderestimates how critical monetary policy is in creating an economic climate of job growth and prosperity — or, as now, despair.
The GOP seems to have gotten it through its thick head that tax increases — like the preprogrammed “Taxmaggedon” threatening America — are terrible for the economy and job creation. Most voters clearly understand this. But good tax policy alone is not enough. Good money — keeping the dollar healthy — was as much part of the foundation of the Reaganomics magic as was cutting marginal tax rates. Most voters understand this too.