Bush Economics

I bitch about the budget deficit a lot on these pages, but I figure it's time to go a little deeper into what sucks about Bush economic policy. The starting point is this brilliant article from last year in the Washington Monthly:

As president, Bush chose a group of senior advisors whose economic backgrounds have a century-old flavor. His vice president is an oil man. His treasury secretary, John Snow, is a railroad man. The White House's economic and fiscal policies have been similarly designed to provide life support for these aging red-state industries: $190 billion in subsidies for farmers; tariffs for steel; subsidies, tax breaks, and regulatory relief for logging, mining, coal, and natural gas. Even Bush's tax policy shows the same old-economy preference. His dividend tax cut was supported by mainstream, blue-chip companies, which stood to gain, but opposed by high-tech executives, whose company stocks seldom pay dividends.

You really must read the whole thing but the bottom line is that Bush, by not funding education, hampering science, and favoring old extraction industries is killing our chances to have the Next Great Innovation. I'm not sure what it will be (my money's on biotech or blogging) but it will make somebody rich. That somebody won't be the US if this keeps up. Bush policy helps the economy of the Red States, economies based on extraction resources and keeping wages low. But this is a sucker's game because we will run out of resources and there is always somebody willing to work for cheaper in the world. You can't get ahead by propping up old, weak industries. America needs to get ahead by being creative, by innovating, by being smarter than the other guys. Republicans are not helping:

Of all the irresponsible aspects of the 2005 budget bill that the Republican-led Congress just passed, nothing could be more irresponsible than the fact that funding for the National Science Foundation was cut by nearly 2 percent, or $105 million.

Think about this. We are facing a mounting crisis in science and engineering education. The generation of scientists, engineers and mathematicians who were spurred to get advanced degrees by the 1957 Soviet launch of Sputnik and the challenge by President John Kennedy to put a man on the moon is slowly retiring.

But because of the steady erosion of science, math and engineering education in U.S. high schools, our cold war generation of American scientists is not being fully replenished. We traditionally filled the gap with Indian, Chinese and other immigrant brainpower. But post-9/11, many of these foreign engineers are not coming here anymore, and, because the world is now flat and wired, many others can stay home and innovate without having to emigrate.

That's Friedman. Foreign policy is part of this. Everything is part of this. The EU is bigger than we are economically. They are not perfect, but if we leave innovation behind and go with the Wal-Mart economy they are going to eat our lunch.

It's not really about tax and spend anymore. It's what kind of economy do you want? $6.50 an hour or $65,000 a year. Bush policies make the first, not the second.