Veronique de Rugy:
I don’t quite agree with de Rugy here on the efficacy of the later Bush tax cuts, but I think she’s more or less on the money. The Keynesians have yet to explain why the biggest spending President in American history (so far) who ran up the biggest debts (until Obama) and slathered the nation with demand-side tax cuts failed to produce an unending economic boom.
We can’t pretend that Obamanomics started in 2009. A shadowy version was running as early as 2002. And the only complaints were that Bush wasn’t spending enough. So why did we see a lost decade of minimal wage growth? Why did we end the decade poorer than we started it?
Update: The Keynesians are countering that Bush spent during an expansion, not a recession. Several problems with this. First, we were in a recession when Bush started and were in a recession when he ended. Second, the point is that the Bush economy was largely an illusion; a similar Keynesian-fed Obama recovery will also be an illusion. And third, since when have the Keynesians ever called for spending cuts during a healthy economy? I mean, ever? Hell, they constantly talk about 1937, when FDR scaled back some spending, as an example of what we can never ever do?
Make up your minds, guys.