The Economic Voodoo Doll
And The “Bush Economy” Is Getting Stuck
April 9, 2001
“The practice of Voodoo is…basically a form of spiritualism in which gods are invoked to take possession of the priests, protect the worshippers, and perform feats of divination and magic.”
As Shakespeare so aptly observed, “"What's in a name? That which we call a rose by any other word would smell as sweet." And so it goes with the English language (or Liberal jargon). Call it Voodoo, propaganda or just simple disinformation, it’s all the same and the Liberals are high priests of the art.
Not a day passes without the “talking heads” and “experts” in the media (all usually of the Liberal persuasion) sticking pins in their Voodoo dolls and calling them the “Bush Economy”. Even amorphous Democrats, ranging from nondescript CongressPeople to Party “operatives”, are gleefully practicing the ancient art of sticking the poison pin in the doll and casting the spell of recession on the “Bush Economy”.
The practice of Voodoo must have some legitimacy because it seems to be effective. Take a broadcast booth and place a Republican on the right, a Democrat on the left and a “talking head” in the middle and what do you get? In the news du jour the apparent result is a Democrat spewing misinformation about the economy, a Republican fixated on his “talking points” and a news anchorperson sticking pins in the Republican while hoping that the Democratic Voodoo entrances the viewer.
The sad aspect is that Democratic pins are impaling the Republicans and they just don’t “get it”. The typical broadcast begins as a “discussion” about the Bush tax cut proposals. Immediately, the Democratic guest frames the debate as, “We really can’t cut taxes by that much because the expected surplus might not materialize as a result of the Bush Economy.”
One might expect the Republican (who has hopefully learned something about debating) to rebut with a clear statement that the present economy had started its crash long before the election. Illogically, however, the Republican robotoid sticks to the “talking points” and advocates the tax plan. This implicitly places responsibility for the economic decline on Bush’s shoulders and forever identifies it as the “Bush Economy”.
Have only the Democrats read the Goebbels’ handbook? Don’t the Republicans know that first impressions are lasting? The (non)secret to Democratic success is the realization that a big lie told often enough becomes fact.
The greatest shortcoming of Republican public relations failure is their inability to frame an issue. It is crucial for Republicans to re-ignite the concept that facts talk and bullshit walks. Unfortunately, but understandably, the electorate is little different than students in a classroom. For the most part, what the teacher says, the students believe.
In a naïve attempt at reality, a look at the facts might help to remove some of the pins from the “Bush Economy” Voodoo doll.
First among truths is the fact that the U.S. economy has a response rate more comparable to a supertanker than to a speedboat. Because of its enormous size, any action has a delayed response (lag time) before its consequences are manifested in the data. In simple comparison, move the direction of a supertanker’s rudder and go take a nap before the ship actually starts to change course.
Two critical economic components had their course drastically altered during the Clinton administration with their consequences coming into full bloom during the beginning of the Bush presidency. The first of these is Federal Reserve policy.
When Clinton took the oath of office in November of 1992 the Fed Funds rate was 3%. By May of 1999 it was up to 4.75%. In June of 1999 this key interest rate was increased to 5%. With a vengeance, the Federal Reserve, during the Clinton administration, continued this intentional path to slow the economy with a boost to 5.25% in August of 1999, then to 5.50% in November of 1999, up again to 5.75% in February of 2000, relentlessly increased to 6.00% in March of 2000 and the coup de grace in May of 2000 to 6.50%.
All of these interest rate increases, which slowed and helped to kill economic growth, occurred during the Clinton administration. All of the interest rate decreases, which promote economic expansion and will lead to recovery, have occurred since the election of George W. Bush.
Never once has anybody heard that Clinton cared a wit about the long-term health of the U.S. economy. During the Clinton years, the economy was allowed to expand at unsustainable rates. Thus, instead of encouraging the Federal Reserve to intervene sooner (like 1995) with very moderate increases (taking their foot off of the gas), Clinton allowed the economy to speed out of control until the Federal Reserve slammed on the brakes.
The second of the economic components that destabilized under then-President Clinton is energy prices. On March 10 of 1999 a barrel of crude oil cost $10.90. Exactly one year later, on March 10 of 2000, the same barrel of crude had increased to $33.92.
This occurred during a Clinton administration that, irresponsibly, had no serious regard for a national energy policy (all talk). One of George W. Bush top priorities is a national energy policy (immediate action).
The consequences of runaway energy prices during the Clinton presidency are easy to demonstrate.
The United States consumes about 20 million barrels of crude oil each day. Take the difference between $10 and $30 and multiply it by 20 million and then again by 365 days per year.
To the oil price increase, add the natural gas price inflation. The U.S. consumes about 22.7 trillion cubic feet of natural gas per year. Conservatively calculate an increase in natural gas prices from about $2.25/mcf (thousand cubic feet) in 1999 to at least $4.50/mcf in 2000. Again, take the difference and multiply the amount by the consumption.
Take the aggregate sum of oil and natural gas price increases and add the increased price of electricity, propane and coal. By the most conservative estimates, the total gift of energy price increases during the Clinton years approaches 3% of GDP (Gross Domestic Product).
If GDP had wild hopes of 4.5% growth during 2001, the energy increases of the Clinton years reduced that amount to an anemic 1.5% growth factor. Is it any surprise that Wall Street had a rude awakening?
On March 10, 2000 the NASDAQ rose to a record 5048.62. By the end of the Clinton administration, the NASDAQ had settled to 2470.52 on December 29, 2000. By any calculation, Clinton’s going away present to Wall Street and the investing public was an almost 50% decline in the NASDAQ.
The Dow Jones Industrial Average was loving life when it topped at 11,722.98 on January 14, 2000. By December 29, 2000 the same average had closed at 10, 786.85. Again, the Clinton administration gifted the public with an 8% loss and the beginnings of a Bear market.
From the facts, it sadly appears that the illusion exited with the former President. It’s the equivalent of living an uncontrolled negative lifestyle for eight years and then blaming the ninth year for the illness.
But, this economy has created opportunity for the Democratic Voodoo priests. If they stick the economic doll with enough poison pins, people might actually start seeing Bush’s face on a Clinton doll.
It is the responsibility of Republican Party leadership to frame the issue of a bumpy economy accurately. The facts speak eloquently for themselves. If the Democrats actually do pin the blame for this economy on George W. Bush, the Republicans deserve to be stuck with the blame for the “Bush Economy” instead of taking credit for the “Bush Recovery” from the “Clinton Recession”.
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