Will George W. Bush become a surprise Obama asset?

By Nicholas Wapshott
June 21, 2012

Whatever happened to George W. Bush? While 88-year-old George H.W. Bush still goes skydiving and chats about Justin Bieber with his granddaughter Jemma, the faux Texan who brought us two wars, waterboarding, an economic meltdown and record public borrowing is strangely missing. Just as well, you might think. What could he possibly say?

But George W. is a key witness in the trial of Barack Obama. Under attack from Mitt Romney for presiding over a stagnant economy, Obama blames his plight on the gaping hole in the country’s finances left by his predecessor. “Huge reckless bets were made with other people’s money,” Obama told an audience in Cleveland, this month. “And too many, from Wall Street to Washington, simply looked the other way.” Then, “in the fall of 2008 it all came tumbling down with a financial crisis that plunged the world into the worst economic crisis since the Great Depression.”

Obama has made light of his sour inheritance, joking: “Some have said I blame too many problems on my predecessor, but let’s not forget that’s a practice that was initiated by George W. Bush.” But in invoking the ghost of George W. he is deadly serious. To be left nursing the worst economy since Herbert Hoover is no laughing matter. The figures for the Bush years suggest Obama has a lot to complain about. Whether you judge it by stock market prices, or the number of Americans in poverty, or median household income, or growth in public debt, or GDP growth, or job growth, or number of Americans without health insurance, Bush passed on to Obama an economy heading South.

Americans seem to understand this. Bush, not Obama, is mostly blamed for the wretched state of the economy, according to a recent Gallup poll. Even Republicans are split, holding Bush and Obama equally responsible. This perhaps surprising evidence of fair play among voters goes a long way to explain why Obama continues to pound away at the narrative that he inherited a wrecked economy and deserves more time to fix it.

So what does W. think about the economy he left behind? In April, he spoke at Southern Methodist University in Dallas about the “decision that contradicted a principle I told the American people I stood on, which is that markets are the best way to allocate goods, resources, and services. That decision was to use taxpayers’ money to bail out Wall Street in order to make sure that we didn’t have an economic disaster.” The remark echoed what he wrote in his 2010 memoir Decision Points, that he believed the intervention “helped spare the American people from an economic disaster of historic proportions … the Second Great Depression that Ben Bernanke warned about did not happen.”

In a candid admission, he told his Dallas audience: “I can’t prove that we were going to have an economic disaster. I can just tell you we didn’t have one. I have thought often about this decision. I will just tell you this: had I had to make it again, I would make the same exact decision.” Tea Party supporters remember with horror Romney’s support for the Bush bailout. “We were on a precipice unlike anything we have known before in modern history with the potential of a complete collapse of our currency system and our financial system,” said Romney. “Had we not taken action, you could have seen a real devastation.”

Much to Romney’s relief, W. rarely steps away from his Texas fastness, and when he does, he keeps his utterances short. His endorsement of Romney was a mere five words – “I’m for Mitt Romney” – delivered just as the doors of an elevator abruptly closed upon his grinning visage. Bush has let it be known he will not be going on the stump for Romney, nor will you hear encomiums to the Bush years on Romney’s lips. Romney’s managers have decided that reminding the electorate of Bush’s existence is a sure vote loser.

Next month, however, the ghost of Bush will be spooking Romney once again. He has written an introduction to a collection of essays on promoting economic growth and has agreed to give at least one keynote interview. Over the course of the last year, the economic language here and in Europe has switched from a choice between a Keynesian stimulus and a Hayekian free-for-all to a similarly stark choice between growth and austerity.

Romney is, as ever, behind the curve and still trumpets cutting debt, reducing public-sector jobs, and imposing austerity, a prescription that in a number of European countries, including Britain, has delivered a double-dip recession. If next month George W. Bush champions growth over austerity, he will be handing Obama a nail-barbed bludgeon with which the president can chase Romney all the way to November.

Nicholas Wapshott is the author of Keynes Hayek: The Clash That Defined Modern Economics. Read extracts here.

PHOTO: Former President George W. Bush (R) and President Barack Obama look on before the unveiling of Bush’s official White House portrait in the East Room of the White House in Washington, May 31, 2012. REUTERS/Larry Downing

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