Coyote Blog

It is good that everyone has made clear to me that Obama represents change because otherwise, I would have thought that the current stimulus bill was politics as usual, only on steroids.  The other day I hypothesized that panic-stricken statements of disasters from both the outgoing Bush administrations and the new Obama administration, generally crafted to help push "emergency" legislation, are having a substantial negative effect on the economy.  It turns out, this is not a new accusation.  From Newsweek, 1991:

Be afraid, be very afraid. That has been the message of President George W. Bush and his economic team ever since December, when they realized that for the first time in 112 years they couldn't use the normal argument of new presidents to push their program. Invoking "the will of the people" wasn't going to cut it this time.

So they did something risky and unusual--they poor-mouthed the economy to build support for their tax cut (which, as currently designed, would have almost zero impact on the economy this year) and to sprinkle a little blame for any recession on Bill Clinton. Even if Bush turns out to be right in his predictions of gloom, that doesn't mean he was right to make them. Not "prudent," as his father might say. Not helpful.

Yes, the power of any president over the economy is often exaggerated. This latest slowdown began last fall and was probably inevitable. The tech-stock bubble inflated and burst without much influence from Washington. But if the origins of economic trouble cannot be blamed on a president, the way it spreads psychologically is very much within his job description, if for no other reason than that the American people believe it to be. Consumer confidence is central to any soft landing (or, in the case of real recession, any recovery), and that confidence can be bolstered or eroded by the man in the White House.

Update: the Washington Times article I quoted in a previous post points me to another such statement from the NY Times in 1991:

Normally, presidents are cheerleaders for the nation's economy....

Now comes George W. Bush, who is presenting what an analysis in The Financial Times last week called ''the novel spectacle'' of a president ''urging citizens to ignore good economic news and focus on the bad.''

All week, the president talked about the economy ''sputtering,'' and he wrapped up the week on Saturday by beginning his weekly radio address to the nation this way: ''Good morning. For several months, economic indicators have pointed toward a slowdown, and now many Americans are starting to feel its impact. The stock market is causing worries, high energy prices are straining family budgets and some workers and small-business people have been directly affected by layoffs and slowing retail sales.''