JONATHAN CHAIT AUGUST 5, 2011
Yesterday, David Frum posed a question to conservatives:
My conservative friends argue that the policies of Barack Obama are responsible for the horrifying length and depth of the economic crisis.
Question: Which policies?
Obama’s only tax increases – those contained in the Affordable Care Act – do not go into effect until 2014. Personal income tax rates and corporate tax rates are no higher today than they have been for the past decade. The payroll tax has actually been cut by 2 points. Total federal tax collections have dropped by 4 points of GDP since 2007, from 18+% to 14+%, the lowest rate since the Truman administration. ...
We have not seen a major surge in federal regulation, at least by the usual rough metrics: the page count of the Federal Register has risen by less than 5% since George W. Bush’s last year in office. Trade remains as free as it was a decade ago.
While the Affordable Care Act itself will eventually have major economic consequences, most of its provisions remain only impending.
Energy prices have surged, but that’s hardly a response to administration policies.
And here we have Washington Post conservative blogger Jennifer Rubin offering a perfect sample of the thinking he describes. In short, yes, her theory is that the future expiration of the Bush tax cuts and the not-yet-implemented Affordable Care Act have caused a worldwide economic crisis:
Obama’s entirely false assessment of the economy had real policy implications. Recall that Treasury Secretary Tim Geithner a year ago told us that the economy could “withstand” tax hikes. And so he doggedly urged tax increases, rather than cuts. And as we saw in Obama’s Rose Garden speech this week, his anemic program of items like an infrastructure bank and patent reform shows no sign that he connects his uber-regulatory schemes, Obamcare and the threat of ever-higher taxes to the faltering economy.
Rubin is arguing that Obama's overly rosy view had "consequences," as reflected in Geithner's declaration that the economy could withstand tax hikes. He was arguing that the economy could withstand tax hikes on income over $250,000, but the administration gave in on that demand and extended all those tax cuts. So that's her key causal factor -- the administration arguing for a tax increase that it did not actually implement.