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Is it Bush's fault?

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Joe Stiglitz likes to toss blame around for the economic woes that plague our world—but I'm not sure the blame is always aimed in the right direction. In his book, Globalization and Its Discontents, he heaps curses on the IMF for its treatment of poor countries, but barely implicates his former employer, the World Bank.

In this mostly excellent article in Vanity Fair, he valiantly attempts to blame Bush for all of America's economic woes. It's difficult to argue with many of his points: Bush did take a budget surplus and turn it into a deficit, thanks only partly to the war in Iraq. He also adds that Bush doubled agricultural subsidies, which is misguided economic policy at its finest.

But I think he gives the Iraq war too much credit for causing the rising price of oil. And it's disingenuous to blame Bush for the housing boom (and bust), or the liquidity boom (and bust). He claims Bush's bad economic policies forced the Federal Reserve to cut interest rates, thereby fueling the consumer spending binge that's marked the last few years. Shouldn't Alan Greenspan, National Hero, get a little bit of the blame for that? Not to mention the investment banks that got so money-crazy they forgot to think about risk? Not to mention consumers themselves?

What do you think? Are we headed for the economic doldrums, as I argued last week on this blog? And who's to blame?

Last updated: Nov 8, 2007




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