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Monday, November 24, 2008

The Bob Riley Economy Goes in the Tank

Remember the 2002 Alabama gubernatorial election, when Republican challenger Bob Riley repeatedly knocked Democratic incumbent Don Siegelman on the issue of job losses?

Siegelman, like all governors around the country, was having to deal with an economic downturn brought on by the burst dot-com bubble. And that shined light on one truth of modern politics: There is not much governors can do to prevent job losses when the nation's economy takes a downswing. In other words, governors get too much credit when economic times are good and too much blame when times turn sour.

But Riley didn't want to let the truth get in the way of a good campaign issue. So he attacked Siegelman and wound up "winning" an election that was decided when votes mysteriously disappeared in the middle of the night in Baldwin County.

Not long after Riley took office, the national economy turned around, and Riley was able to crow about creating jobs far better than his predecessor had.

Well, it seems Riley isn't crowing so much these days. A report came out over the weekend that layoffs and plant closings are mounting in every corner of Alabama. With a month left in the year, state officials have been notified of almost 11,000 jobs lost during 2008.

All of this was predictable when George W. Bush became president in January 2001 and took the usual conservative approach of cutting taxes for the wealthiest Americans. The move prompted a "mini boom" in the economy, causing the modest job growth of which Riley was so proud.

But as more of the nation's wealth wound up in the hands of too few people, the economy began to bog down. The middle class, which drives demand, became strapped, saw its purchasing power diminished, and tightened its purse strings out of necessity. This contributed greatly to the economic malaise we now are experiencing.

This isn't anything new, but the American public keeps falling for the same conservative trick. And the results never change.

Several times in the late 1800s, conservative administrations pushed for supply-side tax cuts on the wealthy. The nation experienced the usual result: a "mini boom" followed by recession or depression.

It happened again in the 1920s with the conservative administration of Calvin Coolidge, who was Ronald Reagan's hero. With the help of a Republican Congress, Coolidge started an economic train wreck that led to the Great Depression.

The supply-side tax cuts of Reagan and George H.W. Bush led to a deep recession in the late 1980s and early 1990s, one that only a Democrat, Bill Clinton, could solve.

Now, some 15 years later, another Democrat, Barack Obama, is being asked to clean up after another supply-side mess.

Will we ever learn? Anyone who truly wants to understand this cycle should read Kevin Phillips' masterpiece, The Politics of Rich and Poor. I would argue that it's the most important public-affairs book of the past 50 years.

Reading Phillips, unfortunately, takes a little effort. And too many Americans are not willing to make that effort.

It's easier, I guess, to take your economic cues from the likes of Bob Riley.

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