Markets Vote 'No' on Bush

By Dan Froomkin
Special to washingtonpost.com
Tuesday, January 22, 2008; 1:00 PM

When it comes to his ability to forestall a recession, President Bush appears to be getting a vote of no confidence from the world and domestic financial markets.

You can follow all the latest here, on washingtonpost.com. After massive world-wide sell-offs yesterday -- and despite an emergency interest-rate cut by the Federal Reserve -- the Dow Jones industrial average dropped more than 450 points in its opening minutes, before starting to recover.

The markets could bounce back today or in the coming weeks, of course, but the pressure is now on the president and it's not at all clear how he'll stand up to it.

Bush will speak about the economy this afternoon, when he holds a photo op with congressional leaders. White House Press Secretary Dana Perino said this morning that Bush hasn't ruled out an even larger stimulus package than the one he proposed on Friday.

As Peter Baker and Neil Irwin wrote in Saturday's Washington Post, Bush on Friday called for "a $145 billion stimulus package centered on tax breaks for consumers and businesses to rejuvenate the lagging U.S. economy, a move that drew unusual bipartisan praise on Capitol Hill but did not boost confidence on Wall Street."

Sheryl Gay Stolberg wrote in the New York Times that "Bush laid out his ideas for an economic rescue package only in broad strokes, saying the plan must be 'built on broad-based tax relief' and 'big enough to make a difference in an economy as large and dynamic as ours.' He did not use the word recession, but acknowledged that 'there is a risk of a downturn.'"

The unusual bipartisan comity over the idea of a stimulus package was due not only to a shared sense of urgency, but also to Bush's agreement not to link it to his longtime quest to make his tax cuts permanent.

Yet Sarah Lueck and Greg Hitt write in today's Wall Street Journal (subscription required) that a final agreement is more than a month away, at best: "Several big differences remain between Democrats and Republicans, including who should receive tax rebates, and how much cash should be devoted to additional spending items favored by Democrats. . . .

"A sticking point is who would receive rebates. Republicans prefer to limit them to people who pay income taxes. Democrats insist others with lower incomes should be eligible, and that especially people who pay payroll taxes to Social Security and Medicare should be included."

Lueck and Hitt write: "Lawmakers had hoped to emerge from the meeting with a framework for a deal that could move through Congress by mid-February. Now, however, aides said the chance of a detailed breakthrough today is slim, and the timetable for passing a measure has slipped by at least a couple of weeks."

'Feel Good Economics'?

If Republicans and Democrats agree, then it must be right -- right?

Not necessarily. Bruce Bartlett, a Treasury Department official from Bush's father's administration, writes in a Wall Street Journal op-ed: "[T]here is virtually no empirical evidence that tax rebates are an effective response to economic slowdowns. The increased personal saving doesn't help the economy because the federal budget deficit, which can be thought of as negative saving, offsets all of it in the aggregate. The main benefit of a tax rebate would seem to be political -- giving politicians a way of appearing to be doing something about the nation's economic problems that is superficially plausible.

"A new rebate probably won't do much harm. But anyone who thinks it will prevent a recession -- if one is actually in the pipeline, which is not at all certain -- is dreaming. . . . It should be called 'feel good economics' because its only real effect is to make politicians feel good about themselves and buy re-election with the public purse."

The Bush Economic Legacy: Massive Deficits

Why such lack of faith in Bush's ability to manage the economy? Maybe because of his track record so far in managing the budget.

Brian Faler and Rich Miller write for Bloomberg: "President George W. Bush is poised to leave the federal government in worse financial shape than he found it, making it harder for whoever succeeds him to deliver on the promises of this year's election campaign.

"Bush may end his eight years in office with a larger-than- forecast budget deficit approaching 2004's record $413 billion, as an increasingly likely recession slashes tax receipts and raises spending. He'll also leave behind a host of thorny, longer-term problems -- from the expiration of his big tax cuts in 2010 to spiraling spending on senior citizens -- that will dog his successor's budgets for years. . . .

"The situation is, in some respects, the mirror image of 2001. Bush, 61, was the first president since John F. Kennedy to take office with a budget surplus, to the tune of $236 billion, giving him considerable latitude in formulating policy.. . . .

"'History will treat him very harshly,'' says Robert Reischauer, former director of the nonpartisan Congressional Budget Office and now president of the Urban Institute, a Washington-based research group.

"Bush 'came in with an unprecedented opportunity to address the long-run challenges faced by this nation and completely blew it, in part because of events and in part because of policy,'' Reischauer says."

Stan Collender writes in his opinion column in Roll Call that "the lasting Bush budget legacy, which is decidedly negative, was determined long ago and nothing that happens in the remaining 11 months of his presidency will change that. . . .

"Regardless of the reasons you think it happened, when the Bush administration officially began in January 2001, the federal budget was in surplus. In fact, this was the first time since 1927-1930 that there were four consecutive annual surpluses and it was a reason for celebration and wonder by policymakers.

"Bill Clinton as he left office and Bush as he was taking the oath both said the federal debt would be all but eliminated by around the end of this decade. The Federal Reserve wondered out loud about how it was going to control monetary policy if there were no more Treasury bills, notes, and bonds for it to buy and sell. And academics were discussing whether it was better for the economy to use the surplus to pay down the federal debt or cut taxes.

"All that changed almost as soon as the Bush administration began and the budget surplus that had been projected to grow quickly changed to a deficit. The red ink we were told would quickly turn back into a surplus instead grew into several consecutive nominal all-time-high deficits."

Collender also notes: "The Bush legacy also includes one of the most effective efforts to limit the debate and, therefore, minimize the issue, in the history of federal budgeting."

Earmarks Watch

Robert Pear writes in the New York Times: "President Bush is unlikely to defy Congress on spending billions of dollars earmarked for pet projects, but he will probably insist that lawmakers provide more justification for such earmarks in the future, administration officials said Monday.

"Fiscal conservatives in Congress and budget watchdogs have been urging Mr. Bush to issue an executive order instructing agencies to disregard the many earmarks listed just in committee reports, not in the text of legislation. . . .

"Lawmakers, including the House Republican whip, Roy Blunt of Missouri, have cautioned the White House that a furor over earmarks could upend Mr. Bush's hopes for cooperation with Congress on other issues, including efforts to revive the economy."

White House (Missing) E-mail Watch

Elizabeth Williamson and Dan Eggen write in The Washington Post : "For years, the Bush administration has relied on an inadequate archiving system for storing the millions of e-mails sent through White House servers, despite court orders and statutes requiring the preservation of such records, according to documents and technical experts.

"President Bush's White House early on scrapped a custom archiving system that the Clinton administration had adopted under a federal court order. From 2001 to 2003, the Bush White House also recorded over computer backup tapes that provided a last line of defense for preserving e-mails, even though a similar practice landed the Clinton administration in legal trouble.

"As a result, several years' worth of electronic communication may have been lost, potentially including e-mails documenting administration actions in the run-up to the Iraq war."

What possible reason was there to abandon an archiving system that worked? Who knows? The official White House line, despite the evidence to the contrary, is: What missing e-mails?

Pete Yost writes for the Associated Press: "Apparent gaps in White House e-mail archives coincide with dates in late 2003 and early 2004 when the administration was struggling to deal with the CIA leak investigation and the possibility of a congressional probe into Iraq intelligence failures."

Citizens for Responsibility and Ethics in Washington, one of the two groups suing the White House over the e-mail issue, is out with an analysis of national news on the dates for which there are missing e-mails.

Editorial Watch

The Cleveland Plain Dealer writes that "the possibility that there's a black hole that swallowed millions of emails in the heart of the Bush administration's historical tenure is troubling. The fact that this gap hasn't induced the Bush administration to move quickly to close all its potential archival loopholes - and figure out what is missing and what could be backed up from existing servers and backup tapes - is astounding.

"The realization, from a White House official's court filing this week, that instead of seeking to fix the problem, the White House is trying to duck responsibility and escape court or public oversight is simply outrageous. . . .

"It merits immediate action from the courts and Congress to compel this administration to comply with the law and to correct the problem."

The Roanoke Times writes: "Laws requiring preservation of White House communication are designed to ensure a more complete and accurate retelling of history.

"That appears to be exactly what the Bush White House has been striving mightily to prevent.

"These e-mails may never be able to be recovered. But Congress should conduct a full investigation to ensure that future administrations realize the law cannot be ignored without consequence."

U.S. Attorney Watch

Manu Raju writes in The Hill: "The federal investigation into the firing of nine U.S. attorneys could jolt the political landscape ahead of the November elections, according to several people close to the inquiry.

"Washington's attention has been diverted from the scandal since the August resignation of Alberto Gonzales as attorney general."

But Raju describes "a sprawling inquiry launched by the Justice Department's Office of Inspector General (OIG) and the Office of Professional Responsibility (OPR).

"Investigators from these offices have been questioning whether senior officials lied to Congress, violated the criminal provisions in the Hatch Act, tampered with witnesses preparing to testify to Congress, obstructed justice, took improper political considerations into account during the hiring and firing of U.S. attorneys and created widespread problems in the department's Civil Rights Division, according to several people familiar with the investigation."

Bush's Dwindling Foreign Policy

Paul Richter writes in the Los Angeles Times: "The Bush administration is beginning its last year in office by quietly scaling back its foreign policy ambitions as it struggles with new obstacles and rapidly dwindling influence.

"Only a few months ago, senior officials predicted that before their exit, they could deliver the Middle East peace deal that had eluded so many predecessors. But this month, as President Bush toured Israel and the West Bank, officials made it clear that the deal he's now talking about is not a long-awaited final agreement, but a preliminary pact to set the terms for talks.

"In addition, the administration's efforts to get North Korea and Iran to end their nuclear programs have suffered deflating setbacks in recent weeks. And although the administration's greatest foreign policy undertaking, Iraq, has seen encouraging security improvements, the goal of Iraqi political reconciliation remains distant.

"The upshot is that the Bush administration is going to be spending the next year managing crises and tidying up messes until the next president takes over, rather than reaching legacy milestones, as officials recently had hoped.

What's the White House spin? Michael Abramowitz writes in The Washington Post: "With one year left in the White House, Bush is trying to turn the normal plight of a lame-duck president to his advantage in an effort to salvage his foreign-policy legacy -- not only seeking an Israeli-Palestinian peace deal but also attempting to stabilize Iraq, isolate Iran and curb North Korea's nuclear ambitions.

"'All of these leaders know this president, they understand that he does have a year left in office, and I think they see that as an opportunity for all of them to deal with someone they know,' said Edward W. Gillespie, the White House counselor, who accompanied Bush on his recent eight-day swing through the Middle East.

"But as that trip underscored, Bush's power to sway world events during his final months in the White House is dwindling, along with his political influence at home."

Peter Baker writes in The Washington Post about the trick Bush used to try to get attention during his recent trip: "With television's heavy hitters having abandoned the White House to suffer the wilds of New Hampshire and South Carolina, the Bush team figured the best way to get attention for his trip in the midst of the primaries was to dole out 'exclusive' interviews.

"The strategy met with only modest success at best. Bush managed to get on some shows that otherwise might have ignored much of his trip, but it was hard to compete with the aftermath of comeback victories by John McCain and Hillary Rodham Clinton in New Hampshire, no matter how many funny robes the president put on. . . .

"Administration strategists are resigned to the reality that, until the nomination battles are resolved in the coming weeks, the White House will not be the center of the universe. They hope that once the party nominees are made clear, there will be a window through spring to reassert themselves and get some things done with Congress before the political conventions at the end of summer."

Janine Zacharia writes for Bloomberg: "The Saudi monarchy once depended on the U.S. to protect its reign and its oil from foes like Saddam Hussein. These days, President George W. Bush needs the world's biggest exporter of crude more than it needs him.

"With oil at about $90 a barrel, the U.S. economy at risk of sliding into recession and American banks trying to raise cash to ride out the subprime-mortgage crisis, Bush has become a supplicant for Saudi financial help."

Andrew Grice writes in the Independent that British Prime Minister "Gordon Brown is preparing the world for 'life after Bush' by seeking an outline agreement this year on major reforms to international bodies and eventual moves to dismantle nuclear weapons. . . .

"In a speech on foreign policy in Delhi, he said: 'I do not envisage a new world founded on the narrow and conventional idea of isolated states pursuing their own selfish interests. Instead I see a world that harnesses for the common good the growing interdependence of nations, cultures and peoples that makes a truly global society."

Surge Watch

Andrew J. Bacevich writes in a Washington Post opinion piece: "As the fifth anniversary of Operation Iraqi Freedom nears, the fabulists are again trying to weave their own version of the war. The latest myth is that the 'surge' is working. . . .

"Yet what exactly has the surge wrought? In substantive terms, the answer is: not much. . . .

"In only one respect has the surge achieved undeniable success: It has ensured that U.S. troops won't be coming home anytime soon. This was one of the main points of the exercise in the first place. As [American Enterprise Institute] military analyst Thomas Donnelly has acknowledged with admirable candor, 'part of the purpose of the surge was to redefine the Washington narrative,' thereby deflecting calls for a complete withdrawal of U.S. combat forces. Hawks who had pooh-poohed the risks of invasion now portrayed the risks of withdrawal as too awful to contemplate. But a prerequisite to perpetuating the war -- and leaving it to the next president -- was to get Iraq off the front pages and out of the nightly news. At least in this context, the surge qualifies as a masterstroke."

Use of Force

In his Boston Globe opinion column, H.D.S. Greenway looks back on Bush's trip to the Middle East and concludes: "The biggest lesson that Bush [should] have learned from Israel's example is that overdependence on brute force to solve complicated problems does not always provide a solution, and usually makes things worse as Lebanon and the occupied territories have so amply demonstrated."

The Bush Tragedy

Newsweek publishes an extensive excerpt from Jacob Weisberg's new book, "The Bush Tragedy."

Weisberg sees three distinct acts: "Act One of the Bush Tragedy is the son's struggle to be like his dad until the age of forty. Act Two is his growing success over the next fifteen years as he learned to be different. The botched search for a doctrine to clarify world affairs and the president's progressive descent into messianism constitute the conclusive third act."

He also identifies six Bush Doctrines: Bush Doctrine 1.0 was Unipolar Realism (3/7/99--9/10/01); Bush Doctrine 2.0 was With Us or Against Us (9/11/01--5/31/02); Bush Doctrine 3.0 was Preemption (6/1/02--11/5/03); Bush Doctrine 4.0 was Democracy in the Middle East (11/6/03--1/19/05); Bush Doctrine 5.0 was Freedom Everywhere (1/20/05-- 11/7/06); and Bush Doctrine 6.0, 11/8/06 to date, is the "absence of any functioning doctrine at all."

Weisberg sees Bush's close-mindedness as a key element of his presidency: "At a temperamental level, the president has almost no ability to accept blame or learn from mistakes. Disagreement, whether from critics or allies, sounds like his mother's nagging and his father's disappointment. Thus criticism has the opposite of its intended effect on him. Disapproval hardens Bush's conviction that he must be right and reinforces his refusal to surrender. Believing he earned his position in life through willpower, he feels he shouldn't have to ask anyone for permission. This obstinacy has been evident in his personnel practices as well as policy choices. The more the media demanded Bush yield up a head--CIA Director George Tenet, Rumsfeld, Karl Rove, Attorney General Alberto Gonzales--the longer that person was likely to be staying around."

Similarly: "The collapse of his preemption justification for the war (terrorism + WMD = intolerable threat) sent Bush not into any reexamination of his decision, but toward grander and grander justification."

The Anthrax Attacks

Weisberg also elevates the anthrax attacks that took place shortly after Sept. 11 from a footnote to a key factor in Bush's decision to go to war in Iraq: "The anthrax attacks in New York and Washington created a sense of vulnerability that was in many respects greater than the mass murder at the World Trade Center and Pentagon," he writes. "Inside the administration, the October bioterror attacks had a larger impact than is generally appreciated--one in many ways bigger than 9/11. Without the anthrax attacks, Bush probably would not have invaded Iraq."

Vice President Cheney and his chief of staff, I. Lewis "Scooter" Libby, were particularly alarmed -- and alarmist -- about the possibility of a biological attack.

"Then on October 4 the worst fears inside the White House were realized. Bush choked up as he thanked government workers in a morning speech at the State Department. [Then-spokesman] Ari Fleischer reports that he had 'never before and never since seen the president look as tired and as troubled as he did that morning.' When they returned to the White House, Bush called Fleischer into his office and explained the reason: he had just learned that a Florida man had been stricken with anthrax. Bush feared it was the dreaded second wave.

"Another anthrax letter, never recovered (or at least never disclosed), was apparently sent to the White House. On October 22, anthrax was found on an automated slitter used to open letters at a Secret Service facility in an undisclosed location some miles away. This meant the White House was a target of biological terrorism. 'I think the seminal event of the Bush administration was the anthrax attacks,' someone close to the president told me. 'It was the thing that changed everything. It was the hard stare into the abyss.'"

Weisberg writes that "Cheney and Libby believed that Iraq's potential to produce a smallpox weapon necessitated universal vaccination of the general population, something that hadn't happened in the United States since 1972."

Despite the fact that normal reactions to smallpox vaccination include grotesque scabs, lesions, and pustules -- and abnormal reactions include blackened limbs, uncontrolled swelling, sores that cover the body from head to toe, and death -- Cheney apparently came very close to persuading Bush to go ahead.

Concludes Weisberg: "Those who believe the vice president operates in bad faith--that he concocted evidence of Iraqi WMD to justify a war--should consider his stance on universal smallpox vaccination. By most estimates, even a safe vaccine would have killed a few hundred Americans and made thousands seriously ill. Cheney's readiness to sacrifice hundreds of civilian lives may make him sound like Dr. Strangelove. But if the idea was mad, it was sincerely mad, testifying to how seriously he took the possibility that Saddam had biological weapons and might use them, or give them to terrorists to use, against the United States."

Of course, sincere madness and intentional deception aren't mutually exclusive. The former can quite easily lead to the latter.

Bush and the GOP

Also in Newsweek, Evan Thomas writes that Bush has ended a long GOP ascendancy by squandering the nation's trust.

"His presidency has been, in essence, faith-based--not just faith in God, but faith in Bush. After 9/11, he asked the nation to invest in his narrative of good versus evil. He seemed to be saying, 'I'm taking care of this, you have to trust me.' Critics and naysayers were scorned as ditherers or cowards. Bush wanted to appear resolute, but at times he just seemed bullheaded and oblivious. . . .

"What can the Republicans do to salvage their party fortunes and show they have learned from Bush's experience? It is too late to reinvent the party's core beliefs. But the GOP candidates can embark on a more humble mission: to show, in effect, some humility. By examining Bush's hubris, his almost willful disregard for annoying counterarguments, the Republican candidates can demonstrate a greater level of critical open-mindedness and self-awareness--they can show that they are not deluded by wishful thinking and Manichaean narratives. Come to think of it, that's not a bad standard for the candidates of either party. The test of a successful presidency, history shows, is the ability to project visionary self-confidence without, at the same time, brushing aside stubborn truths."

Impeachment (Non) Watch

The Associated Press reports from Washington State: "A state Senate resolution calling for the impeachment of President Bush and Vice President Cheney was approved by a committee Monday, taking the measure one step further than it went last year."

Bush, the Movie

Michael Fleming writes for Variety: "Oliver Stone has set his sights on his next directing project, 'Bush,' a film focusing on the life and presidency of George W. Bush, and attached Josh Brolin to play the title role. . . .

"If financing materializes quickly enough, the film could start production by April and could be in theaters for the election or the inauguration."

Stone tells Fleming: "I want a fair, true portrait of the man. How did Bush go from an alcoholic bum to the most powerful figure in the world? It's like Frank Capra territory on one hand, but I'll also cover the demons in his private life, his bouts with his dad and his conversion to Christianity, which explains a lot of where he is coming from. It includes his belief that God personally chose him to be president of the United States, and his coming into his own with the stunning, preemptive attack on Iraq. It will contain surprises for Bush supporters and his detractors.'"

As for casting Brolin, Stone says: "Josh is actually better looking than Bush but has the same drive and charisma that Americans identify with Bush, who has some of that old-time movie-star swagger."

Xan Brooks blogs for the Guardian that the Brolin selection "will doubtless please the White House no end. Brolin is Bush as he would like to be seen - a hardboiled Texas cowboy as opposed to the pampered scion of an east coast, Ivy League aristocracy.

"Surely there are better candidates currently doing the rounds. Timothy Bottoms has already played the president on TV and has the right thin-lipped, peevish quality that makes him more physically suited to the task (as a bonus, his name has a nice Midsummer Night's ring to it). In addition to being fine actors, Anthony LaPaglia or Chris Cooper are likewise safe bets in the look-alike stakes. Oliver Stone tends not to make comedies, which will disappoint those who long for the sight of Will Ferrell pouring over a copy of My Pet Goat as the news of 9/11 comes seeping in."

Late Night Humor

Jay Leno, via U.S. News: "In Saudi Arabia last week, President Bush was criticized for doing a little ceremonial dance with a sword given to him by the Saudi prince. A lot of people thought the President was pandering to the Saudis. To be fair, I don't think the President was pandering. See, I think President Bush is truly fascinated by bright, shiny objects."

Cartoon Watch

Tom Toles on Bush's big idea; Walt Handelsman on Bush's growth package; Dwane Powell on Bush prostrate before the Saudis; and an Ann Telnaes animation on Dick Cheney as Tom Cruise.

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