Myths about economics

One of the biggest myths still making rounds on the internet -- and the halls of Congress -- is that the current economic situation we find ourselves in is the Bush administration's mad plunge into deregulation.

The latest major piece of deregulation was signed in 1999 by Clinton. Gramm-Leach-Bliley's lead sponsors were Republicans, but the 34 Democratic senators who voted for the bill surely weren't scheming to "let the market run wild." Ditto the 151 Democrats -- among them future Speaker Nancy Pelosi -- who voted for the measure in the House.

But of course Democrats have a convenient punching bag. Pelosi said the recession was caused by "The Bush Administration’s eight long years of failed deregulation policies..."

From Jeff Jacoby at the Boston Globe:

Now, this is not to say that Bush hasn't also been responsible for legislation having a decided impact on the country's regulatory climate. On July 31, 2002, declaring that free markets must not be "a financial free-for-all guided only by greed," he signed the Sarbanes-Oxley law, a sweeping overhaul of corporate fraud, securities, and accounting laws. Among its many tough provisions, the law created a new regulatory agency to oversee public accounting firms and auditors, and imposed an array of new requirements for financial reporting and corporate audits. Whatever else might be said about Sarbanes-Oxley, it was no invitation to an uninhibited capitalist bacchanal.


Like the alligators lurking in New York City sewers, Bush's massive regulatory rollback is mostly urban legend. Far from throwing out the rulebook, the administration has expanded it: Since Bush became president, the Federal Register -- the government's annual compendium of proposed and finalized regulations -- has run to more than 74,000 pages every year but one. During the Clinton years, by contrast, the Federal Register reached that length just once.

And Bush didn't strip agencies much either. Regulatory agencies employed 175,000 people in 2000. They employed nearly 264,000 when Bush left office.

Oh, and one last thing for your Bush-haters. You believe that Bush and Cheney caused oil prices to spike to $140 a barrel in 2008. Yup, these two guys caused this. Just picked up the phone and called their buddies in Texas and made them raise the price. So on the flip side I'm sure they caused it to fall to $30 something a barrel later that year. If you believe that these two guys were powerful enough to influence the world market on oil, then you really don't understand the basic concepts of economics and pricing. Either read Thomas Sowell's Basic Economics, or here's a short course in oil pricing.

But if you want to believe what you do -- for those of you who still insist on blaming Bush for everything -- then go ahead if it makes you sleep better at night.

But more government is not the answer to our problems. It's time to focus on the real causes, which ain't the "cowboy" from Texas, y'all.