How to deal retrospectively with Wall Street crash? ‘Cut the taxes; cut the spending’
In a moment that recalls Senate Minority Leader Josh Penry kicking off his gubernatorial campaign by declaring he would have rejected federal stimulus funds even as the state budget was tanking, we have GOP Texas Gov. Rick Perry, in a primary race, saying the whole TARP bailout program was a bad idea. What would he have done? You know, it’s simple. Robert Draper wrote down this exchange with Perry for the New York Times.
“What would have been your remedy, then?” I asked.
He shrugged. “What was our remedy then is still the remedy,” he said. “Cut the spending, cut the taxes.”
There was little expansion on the point. As Draper puts it, “Perry didn’t make clear how a little ad hoc belt-tightening on the part of Congress would have allayed a collapse of the financial markets.”
In fact, in Perry’s mind, there really was no need for a “solution” because there was no problem in the first place. The global financial collapse is now joining the ranks of fake Democratic problems that don’t need solving. GOP presidential candidate John McCain certainly didn’t need to suspend his campaign. Pres. Bush didn’t need to act to prop up the banks. Global warming isn’t happening. Health care is just fine the way it is.
At his San Antonio event, I watched Perry mockingly recall “the cries that ‘the sky is falling, the sky is falling — you have to do something, and if you don’t do something, the markets are going to crash and the economic world as we know it is going to vaporize into thin air.’ Most economists might take issue with the governor’s sentiment.
As Dave Weigel writes at the Washington Independent, “Perry’s alternative history of TARP is, no surprise, a huge winner among Republicans. This week’s Washington Post poll found a whopping 86 percent of Republicans opposed to bailouts, retrospectively and today. But back in 2008, “cutting taxes and spending” was seen as a deeply unserious response to the crisis.”
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