I keep seeing this error, so I think it is time to revisit it. In fact, we are hearing it even more, now that it is an election year. Again and again we hear "Bush has given us the worst economy in 30 years", or whatever the current number is, but just like statements that "FDR got us out of the depression" or "Clinton gave us the strongest economy in however many years", these statements make the foolish mistake of confusion coincidence in time with causation.

Allow me to start by giving two examples from my home state. We are a Democrat state, the legislature is run by the Democrats and, for the most part, the governor is a Democrat. We have a few Republican congressmen as we have conservative regions, but they are not numerous enough to break the stranglehold the Democrats have on state office.

Well, normally don't. After the horrendously inept Glendenning administration, led by a governor who spent most of his time stopping new building and preventing needed roads from being developed, at least when he wasn't mired in scandal over the mismanagement of his past posts, or his efforts to ensure a future position, we finally elected a Republican. And, as expected, the Democrat legislature made sure he could accomplish nothing.

But that is not my point here. Here I want to discuss two particularly unfair criticisms leveled against him, which also provide great examples of this error. You see, during Ehrlich's term he was blamed for a 70%+ increase in rates from BG&E the local electricity provider, as well as massive increases in tuition at the state university system. The problem being, though they took plac eon his watch, he really had little to do with either.

The BG&E fiasco was part of one of those "deregulation" schemes which wasn't. In order to make sure deregulation never worked, the Democrat legislature and the previous governor had provided massive subsidies to the former public utility, BG&E, in exchange for continued rate caps. Of course this meant that no one else could compete, as BG&E could charge below market rates. So it effectively kept the market a monopoly, at least for 10 years. However, when those subsidies ran out, during Ehrlich's administration, the rates rose dramatically. Those int eh subsidized market, not used to the current market rates, were furious, and immediately blamed the governor. The problem being, it was hardly his fault. The entire bad idea had been that of his predecessor. (It was also claimed that deregulation had failed, but that false accusation is a subject for another essay.)

Similarly, the rates of the University of Maryland system are set, by and alrge, by the board of regents. The regents are appointees, it is true, but the problem with blaming Ehrlich is, while he was the sitting governor, the regents responsible were mostly appointees of his predecessor. So, again, Ehrlich found himself blamed for the actions of the governor who preceded him.

And the same pattern holds for the examples I mentioned earlier. Clinton did preside over a strong economy, or a relatively strong one. But part of that credit belongs to the continued recovery from the Nixon-Carter mismanagement, which started in about 1983 and continued well into the 1990's. Another part oft he credit belongs tot he reforms instituted by the Republican congress elected in 1994. And still more belongs to the individual businessmen who invested in American enterprises, increasing available capital and raising the standard of living. Just because it happened on Clinton's watch doe snot mean he is responsible for it.

(I will skip FDR and the depression, as I wrote about that at great length previously.)

And that brings me back to the blame Bush is getting for the economy. First, it is arguable whether the economy is "the worst in 30 years". There are an infinite number of ways to quantify and economy, and many show the economy is doing quite well. Even by those which showed us doing very poorly at the start of the year, we are actually improving even as the Democrats talk down the economy. Still, even if assume that the claims are true, and there is some validity to the claim this is the worst economy in 30 years, why does that mean Bush is to blame?

We tend to overestimate the impact a president has on the economy. Taxes, regulations, federal and state laws, judicial rulings, and a number of other governmental functions can effect the economy, but all but a handful of those are not within the power of the president to change significantly. And even if they were, there are even more factors which are not governmental at all. The market itself can fluctuate dramatically without the slightest change in government policy. So, it seems simply insane to blame the president for the economy.

At least, that is, unless one can point to a specific action. For example, I can say that FDR's meddling brought about the collapse of many branches of industry, but I can do so because I can show how it happened. Likewise, I can blame Nixon's closing of the gold window (and Carter's subsequent mismanagement of currency) for the dramatic inflation of the 1970's. Similarly, I can credit Reagan's abandoning of the few remaining executive price controls with some positive economic developments of the 1980's. But all of those are clearly demonstrable cause and effect relationships. I have heard nothing of the kind when discussing Bush. The closest I have heard to a case for causation is "his tax cuts wrecked the economy", but no one bothered to even vaguely connect those two points.

Now, I am sure some will ask me "so, if it isn't Bush, what does make this economy so bad?" And, though I don't agree that this is the worst economy in 30 years (especially as 30 years includes the disastrous final two years of the Carter administration), I do admit the economy is not as robust as could be hoped. Some of it is being excessively hyper, such as the collapse of the government created sub-prime bubble, and the adjustment of over-priced housing back to more reasonable levels, but there is a real sluggishness in the economy, and one which can be easily explained.

The explanation, which I am surprised has escaped everyone's notice is, we are at war. I know it doesn't feel like it, we don't have victory gardens, there are no rationing coupons and we don't have the draft, but we are every bit as much at war as in 1968 or 1944. And it is expensive to be at war. And as the economy was not so great in 1944 or 1969 (the economy did better early in our involvement in Vietnam thanks to JFK's removal of FDR's abhorrent upper tax brackets), we are seeing the economy slowing due tot he war's drain on resources and manpower. It may not be quite as draining as World War II, because it obviously involves a smaller percentage of the populace, but then again, the economy isn't as slow now as it was in 1994.

And, if you think about it, the relatively weak slowing we see in the economy today is actually pretty robust for a state at war. The only reason we speak of a bad economy is precisely because many forget that we are at war.

POSTSCRIPT

Some will question my description of the WWII economy as poor, but if we think in terms of the consumer economy, it was. Yes, thanks to millions being drafted and the demands of the government employment was full and factories were running, but in terms of consumer goods, new business ventures, income growth, enterprise expansion, the 1940's were dreadful. The massive war needs and the loss of massive numbers to the military draft concealed that fact, as did rationing, but if you take away the part of the economy dedicated to fighting the war, the 1940's economy was worse than anemic.