September 30, 2004, 8:32 a.m.
Explanations, Not Excuses
Bush is right to mention economic challenges.

Excuse, n.: A reason or grounds for excusing.

Recently, John Kerry gave a speech to the Detroit Economic Club in which he referred to the current administration as the “excuse presidency.” This was, obviously, a preemptive strike (at least he believes in preemption when it comes to political warfare) against any attempt by the president to place the overall performance of the economy in the context of the challenges that he inherited from the previous administration. As BuzzCharts has pointed out before, Bush does well on most economic-performance measures when the baseline of comparison begins with the full passage of his tax-cut program in May 2003. Typically when you hear a bad economic statistic about the Bush administration, it’s based on a time period which begins with his taking the oath of office, as opposed to the time period beginning with the full implementation of his economic package.

BuzzCharts does not believe that presidents have the right to make excuses. As the definition above implies, excuses are reasons not to do one’s job. Since the presidency is a greatly coveted post, anyone who doesn’t feel that he is up to the task should not run for the office. However, a good president would indeed explain the challenges that he has had to overcome in order to do his job correctly. In fact, any president who did not explain the reason for his actions would be shirking his duty. Likewise, any president who missed an opportunity to remind America what it has already overcome would have missed a great opportunity for encouragement.

President Bush inherited an economic climate in which, due to regulatory missteps and an unnecessarily volatile monetary policy, a stock market bubble was in the midst of bursting. Since the stock market is a major source of capital gains, and capital gains are a significant source of tax revenues, rapidly collapsing stock market valuations have both economic and fiscal consequences. Since the tax code unwisely forbids investors from writing off large stock market losses entirely in the year in which they occur, this fiscal consequence can last for years.

The chart above illustrates how the bear market that preceded the Bush presidency still has consequences during it. Capital gains plunged from $119 billion in the year 2000 to $44 billion in the year 2004. No excuses, just explanations.

— Jerry Bowyer is the author of The Bush Boom and an economic advisor to Blue Vase Capital Management. He can be reached through www.BowyerMedia.com.