05/04/2011 04:43 pm ET Updated Dec 06, 2017

All the Wrong Lessons

Cross-posted from New Deal 2.0.

The Republicans are rushing to claim credit for George Bush's interrogation techniques in the demise of Osama bin Laden. Someone being "interrogated" gave up the name of the courier who eight years later was tracked painstakingly to the Osama compound in Pakistan.

The last time this Republican demand for retroactive credit happened in a big way, to my recollection, was when many Republicans, and media cheerleaders like Larry Kudlow of CNBC, were giving Ronald Reagan all the credit for the economic boom under Bill Clinton. Reagan's last year in office was 1988. The boom began in 1996. More on this tragicomedy in a moment.

John Yoo, the legal scholar responsible for the outrageous White House briefs that okayed the harsh torture, congratulated President Obama in a blog post on Tuesday, and then quickly credited Bush for the success in getting Osama -- all his analysis based on first-day "press reports" about how the courier was identified. The law professor apparently saw no need to keep quiet until he got the facts. Peter King, one of the House Republican leaders most disturbed by Muslim presence, immediately credited water boarding for the breakthrough. No need for him to check the facts.

The New York Times now reports that the man in question was not water boarded. That did not stop the press from believing King and accepting his assertions as fact. (Let's also keep in mind that the Times, if likely more diligent, depends on intelligence sources as well). In fact, The Times noted that higher up terrorist leaders who were subjected to intense interrogation methods did not corroborate the name. To the contrary, even under serious torture, they deliberately misled the U.S. intelligence officers. The White House National Security Council response, according to the Times, was that if they had had a reliable name in 2003, they would have captured Osama in 2003.

The central question is how easy it is to learn the wrong lessons from the Osama event. The Osama death opens a potential path to calmer relations and perhaps a true withdrawal from Afghanistan, meaningful negotiations with the Taliban, and regional cooperation that includes all-important Pakistan, a nation whose involvement is critical to the region (and has been to the Afghanistan war for the transport of troops and supplies). Instead, of course, we get outrage and congressional calls for punishment. We are told by our own macho extremists how effective torture was.

No doubt, Pakistan has been playing this game both ways, and the U.S. should demand a clear relationship. But Pakistan has many internal issues to deal with, and is very uncomfortable with foreign presence in Afghanistan. The estimable international affairs columnist of the International Herald Tribune, William Pfafff, recommends reading someone with a serious, informed perspective on the issue, Anatol Lieven, of King's College on the subject, author of a new book, Pakistan, A Hard Country. The idea should be to calm the waters and develop a salubrious relationship with Pakistan. Instead, we get vindictive shrieks of anger and demands for punishment.

Similarly, the Right never learned the lessons from what were failed Reagan policies in the 1980s. They argued that lower progressive taxes on the wealthy in particular -- after payroll tax hikes, they were lowered only slightly on balance for middle-calls and working class Americans -- remade America, coupled with deregulation and a wave of hostile corporate takeovers (unchallenged by Reagan's defanged anti-trust units). Mark Sirower, a McKinsey analyst, gave the lie to the poor value of most takeovers in his fine book, The Synergy Trap.

But the Clinton boom occurred after two tax increases -- one under George H.W. Bush and the other engineered by Clinton himself. It was aided by a Federal Reserve that at last stopped fighting inflation tooth and nail. The leading edge of business was not the supposed lean and mean victors of the takeover wars but the new chip-based high-technology companies. All, of course, went to excess as regulations went unenforced. Finance was already producing phantom economic gains and bubbles that soon burst. Reagan, who so effectively pushed deregulation and appointed Alan Greenspan as Fed chairman, deserves more credit for those than the true economic gains.

George W. Bush, always embarrassed by his father, wanted to be just like Reagan. But under Reagan, wage growth stalled, inequality began to rise sharply, job growth was slower than in almost any other expansion since World War II, and capital investment was weak. The budget deficit rose to above 6 percent of GDP and did not fall even to 3 percent of GDP until late in his second term.

None of the facts deterred the younger Bush. He too implemented large tax cuts. Did they work? Not at all. But I find even some of the best business reporters are not aware of the true record. After the tax cuts, the Bush economy grew more slowly from trough to the 2007 peak (before the credit crisis and the start of the Great Recession), than any other trough-to-peak expansion in the post-war period. Job growth was far worse than in any similar expansion. Here are some data provided by the Economic Cycle Research Institute.


In fact, it is Ronald Reagan and George Bush who are more responsible for the current budget deficits than any other presidents.

Will we draw the right lessons from the Osama death? It is unlikely because of entrenched ideological prejudices on the part of the Right. And these same prejudices account for making the enormous mistakes in economic policy today. History is a often weak sibling to ideology.