11/19/2008 05:12 am ET Updated May 25, 2011

Dubya Had the Heat Turned Up in August

A valuable news report can have a misleading headline that the reporters (off the record) disavow. The excellent graphic in the New York Times yesterday was headlined with a question: "Can a President Tame the Business Cycle?" This is like asking: "Can a President End Poverty?" They are both misleading questions leading to an inappropriately negative answer.

The chart depicts the consequences of the economic policies of recent presidents. It shows what an economic disaster Dubya's administration has been, borrowing heavily (he ended the surpluses of the Clinton years) and discouraging saving with continued low interest rates and unchecked rising asset (especially housing) values.

The text accompanying the chart concludes that Americans

save less and earn a lower minimum wage -- in real, or inflation-adjusted, terms -- than at nearly any other time since 1950.

The text then asks:

Can voters reasonably expect these and other indicators to change significantly after a new president takes office in January?

This is a fairer question than in the headline. The appropriate question is not whether one can always "tame" a tiger. It is whether we have to feed people to it.

Voters reasonably can expect better policies than the disastrous hothouse-in-August policies of recent years. The runup in asset values was unsustainable. In Keynesian terms Dubya's fiscal and monetary policies had the heat running round the clock during a hot summer, inviting the dizzying loss of values in this credit-frozen October.

Yes, starting in January under President Obama one can expect an improvement. No, Obama can't end poverty, but he certainly can move to reduce the extreme inequality of income he will inherit. No, he can't "tame" the business cycle, but he can certainly moderate the cycle on the upside and thereby make a precipitous fall on the downside less likely.