Open Letter to President George W. Bush

October 4, 2004

Dear Mr. President:

As professors of economics and business, we are concerned that U.S. economic policy has taken a dangerous turn under your stewardship. Nearly every major economic indicator has deteriorated since you took office in January 2001. Real GDP growth during your term is the lowest of any presidential term in recent memory. Total non-farm employment has contracted and the unemployment rate has increased. Bankruptcies are up sharply, as is our dependence on foreign capital to finance an exploding current account deficit. All three major stock indexes are lower now than at the time of your inauguration. The percentage of Americans in poverty has increased, real median income has declined, and income inequality has grown.

The data make clear that your policy of slashing taxes – primarily for those at the upper reaches of the income distribution – has not worked. The fiscal reversal that has taken place under your leadership is so extreme that it would have been unimaginable just a few years ago. The federal budget surplus of over $200 billion that we enjoyed in the year 2000 has disappeared, and we are now facing a massive annual deficit of over $400 billion. In fact, if transfers from the Social Security trust fund are excluded, the federal deficit is even worse – well in excess of a half a trillion dollars this year alone. Although some members of your administration have suggested that the mountain of new debt accumulated on your watch is mainly the consequence of 9-11 and the war on terror, budget experts know that this is simply false. Your economic policies have played a significant role in driving this fiscal collapse. And the economic proposals you have suggested for a potential second term – from diverting Social Security contributions into private accounts to making the recent tax cuts permanent – only promise to exacerbate the crisis by further narrowing the federal revenue base.

These sorts of deficits crowd out private investment and are politically addictive. They also place a heavy burden on monetary policy – and create additional pressure for higher interest rates – by stoking inflationary expectations. If your economic advisers are telling you that these deficits can be defeated through further reductions in tax rates, then you need new advisers. More robust economic growth could certainly help, but nearly every one of your administration’s economic forecasts – both before and after 9-11 – has proved overly optimistic. Expenditure cuts could be part of the answer, but your record so far has been one of increasing expenditures, not reducing them.

What is called for, we believe, is a dramatic reorientation of fiscal policy, including substantial reversals of your tax policy. Running a budget deficit in response to a short bout of recession is one thing. But running large structural deficits over a long period is something else entirely. We therefore urge you to consider the fiscal realities we now face and the substantial burden they are placing on our economy.

We also urge you to consider the distributional consequences of your policies. Under your administration, the income gap between the most affluent Americans and everyone else has widened. Although the latest data reveal that real household incomes have dropped across the board since you took office, low and middle income households have experienced steeper declines than upper income households. To be sure, the general phenomenon of mounting inequality preceded your administration, but it has continued (and, by some accounts, intensified) over the past three and a half years.

Some degree of inequality is inherent in any free market economy, creating positive incentives for economic and technological advancement. But when inequality becomes extreme, it can be socially corrosive and economically dysfunctional. Problems of this sort are visible throughout much of the developing world. At the moment, the most commonly accepted measure of inequality – the so-called Gini coefficient – is far higher in the United States than in any other developed country and is continuing to move upward. We don’t know where the breakpoint is for the U.S., but we would rather not find out. With all due respect, we believe your tax policy has exacerbated the problem of inequality in the United States, which has worrisome implications for the economy as a whole. We very much hope you will take this threat to our nation into account as you consider new fiscal approaches to address the nation’s most pressing economic problems.

Sensible and farsighted economic management requires true discipline, compassion, and courage – not just slogans. Given the tenuous state of the American economy, we believe that the time for an honest assessment of the problem and for genuine corrective action is now. Ignoring the fiscal crisis that has taken hold during your presidency may seem politically appealing in the short run, but we fear it could ultimately prove disastrous. From a policy standpoint, the clear message is that more of the same won’t work. The warning signs are already visible, and it is incumbent upon all of us to pay attention.

Signed by 163 business professors from a total of 45 schools

http://www.openlettertothepresident.org/

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The war on terror involves Saddam Hussein because of the nature of Saddam Hussein, the history of Saddam Hussein, and his willingness to terrorize himself. George W. Bush

Many will simply claim this is Liberal hogwash but I feel this clearly shows there is a general feeling of disliking of the failure of Bush's domestic policy. This is especially important that unlike us, these are professionals who know their stuff.

This is like the letter saying that,"we fear that this may be the most anti-science administration of the last several decades." Who signed it? Over 40 Nobel Prize winners. I have to wonder what percentage of living Nobel Prize winners that is but I think it the majority of them, at least for physics, chemistry, and biology. I don't really think the Peace and Literature winners matter in this context, though I'd like to hear their opinion in regard to other matters. (Like the Iraq war and pre-emptive action policy of this administration.)

And please don't tell me that they're all European anti-americans, because a good percentage of them are american.

These are the people who run the most liberal organizations in America... colleges. It's just another "representative" segment of a general feeling AMONG LIBERALS of their dislike of their perception of the "failure" of President Bush's domestic policy.

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"The heart of the wise inclines to the right, but the heart of the fool to the left."
Ecclesiastes 10:2 (NIV)

Surprise, surprise. Liberal professors playing politics. Will wonders never cease.....

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"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."

These are also among the most esteemed individuals on matters of economics and business. They DO know their stuff unlike us. And why do you think they're liberals, perhaps its because they believe liberals are the better party in terms of economics....

They are not just professors, they are business professors from the most prestegious and famous business schools like Harward. I kinda doubt they are teaching socialism to future CEOs and CFOs.

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The war on terror involves Saddam Hussein because of the nature of Saddam Hussein, the history of Saddam Hussein, and his willingness to terrorize himself. George W. Bush

I don't know these particular professors, but there is one business school on that list that is one of the most fiscally conservative in the United States (one of the best too. ). I just scanned the list to see if my school was there. But the best business schools in the nation are represented, or rather, some of their tenured professors are. Liberals? These are people who would have pimped their sisters back in the 80's to pay for an MBA. Yeah, real bleeding heart pinkos there. Puuulease. Graduate biz schools are full of people whose only god is money. Course, you won't find professors at these institutions who say nukyuler. Dang liberals!

Try again. You simply cannot dismiss any and all criticism of the Bush Administration's faulty economic policies as that of loony lefties. I can't see that anyone, who bases their conservatism on fiscal matters, is going to accept George W. Bush as a real conservative. His love of debt and lack of economic acumen make him quite liberal in my book. Apparently there are some people with books much thicker than mine who feel the same way.

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"Tweeter was a Boyscout before she went to Vietnam and found out the hard way... nobody gives a d@mn."

No one knows more than me.

__________________
"The heart of the wise inclines to the right, but the heart of the fool to the left."
Ecclesiastes 10:2 (NIV)

Instead of dismissing the criticism, maybe someone would like to try to counter their argument:

As professors of economics and business, we are concerned that U.S. economic policy has taken a dangerous turn under your stewardship. Nearly every major economic indicator has deteriorated since you took office in January 2001. Real GDP growth during your term is the lowest of any presidential term in recent memory. Total non-farm employment has contracted and the unemployment rate has increased. Bankruptcies are up sharply, as is our dependence on foreign capital to finance an exploding current account deficit. All three major stock indexes are lower now than at the time of your inauguration. The percentage of Americans in poverty has increased, real median income has declined, and income inequality has grown.

These sorts of deficits crowd out private investment and are politically addictive. They also place a heavy burden on monetary policy – and create additional pressure for higher interest rates – by stoking inflationary expectations. If your economic advisers are telling you that these deficits can be defeated through further reductions in tax rates, then you need new advisers. More robust economic growth could certainly help, but nearly every one of your administration’s economic forecasts – both before and after 9-11 – has proved overly optimistic. Expenditure cuts could be part of the answer, but your record so far has been one of increasing expenditures, not reducing them.

Sensible and farsighted economic management requires true discipline, compassion, and courage – not just slogans. Given the tenuous state of the American economy, we believe that the time for an honest assessment of the problem and for genuine corrective action is now. Ignoring the fiscal crisis that has taken hold during your presidency may seem politically appealing in the short run, but we fear it could ultimately prove disastrous. From a policy standpoint, the clear message is that more of the same won’t work. The warning signs are already visible, and it is incumbent upon all of us to pay attention.

Point out any errors in logic...

__________________
"Tweeter was a Boyscout before she went to Vietnam and found out the hard way... nobody gives a d@mn."