John Snow’s unpersuasive appearance on Meet the Press

I know Secretary John Snow got into some trouble yesterday after making some ill-advised comments about the value of the dollar, but for me, Snow deserves criticism for something else entirely.

If you missed John Snow’s appearance on Meet the Press on Sunday, you missed a troubling interview for a man in an unenviable position — trying to defend the Bush administration’s economic record. I don’t think it went well.

Tim Russert had a simple yet powerful summary of economic indicators that set the stage for Snow’s rough morning: Dow Jones is down 19 percent since Bush took office. Unemployment rate is up 46 percent in the same time period. We’ve gone from a $281 billion surplus to a $246 billion deficit. That’s a swing of $527 billion and it’s getting worse. Worst of all, we’ve suffered a net loss of 2.1 million jobs.

Of course, these numbers aren’t Snow’s fault directly; he was just hired to be Treasury Secretary earlier this year. Nevertheless, the White House sent him out to the networks to defend the administration’s record. From where I was sitting, it wasn’t a pretty sight.

First Russert hit him on the administration’s record-high budget deficits. Unfortunately for Snow, he has a record of railing against deficit spending — before he started working for the administration.

“The budget deficit puts a hole in the pocket of every American, every day of their lives,” Snow said in 1995. “It threatens the very foundation of our culture and we must seize and act upon this historic opportunity to solve this, the most pressing issue facing the country.”

When asked about the change of heart between then and now, Snow said the U.S. was in “an entirely different set of economic circumstances” when he said that in 1995.

Yeah, they’re called better economic circumstances. The deficit in 1995 was $164 billion and shrinking. Economic growth was strong, unemployment was down, and inflation was non-existent. Under these circumstances, John Snow said the deficit “threatens the very foundation of our culture.”

Today, on the other hand, the deficit is nearly twice as big and getting bigger every day, economic growth is anemic, and unemployment is over 40% higher than it was three years ago. Under these conditions, Snow seems to think the largest deficits in the history of the world are fine and passing more tax cuts for the wealthy is the only solution.

Snow went on to explain, “In 1995, Tim, the deficit was on a track to rise in absolute dollar terms, and as a percent of GDP. That’s the important point, as a percentage of GDP. And it was high in 1995, as a percent of GDP, and no prospect for coming down.”

There’s a few things wrong with this. The deficit was not on track to grow in ’95, as Snow said, it was on track to shrink. In 1993, Clinton and a Democratic Congress passed the largest deficit reduction package in American history. It included spending cuts and tax increases on the wealthy, and it started working almost immediately. Long term interest rates went down, the deficit started to shrink, and the economy started to grow. Snow’s description of the deficit being “high” with “no prospect for coming down” is mistaken revisionist history.

Also, Snow, like many Bush allies of late, made a big deal about deficits as a “percentage of GDP.” I think it’s awfully convenient of them to change their tune when it’s a Republican president running the largest deficits in history, and suddenly they conclude these deficits are fine as long as they’re low as a “percentage of GDP.”

But let’s play by Snow’s new rules for a moment. Deficits in real dollars don’t matter, they say, deficits as “percentage of GDP” matter. Fine. In 1995, when Snow said the $164 billion deficit “puts a hole in the pocket of every American,” the deficit as a percentage of the U.S. gross domestic product was 2.2 percent. To hear Snow tell it, that meant we were in a terrible, dire crisis. Today, the deficit as a percentage of GDP is 3 percent. In other words, Bush’s deficits, by the administration’s own standards, are far worse than the deficits of a decade ago. Snow’s whole argument is wrong.

Snow says all of this is fine, though, because Bush is going to cut taxes again for the wealthy again and everything will turn out fine. Russert mentioned to Snow that Bush said his 2001 tax cut “would create jobs. Since Bush’s inauguration, however, we’ve lost over 2 million jobs.”

Struggling to explain why, Snow said the economy was slowing down when Bush took office and that the power of Bush’s tax cuts kept the recession fairly mild, or as Snow put it, “That recession would have been a lot deeper, it would have been a lot harsher, it would have been a lot worse but for those ’01 tax reductions that the president was behind.”

This, too, is nonsensical. First, that doesn’t come close to answering the question of why Bush’s economic policies failed to deliver the promised job growth. Second, this is hardly a ringing endorsement of the administration’s record. Bush passed a $1.6 trillion tax cut, we had a recession, and 2 million people lost their jobs. Snow’s response? Well, the recession could have “been a lot worse.” While that’s true, it could have been worse, it was supposed to be better. The administration all-but-guaranteed robust prosperity. They didn’t, or couldn’t, deliver.

Russert didn’t let the point go. “But the previous tax cut, as you pointed out, there’s been a loss of 1.7 million jobs since it was passed. How do you know for certain that another tax cut will create jobs?” Snow responded, “Well, it just stands to reason that tax reductions of the sort that are being proposed by the president will create jobs.”

It stands to reason? That’s why we’re doing this? Bush has dug the country into a huge hole and he wants to dig deeper because it “stands to reason” things will get better if follow his advice again? If tax cuts for the wealthy produce jobs, why did unemployment go up after we passed the 2001 plan, when it was twice as big as the one being considered now?

Russert, at the conclusion, asked Snow, “And if you’re wrong?” Snow replied, “Well, I’m not going to be wrong on this.”

That’s great, Mr. Secretary, but we’ve heard this before. Fool me once…